Soulbound tokens hold immense potential to unlock unexplored territory in Web 3.0, by being the catalyst to unlock the emergence of a decentralized society. Basically soulbound tokens are similar to on-chain NFTs, except they cannot be transferred to another wallet. At first glance, this greatly diminishes SBT use cases because the name of the game in crypto has always been trading and profit, but Ethereum founder Vitalik Buterin believes that this non-transferability will be key to spur on the crypto industry’s next evolution.
After all, if a SBT is non-transferable, the information it denotes must be authentically linked to the account that holds it. This is why soulbound tokens can further transparency and legitimacy in an industry that sometimes sorely lacks it. Due to these considerations, we’ve decided to take the lead amongst exchanges by making our Phemex Soul Pass a soulbound token to act as a permissionless gateway for the Phemex Web 3.0 ecosystem.
On-chain Reputation with SBTs
Trust is the fundamental fuel that greases the wheel of a decentralized world. It’s the most tricky piece of the puzzle, because a decentralized society promises anonymous identities that are connected by the blockchain and smart contract code. Soulbound tokens resolve the trust-building issue, as their non-transferable properties make them authentic indicators of their holder’s digital identity and reputation. With SBTs, there is little room for manipulation because anyone can trace the token’s minting and issuance history on the blockchain to verify its authenticity. Eventually, SBTs will also comprise of all online credentials including work and education history.
Since the Phemex Soul Pass is a soulbound token, it essentially serves a record-keeping function for credentials and achievements accumulated on the Phemex platform. And as our Web 3 ecosystem of Phemexia expands, these credentials can be used to verify one’s qualifications into various new events and services. The simple act of having a PSP shows the internet that you are a strong community member within Phemex, and that’s why we reward Phemex Soul Pass holders with opportunities such as xPT pre-mining. Since the PSP cannot be transferred or sold, these achievements and rewards are guaranteed to always stay with the deserving individual.
Phemex Builds Toward a Decentralized Society
The foundation of Vitalik Buterin’s concept for a decentralized society is a permissionless, immutable trust system that other decentralized apps can use as a point of reference. Because the Phemex Soul Pass SBT enables a unique structure that can analyze data from trading activity, community involvement, and DAO contributions on our platform in a verifiable fashion, Phemex is well-positioned to develop toward such a concept. The foundation of our Web3 credential system is thus established. From there, other original applications become feasible, such as platform ownership via Phemex Tokens, DAO badges based on verifiable donations, and uncollateralized lending using decentralized credit scores. A fully developed ecosystem containing the ideas and operations of a real decentralized society will eventually emerge.