Soulbound Tokens (SBTs) are non-transferable NFTs that represent credentials, reputation, affiliations, and identity attributes permanently tied to a specific wallet address (Soul). The concept was proposed by Ethereum Vitalik Buterin, economist Glen Weyl, and lawyer Puja Ohlhaver in 2022. Unlike regular NFTs (which can be bought and sold), SBTs cannot be transferred once issued – they are permanently bound to the receiving wallet, like a digital diploma or professional certification. Use cases include academic degrees (issued by universities to student wallets), professional certifications, event attendance proof (POAPs), medical records, work history, DAO membership, and KYC verification. SBTs enable decentralised credit scoring: a wallet accumulating SBTs from reputable issuers (employers, educational institutions, credit providers) builds verifiable on-chain reputation enabling undercollateralised lending – a crucial DeFi limitation SBTs could solve. SBTs also enable Sybil resistance: a wallet with many community-verified SBTs is more likely to be a genuine human than a fresh address, helping prevent bot manipulation in governance systems.
Example: Example: A university issues SBTs to graduates: MIT Computer Science Degree, 2024 bound to the graduate Ethereum wallet. The SBT cannot be sold or transferred. A DeFi protocol offering uncollateralised loans checks applicant SBTs: MIT degree plus 3 years employment SBT plus credit history SBT equals creditworthy borrower – on-chain reputation enables loans impossible in anonymous DeFi.
Learn more: Vitalik Buterin – Soulbound
