According to an official release, the cryptocurrency exchange known as Binance has plans to distribute a token known as “souldbound” on the BNB blockchain. This token will be given to all customers who satisfy the “know-your-customer” (KYC) standards.
Tokens issued by Soulbound are one of a kind and cannot be traded or sold to another party. In this context, they serve the function of an identity passport throughout the BNB chain. Users who would like their identity not to be broadcast over the whole network have the option to opt-out of using the token.
What are NFTs?
Non-fungible tokens, also known as NFTs, are a special kind of asset that may be stored on blockchains and provide its holders the ability to demonstrate ownership of a physical or digital object. The ownership of a non-fungible token (NFT) may often be purchased and sold since each NFT is one of a kind and cannot be copied in any way.
NFTs are not associated with any one individual or organization in particular, and a recent survey on Twitter found that the primary reason people purchase NFTs is to increase their financial security. Popular non-fungible token (NFT) projects such as CryptoPunks or Bored Ape Yacht Club may resell for hundreds of thousands of dollars on markets like as OpenSea. This fosters an ecosystem in which NFTs move hands regularly to whomever the best bidder may be.
What is Binance?
The Binance Exchange is a prominent digital currency trading platform that was established in Hong Kong in the year 2017. The trading of alternative cryptocurrencies is shown prominently throughout. Trading in more than 600 different cryptocurrencies and virtual tokens is available via Binance. These cryptocurrencies and tokens include Bitcoin (BTC), Ether (ETH), Litecoin (LTC), Dogecoin (DOGE), and Binance Coin, the exchange’s token (BNB).
The Binance exchange is mostly well-known for trading between two different cryptocurrency pairings, which is known as crypto-to-crypto trading. The Binance exchange also offers one of the lowest transaction costs that are associated with cryptocurrency exchanges. It has high liquidity, and customers who pay with native BNB cryptocurrency tokens are eligible for discounts on their purchases.
When was the announcement first made?
In a blog post that was published in January 2022, Buterin was the first person to describe the notion of “soulbound” assets on the blockchain. After picking up, strong “soulbound goods” in the online role-playing game World of Warcraft cannot be traded or sold to another player once they have been acquired by a player.
He stated this in his post. In May 2022, Ethereum co-founder Vitalik Buterin, economist Eric Glen Weyl, and lawyer Puja Ohlhaver came up with the idea of soulbound tokens (SBT). This was done to solve the restrictions that are now present in NFTs and other types of decentralized frameworks. The following is an explanation of what soulbound tokens are as well as how they function.
Final Thoughts
According to the publication, Binance’s soulbound token, which will be known as Binance account bound (BAB), would let users engage in “building projects” while collecting incentives for their efforts. In January, Vitalik Buterin, one of the people behind the creation of the Ethereum blockchain, published a blog post in which he introduced the idea of soulbound tokens. He defined the new asset class as non-transferable digital tokens that symbolize a social identity in a society that is governed by a decentralized consensus.
At present, the usage of KYC in cryptocurrency came under severe attention after decentralized exchange dYdX urged its customers to pass a “liveness check” utilizing webcam technology. Several users commented on the antagonistic connection between decentralization and KYC.
