Binance will be issuing Binance Account Bound (BAB), the first-ever Soulbound Token (SBT), which has been built on the BNB Smart Chain. Initially, it will be introduced as a pilot project and will be accessible only through the Binance mobile app.
The BAB will be an opt-in feature that will enable those Binance users who are in compliance with Know Your Customer (KYC) to mint the token directly on their wallets while using the platform. It will function as online identification for Binance. Moreover, BAB can be leveraged by third-party protocols to confirm BAB tokens for a myriad of activities such as avoiding bots, airdropping NFTs, and a DAO using it for quadratic voting, etc.
An official statement says Binance may issue other types of BAB tokens in the future as DeSoc use cases evolve. Changpeng Zhao, Binance CEO, said SBTs will play a significant role in the way Web3 credentials will work in a decentralized society (DeSoc). It will transform how users connect, as blockchain technology will give society greater authority to determine how communities interact based on their credentials or affiliations. CZ said the cryptocurrency exchange will collaborate with the community to work on new use cases for the BAB token to develop the revolutionary vision of a decentralized society.
The BAB token is a non-transferable and non-financialized token. Its transferability may not be in the best interest of decentralization and can be problematic in regard to the distribution of governance power. In other words, BAB is different from traditional crypto assets like Bitcoin and Ethereum which represent momentary sums. Vitalik Buterin, the founder of Ethereum, first introduced the concept of SBT with E. Glen Weyl and Puja Ohlhaver. The SBT could potentially form an essential building block for the decentralized society.