What is a soulbound token?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 5 min
In short
A soulbound token (SBT) is designed to be non-transferable once issued. Since it cannot be traded, it is used to represent things tied to a specific person — credentials, membership, attendance. Its distinct weaknesses are mis-issuance and the loss of the holder's key.
Key points
- A token that cannot be moved to another address
- Used for credentials, membership and attendance records
- Not tradable, so it has no market price
- Revoking a mistaken issuance depends on the contract
Definition
A token bound to one address, with its transfer functions disabled. Its purpose is to record a fact about that address rather than to convey tradable ownership.
The usual implementation extends ERC-721 and makes transferFrom and friends always revert. Only the issuer's mint to the recipient succeeds; afterwards even the holder cannot move it. With no resale market, there is nothing to speculate on — which is the design intent.
Typical uses are course completion, event attendance and contribution records in a DAO. Non-transferability prevents credentials being simply bought, but because everything binds to one address, it also ties those records to that address's whole history, which raises real privacy questions.
Mis-issuance is the awkward case. Some designs give the issuer a burn permission, some let the holder reject or destroy the token, and there is no single accepted specification. And if the key is lost, the record cannot be migrated — in practice it is gone.
Watch out for
- · Being non-transferable, it cannot be sold or converted to cash
- · The record binds to a public address and can be linked to its other activity
- · Lose the key and the credential it represents is lost with it