ERC-5114

ERC-5114 tokens are non-transferable by design, binding them permanently to the wallet that first receives them. This makes them ideal for:

• Proof-of-Attendance Protocols (POAPs) that cannot be bought or sold.
• DAO membership badges to ensure one-person-one-vote governance.
• On-chain credentialing for verifiable skills or achievements that are tied to an individual.

The standard introduces a mandatory public state variable, bool public locked, which is set to true upon minting. This flag prevents the transfer and approve functions in compliant contracts from executing, enforcing non-transferability at the protocol level. This is a simpler, more explicit mechanism than previous attempts using revert statements in _beforeTokenTransfer hooks.

While built on the familiar ERC-721 metadata interface, ERC-5114 is fundamentally different:

• ERC-721/1155: Assets are fungible or non-fungible commodities meant to be traded.
• ERC-5114: Tokens are non-transferable attestations of identity or status.
• Key Distinction: ERC-5114's locked flag provides a standardized, chain-readable guarantee of soulbinding, whereas previous implementations were custom and not interoperably detectable.

ERC-5114 badges act as composable building blocks within broader decentralized identity frameworks. They are designed to be used with:

• Ethereum Attestation Service (EAS): Badges can represent attested claims.
• Verifiable Credentials (VCs): Providing the on-chain, immutable component of a VC system.
• DAO Tooling: Platforms like Snapshot can use badge ownership for weighted voting or gated access.

Adoption is driven by projects needing cryptographic proof of unique personhood.

Drivers:

• DAO governance integrity.
• Authentic community building (e.g., contributor recognition).
• Compliance with regulations requiring non-transferable licenses.

Limitations:

• Loss of Key: A lost private key means the badge is permanently inaccessible, unlike a transferable asset which can be moved to a new wallet.
• Immutability: Badges cannot be revoked or burned by the issuer by default, requiring careful upfront design.

A protocol like Ethereum Attestation Service could issue an ERC-5114 badge to a developer who completes an audit.

Flow:

1. An attester (e.g., a security firm) mints a "Certified Auditor" badge to the developer's address.
2. The badge is locked to that address forever.
3. The developer can now use this badge as a verifiable credential when applying for audit work, proving their certified status in a sybil-resistant way.

This creates a portable, trust-minimized reputation system.

The core security mechanism of ERC-5114 is its immutable non-transferability. Once minted to a Soul (an EOA or smart contract wallet), the badge cannot be moved, sold, or traded. This is enforced at the protocol level, preventing common attack vectors like phishing for private keys to steal transferable assets. The standard's transfer and safeTransferFrom functions must permanently revert, making the badge a permanent attribute of the recipient's on-chain identity.

A critical design decision is defining who holds revocation rights. The standard allows an issuer (the deploying contract) to burn badges. This introduces centralization and trust considerations:

• Centralized Issuer: A single entity controls revocation, creating a point of failure.
• Decentralized Governance: Revocation logic can be governed by a DAO or multisig for collective oversight.
• Automated Rules: Revocation can be triggered by on-chain events (e.g., a governance vote). Improper access control on the burn function is a major security risk, as a compromised issuer could arbitrarily destroy user reputation.

ERC-5114 badges derive value from being bound to a unique, persistent identity. The primary design challenge is ensuring Sybil resistance—preventing a single entity from obtaining multiple badges by creating many wallets. Common mitigation strategies include:

• Integration with Proof-of-Personhood systems (e.g., World ID, BrightID).
• Requiring a history of on-chain activity (gas spent, tenure).
• Linking to off-chain verified identity (KYC). Without Sybil resistance, badges can be gamed, undermining their reputation and governance utility.

As a reputation primitive, ERC-5114 badges are designed to be read by other smart contracts (composability). This requires careful interface design:

• Standardized Interface: The balanceOf and ownerOf functions allow protocols to easily query badge ownership.
• Attestation Layers: Badges can be used as inputs for attestation frameworks like EAS (Ethereum Attestation Service) to create verifiable claims about the badge holder.
• Access Control: Other dApps can gate features (e.g., governance weight, mint allowances) based on badge ownership. Ensuring these external calls are gas-efficient and secure is a key design goal.

Badge metadata (name, image, description) is typically stored off-chain via a URI (often IPFS). Key security considerations include:

• Immutable vs. Mutable Metadata: Should the issuer be able to change the badge's image or description after minting? Immutable metadata provides stronger guarantees.
• Permanence: Using decentralized storage (IPFS, Arweave) prevents link rot and censorship.
• Schema Standards: Adhering to metadata standards (like those for ERC-721) ensures wide compatibility with wallets and explorers. Smart contract upgradability for the issuer contract must be handled with extreme caution to avoid breaking the non-transferability guarantee.

By permanently linking badges to a Soul, ERC-5114 creates a public, immutable social graph of affiliations and achievements. This has significant privacy implications:

• Public History: All past badge awards (and revocations) are permanently visible on-chain.
• Analysis Risks: Sophisticated analysis can infer personal details or behavior patterns from badge holdings.
• Mitigations: Users may employ smart contract wallets or identity proxies as their Soul to add a layer of indirection. However, the fundamental transparency of the blockchain limits true privacy for on-chain reputation systems.

Soulbound Tokens (SBTs) are non-transferable tokens that represent credentials, affiliations, or commitments, bound to a single crypto wallet or "Soul." Proposed by Vitalik Buterin, they are the conceptual foundation for ERC-5114, which provides a standardized registry to manage and discover these tokens. Key characteristics include:

• Non-Transferability: Cannot be sold or traded, ensuring provenance.
• Attestation: Represent verifiable claims about an identity.
• Composability: Can be used by other smart contracts for permissioning or reputation.

ERC-721 is the foundational standard for non-fungible tokens (NFTs) on Ethereum, which ERC-5114 extends. While ERC-721 tokens are typically transferable assets, ERC-5114 repurposes its metadata and ownership mechanics for non-transferable identity tokens. A key technical link is that ERC-5114 registries can list SBTs implemented as ERC-721 tokens with transfer functions disabled or overridden.

Decentralized Identifiers (DIDs) are a W3C standard for verifiable, self-sovereign identity that does not rely on a central registry. ERC-5114 registries can serve as a component within a DID ecosystem on Ethereum. The registry acts as a discoverable public ledger of credentials (SBTs) associated with a DID controller's address, enabling interoperable identity verification.

Attestations are statements made by an issuer about a subject. In web3, these are often implemented as digital Verifiable Credentials. An ERC-5114 Soulbound Token is a specific on-chain implementation of a verifiable credential. The registry standardizes how these attestations are published and queried, making it easier for verifiers to check a user's credentials across different applications.

ERC-20 is the standard for fungible, interchangeable tokens (like cryptocurrencies). It provides a critical contrast to ERC-5114's purpose. While ERC-20 governs transferable economic value, ERC-5114 governs non-transferable social or identity value. Understanding this dichotomy is key to designing tokenized systems that separate financial assets from persistent identity attributes.

The Registry Pattern is a common smart contract design where a single contract maintains a canonical list or mapping of items. ERC-5114 formalizes this pattern specifically for Soulbound Tokens. Its core functions—register, unregister, and getRegistry—provide a universal interface for applications to query which SBTs are associated with any given Ethereum address, promoting interoperability.