Binance, the world’s largest cryptocurrency exchange, has announced that it will issue Binance Account Bonding (BAB), the first-ever Soul Bonding Token (SBT) based on the BNB Smart Chain. BAB will initially be launched as a pilot project and will only be accessible through the Binance mobile app.
This will be an optional feature that will only allow those Binance users who comply with Know Your Customer (KYC) to mint their BAB directly on their wallets when using the platform.
BAB was essentially introduced as an online identification feature for Binance. It can also be leveraged by third-party protocols to confirm BAB tokens are used for myriad activities, such as avoiding bots, airdropping NFTs, and DAOs using it for quadratic voting, etc.
Representation of beyond monetary amounts
According to the official introduction blog post, BAB Token is the first Soulbound token issued on the BNB Smart Chain, focusing on solving identity issues in a decentralized society. It is a non-transferable and non-financialized token. The announcement noted that “transferability” may not be in the best interests of decentralization. There may be problems with the distribution of governance powers.
Therefore, BAB differs from traditional assets such as Bitcoin and Ethereum, which represent instantaneous sums.
“As we start to explore how credentials will work in Web3, whether in the form of verifiable skill sets or titles earned, more use cases for the BAB token will emerge. This sense of responsibility makes for more efficient Decentralizing communities and spaces paves the way.”
Binance expects other use cases for BAB to emerge in the future as the web3 landscape evolves.
The concept of SBT was first proposed by Ethereum founder Vitalik Buterin along with E. Glen Weyl and Puja Ohlhaver. Earlier this year, Buterin explain Disadvantages of the transferability and commercial viability characteristics of NFTs.
Soulbound is a new token standard that has the potential to become an important part of a decentralized society or DeSoc. In the paper, Buterin details several ways SBT is used, from college degrees to educational certificates and web3 credit scores.
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