This article is a brief overview of the great article “Decentralized Society: In Search of the Soul” by E. Glen Weil, Puja Olhaver, Vitalik Buterin.
Web3, as a technology, is used for some finite digital assets, but says little about social relationships. Today we’re going to look at non-exchangeable, “soulbound tokens” (SBTs).
What are SBTs?
It is not some ultimate asset, but a set of social indicators – a way to create a kind of “network of trust” between “souls” that includes accumulated data about the reputation, important social attributes of the SBT owner. With the SBT concept, decentralized societies (DeSoc) can be organized with the ability to share governance and decision-making in common projects and organizations.
SBTs would represent tokens that the owner would receive based on work experience, education, and other important accomplishments. The tokens will reflect reputation, representing the digital resume of their owner. The important difference between these tokens and conventional NFTs is that you can receive them, but you cannot give them to anyone – just like in the real world you can literally sell your education to someone.
More globally, SBTs allow you to:
- establish and validate the origins of a “soul”
- create digital organizations based on the regalia that “souls” possess
- unlock a lending market that requires participants’ reputations for lending relationships
- provide decentralized management of organizations and assets
Fields of application
The sphere of application can be art – as a proof of ownership of some creative object, which is attached to the “soul” (thus, no one can appropriate the authorship of someone else’s work that is digitized in the form of NFT).
In addition to art, one can imagine the use of SBT in any areas where authentication, reputation is required – for example, the rental or real estate purchase market, where the reputation of the seller and the reliability of the data he provides about his object means a lot.
The possibility of direct authentication by algorithms can level the problem of fake data, the use of blockchain technology will help to determine the authorship, the time of creation of a particular photo or video.
How SBTs can be assigned
So, the key element is a “soul” (an account or wallet) that represents the persona with accumulated SBT tokens. These tokens are publicly available, non-interchangeable (possibly with the possibility of revocation by the issuer). By saying publicly available, we focus on the idea of publicity and transparency, although the concept of limited publicity is also possible at the request of the owner.
First of all, the token can be “self-certified” – it can contain data about education, work experience, creative works of a particular “soul”.
The second stage is when the individual “soul’s” self-given SBT can be validated and witnessed by the participants in the business relationship – for example, the company will validate work experience.
And the third stage is when participants can issue SBT tokens to “souls” with whom they have had relationships of any nature that validate something. For example, participants in a conference or training might receive tokens from the organizer that would validate participation. Or a sports team could assign membership confirmation tokens to its players. The options are many.
What if the “soul” has been lost?
Classical recovery methods are not applicable when we are talking about an entity that holds an important personal history, which may act as a guarantor or reputation.
In this case, it is possible to recover the “soul” with the help of a trusted circle, which could confirm, verify the data of a particular “soul” anew, restoring with a majority vote the data that was recorded in the SBT tokens.
Souldrop
Airdrop cryptocurrency is a strategy to promote new tokens by giving away native cryptocurrency to potential users.
If we consider SBT tokens as a mechanism for giving out reputation or decision-making rights from some organization to a particular soul, the token distribution can be done based on the data the “soul” already has – for example, to create a developer community, you can share tokens only with “souls” with whom SBT tokens are associated with attending large development conferences. This approach could be called souldrop.
Social Uproar within a DAO
Distributed Autonomous Organizations (DAOs) are virtual communities united by a purpose and making decisions through voting via smart contracts.
Within such communities, uprooting is important to help confirm that the “soul” who votes for a decision is not a bot, and that the results of the vote will be honest. What is possible:
- calculating the connections of the “soul” to establish whether it and its environment are fake
- giving more votes to “souls” who own
- authoritative SBT tokens – education, position, certificate, license – that carry weight in decision making
- issuing special “identity confirmation” tokens to be issued by authorization centers, e.g. by documents
New methods of distributing property rights
Web3 allows to alienate the rights to some digital object, but its mechanics do not allow, for example, to reproduce the lease of some property. However, with SBT-tokens this may be possible – the emergence of a new type of transfer of rights to physical or virtual objects.
Here are a few examples:
1. Allowing access to private or public resources that can be issued by an individual or organization – cars, houses, parks, museums
2. Allowing access to the results of some kind of scientific research
3. Allowing any rules, such as the ability to park a car outside a particular office building
4. Involvement with SBT of “souls” who have disabilities – minors, immigrants. In this case, they can belong to a community (family or immigration center), which can give them the necessary rights.
Difficulties of implementation
For all the seeming logic and social validity of the DeSoc system, it has some shortcomings that require reflection.
For example, the confidentiality of data “souls”: on the one hand, open data provides transparency and full interaction between organizations and individuals, on the other hand, too open data can jeopardize the security of the person – someone can use the knowledge to their detriment.
We may also encounter the phenomenon of “souls” cooperating to create a fake story for each other, giving uproar to facts that are not true. Thus, the weakness of the system is the desire of “souls” to gain maximum access and influence by any method that DeSoc allows.
In lieu of a bottom line
The potential opportunities that DeSoc offers are worth working through the perceived complexities of privacy and data veracity. With a decentralized relationship system, for one thing, it’s much easier to build strong communities; for another, it creates communities that make decisions based on the authority of each member.
Yes, there are a lot of questions, and expect there to be a big research program on the possibilities of decentralized societies that will help find all the right answers.
CEO and Founder of Cryptoconsulting,
Expert in web3 technologies – Kotov Dmitry