What is Tombstone Soulbound?

What Is a Soulbound Token?

A Soulbound Token (SBT) is a non-transferable on-chain credential permanently tied to a specific wallet address, commonly used to represent identity, qualifications, or achievements. Think of it as a “badge” affixed to your address—no one else can take it from you or sell it on your behalf.

The defining feature of a Soulbound Token is its non-transferability. Holders cannot send this token to others, nor can it be traded on secondary markets. SBTs are typically issued by applications or organizations—such as schools, communities, or event organizers—to grant certificates of graduation, membership, or attendance. The concept was introduced by the community in 2022 to address the limitations of “tradable NFTs” in representing identity and reputation.

How Do Soulbound Tokens Work?

Soulbound Tokens use smart contracts to enforce non-transferability. Smart contracts are self-executing code deployed on blockchains, ensuring consistent interaction rules for all participants.

At the contract level, this often involves disabling transfer-related functions. For NFT-based implementations, functions like transfer and approve are deactivated, allowing only the issuer to mint (issue) or revoke tokens. In technical discussions, addresses are referred to as “souls,” denoting the entity to which credentials are bound.

To promote standardization, the community has proposed multiple interfaces—for instance, minimal lock-state interfaces (like EIP-5192) and account-bound token proposals (such as EIP-4973). As of 2024, these standards provide developers with practical reference implementations for wallet recognition and display.

Real-world demands also require mechanisms for “revocation, expiration, and recovery.” Some implementations include revocation or expiration features to handle errors or invalid qualifications. “Social recovery” designs allow pre-designated trusted contacts to help associate a new address with an existing identity if a key is lost, reducing the risk of credential loss.

What Are the Use Cases of Soulbound Tokens?

Soulbound Tokens enable on-chain representation of verifiable experiences or credentials, making it easier for applications and automated systems to identify qualified participants and trigger access or rewards.

In education and professional sectors, institutions can issue SBTs as digital diplomas or certificates to graduates or exam passers. Employers and apps can verify credentials simply by checking the presence of these tokens at a given address.

In community and event settings, organizers can issue SBTs as proof of attendance, recording participation history and granting perks such as ticket discounts or airdrop eligibility. These “attendance badges” help build long-term reputation profiles.

Within DAO governance, SBTs can represent contribution levels or long-term engagement, adjusting voting power and mitigating sybil attacks (fake account manipulation).

For decentralized app access and incentive programs, project teams may use Soulbound Tokens as whitelist credentials—only addresses holding specific tokens are eligible for early testing or rewards. In Gate’s Web3 activity ecosystem, users who complete tasks via wallet interactions receive non-transferable credentials in their wallets, serving as admission for future events.

In credit and compliance scenarios, SBTs can encode proof of verification—such as successful identity checks—using selective disclosure techniques to prove eligibility without exposing sensitive details.

How Do Soulbound Tokens Differ from NFTs?

Both SBTs and NFTs are on-chain assets recognized by wallets, but their core differences lie in transferability and intended use. SBTs are non-transferable and focus on “who did what” or “what qualifications are held”—serving identity and reputation functions. NFTs are generally transferable and represent “ownership of tradeable assets”—serving trading and collectible functions.

Value formation also differs. SBT value derives from the issuer’s credibility and application acceptance (e.g., universities, professional associations, reputable communities), while NFT value is primarily determined by market supply and demand.

Market dynamics diverge as well: SBTs have no secondary market and resemble resumes; NFTs are frequently listed, bid on, and traded in open markets. For wallet management, SBTs emphasize revocation, expiration, and privacy controls; NFTs prioritize custody and trading convenience.

How Are Soulbound Tokens Issued and Bound? What Should Projects Consider?

The issuance of Soulbound Tokens centers on defining credentials, restricting transfers, planning revocation/recovery processes, and managing privacy and display.

Step 1: Define Credential Model. Clearly specify what fact is being attested (“completed course,” “passed review,” “attended event”), its validity period, whether revocation is possible, and any necessary metadata notes.

Step 2: Choose Blockchain and Standard. For EVM ecosystems, consider community proposals such as EIP-5192 (lock marker) or EIP-4973 (account-bound tokens) for mainstream wallet compatibility.

Step 3: Enforce Non-Transferability. Disable transfer and approval functions in the contract; retain only issuance and revocation capabilities. Design for batch issuance and event logging to facilitate indexing and querying.

Step 4: Address Privacy and Compliance. Limit on-chain data to the minimum necessary; store sensitive information off-chain with only hash fingerprints recorded on-chain. When proof-of-eligibility is needed, combine with zero-knowledge proofs so users can demonstrate qualification without revealing details.

Step 5: Design Recovery and Appeal Processes. Allow for revocation, replacement, or reissuance to new addresses; set up manual or multisig approval processes to prevent misuse.

Step 6: Integrate with Applications and Displays. Ensure wallet and frontend integration marks these as non-transferable credentials; in event/task systems, use “holding a specific SBT” as an access condition. For exchange users, Gate’s Web3 tasks enable claim-by-signature issuance for wallet-based credential display.

Step 7: Test and Audit. Conduct end-to-end testing on testnets—covering revocation errors, address loss, batch issuance edge cases—and perform contract audits and risk drills before mainnet launch.

How Do Users Interact with Soulbound Tokens? What Preparation Is Needed?

Users should focus on how to claim SBTs, view them, protect privacy, and secure keys.

Step 1: Prepare Wallet and Keys. Create a self-custody wallet and securely back up the mnemonic phrase. If using an exchange wallet tool, ensure it connects to relevant networks and DApps.

Step 2: Complete Claim Process. Issuers typically provide a claim page; users sign with their wallet or pay minimal gas fees to mint the SBT to their address.

Step 3: View in Wallet. Supported wallets or asset pages will display SBTs as “non-transferable credentials” or “badges.” For Gate Web3 activities, credentials appear in the wallet or achievement page for easy future event participation.

Step 4: Manage Privacy and Addresses. Separate SBTs that may reveal real-world identity from daily-use funds by using different addresses; avoid publicly exposing primary addresses.

Step 5: Handle Losses and Changes. If keys are lost, follow issuer-provided appeal or social recovery procedures to migrate credentials to a new address; if credential info is incorrect, request revocation and reissuance.

What Risks and Controversies Do Soulbound Tokens Face?

Privacy exposure is a primary risk. Storing real-world credentials on-chain could allow unrestricted querying and profiling. Mitigation strategies include minimizing on-chain data and using selective disclosure/zero-knowledge proofs to prove eligibility without exposing details.

Centralized issuance and mis-issuance risks must not be overlooked. Excessive issuer power could lead to abuse or improper revocation. Best practices involve auditable issuance standards, on-chain revocation records, multisig approvals, and holder appeal rights.

Address loss and strong binding introduce usability-security tradeoffs. Non-transferability enhances anti-counterfeiting but makes credential migration difficult if keys are lost—social recovery, timelocks, or trusted contact mechanisms should be designed up front.

Social risks include labeling and discrimination. Overt marking can lead to unfair filtering or “qualification discrimination.” Privacy-friendly solutions should offer “proof-only” methods with options for users to hide or not display SBTs.

Compliance and regulatory landscapes are evolving. Jurisdictions vary in their approach to on-chain identity/credentials—projects should seek legal advice; users should exercise caution in sensitive contexts.

What Are the Trends in Soulbound Token Development?

Standardization and interoperability are advancing. Minimal lock-state interfaces (EIP-5192), account-bound token proposals (EIP-4973), and similar initiatives enable unified wallet recognition and display (as of public discussions up to 2024).

Integration with verifiable credentials (VCs) and decentralized identifiers (DID) is deepening—combining on-chain fingerprints with off-chain attestations plus zero-knowledge proofs for selective disclosure.

Applications are shifting from single-point badges toward multidimensional reputation—layering education records, developer contributions, governance activity, compliance verification—for richer user credit profiles that support precise access control and incentives.

Tooling and user experience continue to improve—with more wallets, explorers, task platforms supporting “non-transferable credential” categories; templated issuance tools; established audit/risk processes lowering integration barriers.

Key Takeaways on Soulbound Tokens

Soulbound Tokens encode qualifications and experiences at the contract level by prohibiting transfers—making them ideal as identity or reputation credentials rather than tradeable assets. The main differences from NFTs lie in purpose and liquidity: SBTs answer “what have I verifiably done,” while NFTs answer “what tradeable assets do I own.” In practice, projects must design issuance standards, privacy safeguards, revocation/recovery mechanisms, and compliance boundaries; users must manage addresses/disclosure scopes to avoid privacy leaks. As standards/tools mature—and integration with VCs/DIDs/zero-knowledge proofs advances—SBTs are poised for continued adoption across education, communities, governance, and access incentives. Nonetheless, privacy protection and governance remain critical long-term considerations.

FAQ

Do Soulbound Tokens Restrict My Asset Freedom?

Soulbound Tokens do restrict traditional asset liquidity by being non-transferable—but this is intentional: binding tokens to identity prevents fraud and speculation. You retain full ownership of your SBTs—they can always be viewed and utilized for any associated rights—just not sold or transferred to others.

Can I Recover a Lost Soulbound Token?

If your SBT is tied to your wallet address, it remains on the blockchain indefinitely; however, losing your private key means you cannot access it. Always keep your private key secure or use wallets with recovery options. Enable security features when using platforms like Gate to prevent account theft.

Can I Hold Multiple Soulbound Tokens at Once?

Yes—a single wallet address can hold multiple SBTs, each representing different credentials across contexts (e.g., alumni status from a school plus an on-chain trading rank). Collectively, these tokens reflect your overall identity profile.

Do Soulbound Tokens Affect My Privacy?

SBTs serve as identity authentication tools that record certain attributes on-chain. While blockchain transparency is inherent, most projects implement privacy-preserving techniques (such as zero-knowledge proofs) to shield sensitive data. Always review a project’s privacy policy before use to assess your personal needs.

How Are Soulbound Tokens Used Cross-Chain?

Currently, most SBTs reside on a single blockchain; cross-chain applications remain experimental. However, cross-chain bridge technologies enable your identity data to be recognized by apps on other chains. Platforms like Gate may support cross-chain identity verification in the future—allowing your reputation to travel across ecosystems.