Why Soulbound Tokens Challenge Traditional Ownership Models

Traditional on-chain reputation (like POAPs) is bought and sold, divorcing social capital from identity. This creates Sybil attacks and reputation laundering, undermining governance and credit systems.\n- Key Benefit 1: Enables Sybil-resistant governance for protocols like Optimism's Citizen House.\n- Key Benefit 2: Creates non-financialized social graphs for undercollateralized lending.

SBTs act as a universal, machine-readable standard for credentials, from university degrees to DAO contributions. This shifts trust from centralized issuers to cryptographic proof.\n- Key Benefit 1: Enables portable identity across dApps without re-verification.\n- Key Benefit 2: Reduces KYC/AML overhead by ~70% for DeFi protocols via reusable attestations.

SBTs decouple the right to use from the right to sell. This enables dynamic, conditional access models impossible with NFTs.\n- Key Benefit 1: Powers gated experiences (e.g., token-gated Discord) that persist regardless of NFT floor price.\n- Key Benefit 2: Enables programmable airdrops and loyalty rewards that cannot be instantly dumped by mercenary capital.

One-token-one-vote is broken, enabling whale dominance and Sybil attacks. SBTs bind voting power to a verified, non-transferable identity.

• Key Benefit: Enables personhood-based voting and quadratic funding models.
• Key Benefit: Projects like Gitcoin Passport and Worldcoin use this for Sybil-resistant airdrops and grants.

Traditional credit scores are siloed and opaque. SBTs create a composable, on-chain reputation graph for underwriting.

• Key Benefit: Enables soulbound lending where your transaction history (e.g., on Aave, Compound) becomes verifiable collateral.
• Key Benefit: Reduces reliance on over-collateralization, unlocking under-collateralized DeFi.

NFT projects rely on secondary market royalties and speculation. SBTs remove transferability, forcing a focus on intrinsic utility.

• Key Benefit: Aligns project incentives with long-term community engagement, not flippers.
• Key Benefit: Enables persistent access rights (e.g., gated Discord channels, IRL events) that can't be sold.

EAS isn't an SBT standard, but its schema-based attestations are the foundational primitive for building them.

• Key Benefit: Off-chain data with on-chain proofs reduces gas costs by ~100x vs. minting a full NFT.
• Key Benefit: Schema flexibility allows for revocable, private, or timestamped credentials powering projects like Optimist's Citizens' House.

Your LinkedIn profile, university degree, and work badges are locked in corporate databases. SBTs create a self-sovereign, verifiable CV.

• Key Benefit: Instant, fraud-proof verification for employers and DAOs.
• Key Benefit: Enables skill-based token-gating for freelance platforms and professional guilds.

Traditional points are a black-box liability on a company's balance sheet. SBTs turn loyalty into transparent, user-owned assets.

• Key Benefit: Creates provable customer lifetime value that can be used for governance or exclusive access.
• Key Benefit: Interoperable rewards—an airline's SBT could unlock perks with a rental car partner protocol.

Token-weighted voting is broken; whales and mercenary capital dictate protocol direction. SBTs anchor voting power to a provable, unique identity.

• Key Benefit: Enables one-person-one-vote or contribution-based governance models.
• Key Benefit: Mitigates airdrop farming and governance attacks by making reputation non-financializable.

DeFi's over-collateralization requirement locks out ~$10T+ in real-world credit markets. SBTs enable on-chain credit scores based on immutable transaction history.

• Key Benefit: Enables trust-minimized lending without 150% collateral ratios.
• Key Benefit: Creates composable financial identity, portable across protocols like Aave, Compound.

Your contributions on Gitcoin, Optimism, and Ethereum exist in silos. SBTs create a portable, verifiable resume, making reputation a first-class on-chain asset.

• Key Benefit: Cross-protocol recognition for builders and users.
• Key Benefit: Reduces redundant KYC/AML checks, lowering user onboarding friction.

The core infrastructure for issuing and verifying SBT-like attestations on-chain and off-chain. It's the schema registry for the reputation layer.

• Key Benefit: Schema-based flexibility for any attestation type (KYC, skill, review).
• Key Benefit: Permissionless and decentralized, avoiding vendor lock-in to a single issuer.

Replace admin-controlled allowlists with dynamic, SBT-gated access. Your token becomes your key to DAO tools, beta features, or IRL events.

• Key Benefit: Automated, transparent permissions that scale with community growth.
• Key Benefit: Enables new business models like subscription NFTs or time-bound membership.

A lost private key or a malicious attestation becomes a permanent scar. SBTs lack the revocation mechanisms needed for real-world use cases like professional licenses.

• Key Benefit: Forces innovation in social recovery and time-locked revocations.
• Key Benefit: Highlights the need for layered identity systems (e.g., Vitalik's "Souls with Sunsetting").