Ethereum co-founder Vitalik Buterin proposed a new concept of non-fungible tokens that will be impossible to transfer. And he explained what advantages they can have in comparison with conventional NFTs.
Vitalik Buterin published an article in which he urged the community to think about NFT use cases that could not be transferred or sold to other users, disidentifying with their original owners.
To describe the properties of these collectible tokens, Buterin used the word “soulbound” from the game World of Warcraft, meaning the player’s spiritual connection with some item that cannot be separated from this particular player. Buterin believes that a similar concept can be applied to NFTs.
The co-founder of Ethereum acknowledged that ordinary non-fungible tokens can indeed have value and be used to support artists or charitable causes. However, the NFT industry represents a vast and underexplored space that could have room for non-transferable NFTs, Buterin said.
He cited as an example a situation where the ability to transfer unique tokens cannot be called their positive property. For example, if one user offers another NFT for completing task X, no one will be able to understand whether the person completed this task on his own or delegated it to another person. According to Buterin, POAP (proof of attendance protocol, “proof of attendance”) has become an example of a protocol that implements the idea of non-transferable NFTs. This is a standard by which projects can send NFTs that prove that their recipient was personally involved in a particular event. It does not matter if the owner of this NFT paid someone to participate in the event or not. It is much more important whether this particular person was present at it.
Buterin suggested that control rights have many of the qualities of non-transferable NFTs. Buying regular governance tokens outright could result in any people who own the majority of those governance tokens “taking power.” The problem can be solved by linking governance tokens to key stakeholders in the network or organizations. For example, NFT citizenship may only be available to real residents of a city or country.
However, in the case of widespread adoption of the proof of humanity, the issue of confidentiality becomes even more acute. Therefore, new technological developments will be required to prevent a person’s actions performed on the network from becoming publicly available when his face is recognized. To do this, zk-SNARK zero-knowledge proofs can be used, Buterin added.
“By creating ‘soulbound’ items in the cryptocurrency space, NFTs will no longer be focused solely on money. They will represent not only what you can afford, but they will also speak about who you are. This will expand the possibilities of blockchain technology,” wrote Vitalik Buterin.
Last year, the Ethereum co-founder said that collectible tokens should solve social problems, and not just be used to tokenize art objects.
