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What are soulbound tokens? What are their prospects?

Author: Joseph

Source: joseph's thoughts

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Earlier this year, V God introduced the concept of "soulbound" in his article titled "Soulbound", opening a new era of NFT. Since then, many new NFT projects have experimented with a new use case-Soulbound Tokens (SBT for short). A small number of projects have gained attention, but most have remained silent. Before we take a full look at SBT, let's quickly review its concept and the promise it brings, then introduce some common SBT projects, and analyze their prospects.

Simply put, SBT is a non-transferable NFT that can represent many things. The fact that they are non-transferable makes them a solid reputation data point, including job credentials, skill credentials, and more.

This ability to establish identity through the SBT ecosystem opens up new possibilities for Web3. For example, this could pave the way for experiments in corporate governance beyond token voting, unsecured lending in DeFi, and preventing Sybil Attacks.

Well-known projects in the field of SBT

Note: While some of these SBTs are not fully "non-transferable", they exhibit other qualities of SBTs as reputation data points.


While the term "Soulbound" wasn't coined until earlier this year, POAP has essentially taken the shape of an SBT since its inception in 2019. Among all the speculative NFTs that focus on rarity and price, POAP takes a very different approach, representing proof of your attendance at a physical or virtual event.

The idea has gained widespread attention. On Gnosis Chain (aka xDAI), over 5 million POAP have been minted since October 2020. Even in the bear market of the past few months, the demand for POAP has remained very stable, and new NFTs are constantly being minted.

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While POAP by itself doesn't tell you much about someone, it sets the stage for other SBTs to come later.

Project Galaxy

As one of the largest players in the SBT space, Project Galaxy has created nearly one million "OAT" (SBT for Project Galaxy) so far. They found success by promoting OAT as a way to build community, aka growth hacking.

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Types of activities that earn OAT include 'participating in AMAs', 'following specific accounts on Twitter', and more high-profile activities such as the recent 'Arbitrum Odyssey' , which encouraged users to connect assets to Arbitrum. Various projects, DAOs Both companies and companies have found this tool so useful that they partnered with Project Galaxy to release "OAT".

Rabbit Hole

Among players in the SBT space, RabbitHole positions itself as the leader in the “Proof of Skill” category. RabbitHole is an educational platform that guides users through a series of on-chain operations in specific areas of Web3. Like their “Getting Started with DeFi” guide, which includes on-chain actions like staking ETH on Lido, offering stETH as collateral on Aave, and providing liquidity on Uniswap. After completing these on-chain operations, users will be eligible to create a "RabbitHole Credential," which represents your skill set in that particular field.

So far, RabbitHole has a total of 35,035 certificates from 17,058 unique addresses since its launch in May 2022.

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Noox World

Of all the current players, Noox World has probably taken the most direct route to issuing SBT. Every SBT on Noox is earned through specific on-chain actions. For example, for 10 or more swaps on Uniswap, you can earn the "Uniswap Uncommon Swapper" badge.

Since its inception in May 2022, approximately 20,000 badges have been minted from 4,250 unique addresses. It’s worth noting that while all of the previously mentioned SBTs are free to mint, Noox pays a 0.002 ETH minting fee per badge. This allowed the team to accumulate around 40 ETH in total.

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Interestingly, the majority of daily claims for Noox badges occur in May. This is likely due to the overall publicity that V God's article brought to SBT. Since then, demand to mint Noox badges has slowed.


DeQuest has taken a more niche approach to the SBT space, focusing on gaming. Similar to RabbitHole, DeQuest features "Quests" that guide users through learning and exploring various games. In their "Mission" category, almost 5000 badges were minted.

The value proposition for both the user and the game is very clear. By completing these "missions," users are rewarded with SBT and money. Gaming is the mechanism by which the DeQuest community builds its user base.

Current Status and Prospects of Soulbound Tokens

Right now, we can clearly see that the SBT space is still in its early stages, with various projects trying different approaches. While some projects have gained momentum, most projects face a similar problem - lack of demand.

In my opinion, POAP is the only project that touches the matching product market. While Project Galaxy has done a good job of attracting users and projects, this is mostly due to their business outreach efforts rather than organic demand. RabbitHole, Noox World and DeQuest all saw significant drops in demand after launch.

So, if SBT is destined to be the next big hit, why haven't they taken off yet?

Quite simply, the SBT of today is not the SBT of the future.

SBT is now primarily used as an engagement tool:

  • "Participate in AMA" SBT

  • "Bridge to X" SBT

  • SBT on "Uniswap Swapped X Times"

These SBTs don't tell you much about the user. They have relatively little connotation and are often meaningless. This means that if individuals, DAOs, and businesses want to know the information of users who hold these SBTs, they often cannot find much useful information. This results in SBT holders not getting any value.

This puts the development of SBT in a bind. In order for users to seriously collect SBT, they need to derive value from it. However, in order for individuals, DAOs, and businesses to start providing value to SBT, there needs to be an ecosystem that provides meaningful SBT and users are willing to collect them.

This is a classic "chicken and the egg" problem. SBT won't take off until this problem is resolved. But as more and more projects try this field, we hope that the day of take-off will not be too far away.

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