Soulbound Token (SBT)

Overview

A Soulbound Token is a non-transferable or account-bound token used to represent identity, reputation, credentials, achievements, affiliations, or permissions.

The issuer mints the token to a wallet and restricts ordinary transfer, while revocation, expiration, recovery, and update behavior depend on the contract. The asset’s utility comes from the network that recognizes it. Users acquire or receive Soulbound Token (SBT), authorize transfers with a compatible wallet, pay applicable fees, and rely on validators or miners to include and finalize the transaction. Staking or governance uses separate transactions and lockup rules.

SBT is a conceptual category rather than one universal standard, and non-transferability does not prove that the credential is accurate, private, permanent, or legally recognized. Ownership of Soulbound Token (SBT) does not automatically provide equity, a claim on a foundation, or guaranteed governance power. Rights come from protocol rules and any active staking or voting mechanism.

Risks include privacy leakage, incorrect or malicious issuance, inaccessible wallets, issuer censorship, lack of appeal, identity correlation, and recovery that enables unauthorized reassignment. risks include software and consensus failures, validator or mining concentration, inflation or emission changes, governance capture, network outages, reorganization, fee volatility, slashing, liquidity loss, and migration to a successor chain or token.

Systems should define issuer trust, eligibility, evidence, expiration, revocation, recovery, wallet migration, privacy, selective disclosure, and verification procedure. reconciliation should store transaction hash, block reference, execution result, received base units, network fee, confirmation or finality state, and conversion rate used for settlement or refund.

When Soulbound Token (SBT) is used with Non-Transferable Token and Payment Token, reconciliation should preserve separate identifiers and risk assumptions for every asset or claim involved.