“Soulbound” NFTs have attracted attention recently, with Ethereum founder Vitalik Buterin being one notable proponent. The concept of a soulbound NFT is derived from the online multiplayer game World of Warcraft. In the game, users are able to obtain high-level weapons and accessories that cannot be traded or exchanged but are instead tied to the user’s account, thus they are “soulbound.”
This concept has been adopted and applied to Web3, mainly for identification purposes. Soulbound tokens cannot be transferred once created or acquired. They are held in wallets known as Souls. Soulbound tokens can be considered permanent attributes or traits that define the “soul” of an account.
The fact that soulbound tokens cannot be exchanged or sold proves that the user is “entitled” to the relevant token. Soulbound tokens could represent medical records, education certificates, criminal records, or even know-your-client/customer (KYC) records. Since different soulbound tokens each have unique functions, users can also separate their tokens among various Souls based on…