Soulbound tokens (SBTs) are non-transferable NFTs that represent credentials, affiliations, and achievements. This permanence creates a persistent, composable identity layer for users, unlike transient wallet addresses.
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Why Soulbound Tokens Inevitably Lead to New Social Graphs
SBTs are not just digital badges. The network of non-transferable tokens held by a wallet forms a rich, verifiable social graph, enabling discovery and trust based on shared experiences and proven affiliations. This is the missing infrastructure for Regenerative Finance (ReFi).
introduction
THE IDENTITY LAYER
Introduction
Soulbound tokens create a permanent, on-chain identity substrate that enables new, verifiable social graphs.
This permanence enables verifiable social graphs. Projects like Lens Protocol and Farcaster build on this principle, using SBT-like handles and follows to map trust and reputation directly on-chain.
The data structure is the new social capital. Unlike opaque Web2 graphs owned by Meta or X, SBT-based graphs are permissionless, portable, and enable novel coordination mechanisms like DAO governance and undercollateralized lending.
Evidence: The Ethereum Attestation Service (EAS) has processed over 1.5 million attestations, demonstrating the demand for a standard to issue and verify these on-chain credentials.
thesis-statement
THE ARCHITECTURAL SHIFT
The Core Thesis: From Identity Silos to a Portable Social Graph
Soulbound Tokens (SBTs) dismantle platform-controlled identity, forcing the creation of user-owned, composable social graphs.
SBTs decouple identity from applications. Current social graphs are proprietary assets locked inside platforms like X or Farcaster. SBTs, as non-transferable on-chain attestations, make a user's reputation, memberships, and credentials portable property, not a platform's moat.
Portability creates a new data primitive. This user-centric model inverts the Web2 power dynamic. A graph built from SBTs from Gitcoin Passport, EAS attestations, and DAO membership NFTs is interoperable by default, enabling permissionless innovation atop a shared social layer.
The network effect flips. Value accrues to the portable graph and its user, not the siloed app. This mirrors how Uniswap separated liquidity from order books. The winning social app will be the best curator of this underlying graph, not its owner.
Evidence: Vitalik's original SBT paper frames them as the 'soul' of Web3 social. Projects like Lens Protocol and Farcaster Frames are early attempts to build atop this portable identity layer, though they remain partially siloed.
key-trends
FROM IDENTITY TO INFRASTRUCTURE
The Three Pillars of the SBT Social Graph
Soulbound Tokens (SBTs) are not just non-transferable NFTs; they are the atomic units for constructing verifiable, composable, and economically meaningful social graphs.
01
The Problem: Fragmented, Unverifiable Identity
Web2 social graphs are siloed and based on usernames, not users. This creates Sybil attacks, spam, and zero portability.\n- Key Benefit 1: SBTs provide a cryptographically verifiable identity root anchored to a wallet.\n- Key Benefit 2: Enables Sybil-resistant reputation systems, moving beyond simple token-gating.
>99%
Sybil Reduction
1
Portable Identity
02
The Solution: Contextual, Composable Attestations
A single SBT is meaningless. Value emerges from a graph of attestations (e.g., from Ethereum Attestation Service, Verax).\n- Key Benefit 1: Graph-native underwriting for credit (e.g., Cred Protocol) without exposing personal data.\n- Key Benefit 2: Composable reputation across dApps—your Lens Protocol SBT can inform your Gitcoin Passport score.
1000+
Attestation Schemas
Cross-App
Composability
03
The Network: Programmable Social Primitives
The graph itself becomes a programmable layer. Think Farcaster Frames or Lens Open Actions, but for identity and trust.\n- Key Benefit 1: Enables intent-based systems where your graph automates actions (e.g., "only lend to wallets with these attestations").\n- Key Benefit 2: Creates native economic layers for social coordination, moving beyond ad-based models to stake-for-access or reputation-weighted governance.
New
Coordination Primitive
Stake-Based
Economic Model
deep-dive
THE ARCHITECTURE
Deconstructing the Graph: Nodes, Edges, and On-Chain Provenance
Soulbound tokens create a new data primitive that redefines social graph construction from first principles.
SBTs are verifiable nodes. Traditional social graphs rely on opaque identifiers. A Soulbound Token is a non-transferable, on-chain attestation that serves as a cryptographically provable node with immutable provenance.
Edges are permissionless attestations. Relationships form via smart contract interactions like token gating or delegation. This contrasts with Web2's platform-controlled edges, enabling user-owned graph portability.
On-chain provenance enables trust. Every SBT mint and transfer creates a public, auditable history. This allows protocols like Gitcoin Passport or EAS to build reputation systems without centralized intermediaries.
Evidence: The Ethereum Attestation Service (EAS) processed over 1.5 million on-chain attestations in 2023, demonstrating demand for this primitive.
ARCHITECTURAL COMPARISON
Social Graph Showdown: Web2 vs. SBT-Based
Comparison of core properties between incumbent centralized social graphs and emerging, user-owned graphs built on Soulbound Tokens (SBTs).
| Feature | Web2 Social Graph (e.g., Twitter, Facebook) | SBT-Based Social Graph (e.g., Lens, Farcaster, CyberConnect) |
|---|---|---|
Data Ownership & Portability | ||
Monetization Control | Platform captures >95% of ad revenue | Creator-direct via NFTs, subscriptions, token-gating |
Sybil Resistance | Phone/Email (Cost: ~$0.10) | On-chain reputation & SBT attestations (Cost: Gas + Staking) |
Graph Composability | Walled garden; API rate-limited | Permissionless read/write; native to DeFi, DAOs |
Verifiable Credentials | None | SBTs for education, employment, DAO contributions |
Algorithmic Curation | Opaque, engagement-optimized | Transparent, user-configurable via on-chain social data |
Data Persistence | Subject to platform policy & shutdown | Immutable on L2s (Cost: ~$0.01-0.10 per action) |
Identity Primitive | Platform-specific user ID | Portable Ethereum Address or ENS name |
protocol-spotlight
SOCIAL GRAPH INFRASTRUCTURE
Protocol Spotlight: Who's Building the Graph Today?
Soulbound Tokens (SBTs) create verifiable, non-transferable identity anchors, forcing a re-architecture of social graphs from centralized databases to user-owned, composable networks.
01
Lens Protocol: The Social Graph as a Public Good
Decouples social data from apps via a composable, on-chain graph built on Polygon. Profile NFTs act as portable identities, while publications & follows are immutable records.
- Key Benefit: Enables permissionless innovation; any dev can build a front-end on the same user base.
- Key Benefit: ~2.5M+ profiles create a critical mass of verifiable social data, resisting platform lock-in.
2.5M+
Profiles
Polygon
L1
02
Farcaster Frames: The Problem of Walled Garden Feeds
Centralized algorithms control discovery and monetization, creating extractive platforms. Farcaster's decentralized protocol with on-chain identity and off-chain hubs solves this.
- Key Benefit: Frames turn any cast into an interactive app (mint, vote, trade) without leaving the feed.
- Key Benefit: ~350K+ daily active users demonstrate product-market fit for a credibly neutral social layer.
350K+
DAU
Optimism
Identity L2
03
Gitcoin Passport: The Sybil-Resistant Graph
On-chain reputation is meaningless without proof of unique humanity and diverse affiliations. Passport aggregates SBTs & verifiable credentials into a stamp score.
- Key Benefit: Provides a trust-minimized sybil resistance layer for protocols like Optimism's RetroPGF.
- Key Benefit: 1.5M+ passports create a reusable graph for allocating $50M+ in community funding.
1.5M+
Passports
$50M+
Funds Allocated
04
The Problem: Silos Kill Composability
Web2 social graphs are proprietary assets, locking user relationships and data. This stifles innovation and enables rent-seeking. SBT-based graphs like those from CyberConnect and RSS3 provide the antidote.
- Key Benefit: Cross-platform portability of follows, likes, and achievements.
- Key Benefit: Enables modular reputation systems where a DAO contribution SBT from SourceCred influences your weight in a Snapshot vote.
100%
User-Owned
Modular
Stack
05
The Solution: Programmable Social Relationships
Static friend lists are primitive. SBT graphs allow relationships to have permissions, expiry, and context. Think token-gated group chats via XMTP or automated airdrops to your most engaged followers.
- Key Benefit: Enables conditional logic (e.g., only users with SBT X & Y can access Z).
- Key Benefit: Creates monetization primitives for creators beyond platform-ad revenue splits.
Context-Aware
Relationships
New Biz Models
Enabled
06
The Future: Hyper-Fragmentation & Aggregation
The end-state isn't one graph to rule them all, but thousands of context-specific subgraphs (gaming, professional, credit). Aggregators like Disco and Karma3 Labs will index and score across them.
- Key Benefit: Specialized graphs yield higher-fidelity signals than a monolithic feed.
- Key Benefit: Aggregation layers solve discovery, turning fragmentation from a bug into a feature.
1000s
Sub-Graphs
Indexing
Critical Layer
counter-argument
THE INEVITABLE TRADE-OFF
Steelman: The Privacy and Centralization Counterarguments
The core criticisms of Soulbound Tokens (SBTs) are valid but accelerate, not prevent, the formation of new, verifiable social graphs.
Privacy is a feature, not a bug. The public, immutable nature of SBTs on ledgers like Ethereum or Base creates a verifiable data layer. This forces the development of privacy-preserving primitives like zero-knowledge proofs (ZKPs) from Aztec or Semaphore to manage selective disclosure.
Centralization is a bootstrapping mechanism. Early SBT issuance by entities like Optimism or Guild.xyz appears centralized. This centralization seeds the graph with high-signal data, enabling decentralized reputation protocols like Noox or Hats Protocol to build on top.
The counterargument is the catalyst. Privacy concerns drive ZK innovation. Centralization fears create demand for decentralized attestation networks like Ethereum Attestation Service (EAS). The SBT debate directly funds the infrastructure for its own solution.
Evidence: The growth of EAS, which processed over 1 million on-chain attestations in 2023, demonstrates market demand for a neutral, composable framework that addresses SBT's perceived flaws while fulfilling its core promise.
takeaways
SOCIAL GRAPH INFRASTRUCTURE
Key Takeaways for Builders and Investors
Soulbound tokens (SBTs) are not just digital resumes; they are the atomic units for constructing verifiable, composable, and economically meaningful social graphs on-chain.
01
The Problem: Sybil-Resistant Coordination
DAOs and protocols struggle with governance attacks and airdrop farming due to pseudonymous, disposable identities. Proof-of-Personhood solutions like Worldcoin are expensive and centralized.\n- SBTs provide a native, programmable layer for persistent identity\n- Enables reputation-weighted voting and merit-based airdrops\n- Creates costly-to-fake social signals for protocols like Optimism's Citizen House
>99%
Sybil Cost Increase
Governance
Primary Use Case
02
The Solution: Composable Reputation as Collateral
Creditworthiness is opaque in DeFi, limiting undercollateralized lending. SBT-based graphs turn social and professional history into a verifiable asset.\n- Protocols like Arcade and Spectral can underwrite loans against NFT + SBT portfolios\n- Guild/DAO membership SBTs signal trust for credit delegation\n- Enables reputation-based interest rates, moving beyond pure TVL
$100B+
Undercollateralized Loan TAM
Spectral
Key Protocol
03
The Infrastructure Play: Graph Indexers & Oracles
Raw SBT data is useless without interpretation. New infrastructure will emerge to index, score, and contextualize on-chain social graphs.\n- The Graph subgraphs for SBT relationships will be a primary data source\n- Oracle networks like Pyth may feed off-chain reputation scores on-chain\n- Privacy layers like Aztec are critical for sensitive attestations
Indexer
Core Primitive
The Graph
Key Entity
04
The Network Effect: SBTs as Social API Endpoints
Current social graphs are siloed (Twitter, Farcaster). SBTs create a portable, user-owned social layer that any app can query and write to.\n- Builders can construct feeds based on SBT affiliations, not follower counts\n- Enables cross-protocol achievement systems and soulbound NFTs\n- Farcaster frames and Lens Protocol integrations become trivial
Lens, Farcaster
Integration Targets
Portable
Key Attribute
05
The Investment Thesis: Vertical-Specific Attestation Hubs
Generic SBT platforms will fail. Value accrues to vertical-specific attestation protocols that become the canonical source of truth for a domain.\n- A developer credential hub becomes essential for developer DAO compensation\n- A professional license registry (e.g., for legal or medical) enables on-chain services\n- These hubs act as reputation oracles for other DeFi and social apps
Vertical SaaS
Analogy
Oracle Fee
Revenue Model
06
The Existential Risk: Permanence vs. Privacy
Soulbound implies immutability, which conflicts with GDPR 'right to be forgotten' and the need for reputation recovery. This is the core tension.\n- Solutions require expiring SBTs, revocation registries, or zero-knowledge proofs\n- Privacy-preserving attestation systems like Sismo and zkEmail are critical\n- Without this, SBTs face regulatory extinction in key markets
GDPR
Key Risk
Sismo, zkEmail
Mitigation Tech
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