Binance, the largest centralized exchange in the world, is set to launch its very own soul-bound token on the BNB Smart Chain.
“Soulbound Tokens will play a significant role in the way web3 credentials will work in a Decentralized Society… We foresee numerous use cases for the BAB token, and we will actively collaborate with the community to develop this revolutionary vision of decentralized society.”Changpeng Zhao, CEO of Binance
The Binance Account Bound or BAB is the first-ever Soulbound token (SBT) to be built on the BNB Smart Chain and it is used to signify the successful competition of Know Your Customer (KYC) on Binance.
The non-transferable token is a unique token that can only be minted by the user once they complete KYC on Binance.
What are SoulBound Tokens (SBT)?
Vitalik Buterin recently co-published a paper explaining the future of Ethereum and an idea called Soulbound tokens(SBTs).
Soulbound tokens, or SBTs, are essentially non-fungible tokens (NFTs) with a special purpose. But hold on reader, these aren’t just meme pictures – SBTs could represent a future that will revolutionize DAOs and our social interactions in the future.
What can BABs be used for?
The potential use cases of BAB are endless. For starters, the BAB token will serve to outline that users have successfully completed Binance’s KYC process and can be used as a form of identity.
As users have to KYC to obtain the BAB token, moving forward projects can enforce the use of BAB token to eradicate bots from their project.
Other than stopping bots from getting airdrops, the BAB tokens can also help improve governance issues. The current DAO (Decentralized Autonomous Organization) model is flawed in a way the distribution of governance can easily be manipulated and transferred away by buying power.
The non-transferable mechanism tied to the BAB token help to ensure there is a fair distribution of governance power which is in the best interest of decentralization.
You can read more about SoulBound Tokens here: The Next Web3 Bull Run Catalyst; Are Vitalik’s SoulBound Tokens The Future?
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
Featured Image Credit: Binance