Cryptocurrency trade Binance introduced on Monday the launch of the Binance Account Bound (BAB) token. This is the first Soulbound Token (SBT) based mostly on the BNB Smart Chain.
In impact, the digital asset serves as proof that a Binance user has efficiently accomplished Know Your Customer (KYC) necessities on the platform.
“BAB tokens will seem in customers’ wallets to underline that their KYC has been efficiently accomplished. The token basically certifies the user’s verified standing on Binance and will probably be obtainable for third-party protocols,” Binance stated.
KYC on Binance
As Binance notes, the token is non-transferable and solely the user who owns the token can withdraw it. This is as a result of it’s a distinctive token that’s issued solely after KYC is accomplished.
According to the trade, in the preliminary part, the token will function a pilot mission, which will probably be accessible solely on the Binance app. This permits KYCed Binance customers to create their very own BAB on the wallets they use on Binance.
When issuing a token, customers will probably be requested to choose the pockets tackle the place SBT resides – present or create a new one.
“However, the potential of Soulbound Tokens goes far past the authentic implementation of the preliminary part. Realizing a decentralized society would require extra than simply the monetary points we have seen up to now.”
Web 3.0 credentials
According to Binance, the non-transferability of SBTs creates a sense of duty amongst customers. That is, the token conveys the concept of ”greater than a sum of cash”:
“They spotlight the related Web 3.0 credentials they provide. For instance, Binance BAB tokens serve to describe whether or not customers have efficiently handed the KYC course of. This implies that the BAB token acts as a Binance ID.
According to the trade, these “credentials” assist remove issues with airdrops and even bots, serving to to create a secure and accountable house.
Additionally, dApps can use tokens to decide how they work together with customers.
Impact on protocol administration
Binance notes that the launch of SBTs may have helpful results on protocol governance. Because, in fashionable circumstances, it’s potential to give indicators of management, change the “energy” of fingers and focus pursuits.
Furthermore, the trade exhibits that transferability typically begins with buying energy that isn’t in the greatest curiosity of decentralization.
The idea of SBT was launched earlier this 12 months by Ethereum creator Vitalik Buterin.
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