Soulbound Token

A soulbound token (SBT) is a token that cannot be transferred: once issued to a wallet, it stays there permanently, or can only be revoked by the issuer. The idea, popularized in a 2022 paper co-authored by Ethereum's Vitalik Buterin, is to represent things that should belong to a person rather than a market — credentials, memberships, reputation, attendance records.

Because the token cannot be sold or given away, holding it means something a tradable NFT cannot: it proves the wallet itself earned or received the item. For example, a university could issue diplomas as soulbound tokens, or a DAO could issue non-transferable badges to members who completed governance work, so voting power or access reflects actual participation instead of purchasing power.

A common misconception is that soulbound tokens prove a specific human is behind a wallet; they only bind the record to an address, and identifying the person requires separate identity verification. Practical challenges include what happens when someone loses their keys (some designs allow reissuance through social recovery) and privacy, since permanent public records of affiliations can be sensitive. SBTs are one building block in the broader effort to give blockchains a notion of identity and reputation.