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Soulbound Tokens (SBTs) | Newsletter Design

Paragragh Tip of The Week

Unraveling the Mystery of Soulbound Tokens (SBTs)

A close look into the future of SBT digital identity and reputation in Web3

This week, the concept of identity and reputation is an interesting topic for discussion, especially with a deep dive into Soulbound Tokens (SBTs).

As we begin our analysis of them, you are going to learn:

  1. what they are.

  2. the origin and history of soulbound tokens

  3. the usage of SBTs

  4. differences Between SBTs and NFTs, and the

  5. benefits of SBTs

What Are Soulbound Tokens?

To begin our discussion, Solulab tells us that Soulbound Tokens (SBTs) are:

"digital tokens uniquely linked to individual owners, entities, or physical assets on the blockchain. They differ from traditional digital assets by offering true ownership, unbreakable links, and secure control over data and assets in the Web3 era."

SBTs are unique tokens bound to the user's 'soul' (account) and are considered Non-fungible Tokens (NFTs), just a different type of NFT. As an innovative method for storing credentials on the blockchain, they can't be transferred, thereby protecting transparency and immutability for storing trust and credentials.


SBTs were created by Vitalik Buterin, co-founder of Ethereum co-founder. The premise for creating the soulbound tokens was to support straightforward contracts. The Vitalik Soulbound name came from the World of Warcraft game.

Usage of SBTs

SBTs are used to tokenize achievements or traits in various aspects of a person's life. They are popular in industries such as education, where Proof of Attendance Protocols (POAPs) can be used. When students graduate from an educational institution, their Soul wallet can offer their respective certificates. The SBT would hold the student's credentials.

In addition to graduation certificates, SBTs contain personal data, individual achievements, and work credentials. What better way to act as a digital resume for prospective job searchers?

Another example of how soulbound tokens are used is in the financial services sector. Creditors can see the credit reports of those seeking loans. Since creditors have this access, they will be more apt to lend since they have evidence of the person's persistence in keeping their obligations.

The final case use is in the medical industry. Having a medical record as an SBT can enable a streamlined process while changing doctors or seeking insurance. The pain points of verifying one's identity, past medical records, and explaining medical history can be avoided.

Differences Between SBTs and NFTs

Remember earlier, I mentioned that SBTs are NFTs? That is true; however, they do have differences. While NFTs offer utility in art, gaming, and collectibles, SBTs go beyond these applications. They serve as credentials in a user-governed decentralized society (DeSoc) for practical purposes like airdrops and token distributions. NFTs represent ownership of unique digital assets and can be sold or traded. On the other hand, SBTs are non-transferable and prevent fraud, where tokens are distributed based on participants' activities.

Benefits of SBTs

Soulbound tokens provide many benefits. We already touched on some of them, but let's look at a few more.

  1. Holders of SBTs can identify themselves online easily. They can also share verifiable information with others.

  2. SBTs can build digital reputations.

  3. Soulbound tokens hold information that pertains to one individual. Examples are educational certificates, professional licenses, letters of recognition, awards, and letters of participation.

  4. SBTs have a significant impact on how DAOs handle voting.

  5. SBTs allow for building stronger trust relationships in decentralized settings.

However, soulbound tokens also come with limitations. One of the primary challenges is their non-transferability, which could pose challenges in scenarios where transferability is desirable.

In review

As we delve deeper into the Web3 world, Soulbound Tokens (SBTs) will play a decisive role in shaping the future of digital identity and reputation.

In our deep dive, we looked at the following items:

  1. What they are.

  2. The origin and history of soulbound tokens

  3. The usage of SBTs

  4. Differences Between SBTs and NFTs, and

  5. Benefits of SBTs

As we have explored, SBTs are not only a distinct type of NFT but are also instrumental in capturing and safeguarding personal achievements, credentials, and reputations in a blockchain environment. While presenting certain limitations, their non-transferable nature is fundamental in maintaining the integrity and authenticity of the data they represent.

As we continue to venture into the depths of the Web3 world, it becomes clear that SBTs will be central in creating a more transparent, reliable, and user-centric digital landscape. Whether in education, finance, healthcare, or decentralized governance, the impact of SBTs is poised to reshape our understanding of digital interactions and trust mechanisms, paving the way for a more interconnected and verifiable online community.

You Have Notification Options on Paragraph

Did you know you can receive notifications from Paragraph? Not only that, Let’s take a look.

First, log into your account on if you’re not already logged in.

Once you arrive at your destination, click on Settings / Notifications. On that page, you will notice you have three different options for receiving (or not receiving) notifications. Do you want to see?

The three ways you can set notifications are:

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You can choose 1, 2, or all 3 notification boxes to receive notices in your email. If you don’t want to receive notifications, just uncheck one or more boxes. Easy as pie, huh?

This week’s tip is nice and short. We’ll have more next week.

See you then. 😊

🍉 Unlocking the Art of Newsletter Design with Pixels

In the digital age, particularly in the dynamic Web3 landscape, the power of a well-designed newsletter cannot be overstated. Enter “Pixels,” a groundbreaking newsletter poised to transform how non-designers approach this art form.

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Subscribe to Pixels here and embark on a journey to mastering the art of newsletter design, regardless of your design experience.

A Note on Ponderer AI

For those interested in deeper insights into AI and blockchain, “Ponderer AI,” curated by Candy from our DAO, offers a wealth of knowledge and is a testament to the power of well-crafted content.

💜 Wednesday's Weekly Rollup- Podcast Prep 

Join us on Wednesday morning at 11 AM Eastern time for the Web3 Academy team's Podcast News Rollup Prep.

This is a great opportunity to connect with the team, ask questions about the latest headlines, and contribute to our podcast. We value your insights and look forward to collaborating with you.

Discord Event Link: Join Web3 Academy Discord

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--- Thanks for reading! See you next Sunday!

Disclaimer: The information provided in this article is for informational purposes only and should not be considered legal or financial advice. Any reliance on the information provided is solely at your own risk.

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