In the last few months, the concept of soulbound tokens was attracting more and more interest as the community quickly started to understand the potential benefits that the new standard may bring to the table. Initially coined by Vitalik Buterin in his blog post, the term quickly picked up in the crypto-themed media and has been gaining popularity ever since. However, we are yet to see the broad adoption of SBTs, as there is only a handful of attention-worthy projects implementing the vision shared by many across the industry. While the new ERC token standard describing SBTs is currently still in the works, we believe that the Ethereum developer community already has the understanding and ideas required to start building soulbound token projects.

In the meantime, some projects focus on personified NFTs that implement ideas similar to Soulbonds - an NFT that uniquely reflects its owner's actions. In this article, we would like to briefly explore these projects and see what they have in common and how they differ. It's not all about SBTs - some projects allow transfers and sales. However, as noted in the original SBT paper, many existing NFT projects that focus on reputation and identity could benefit from adopting the standard.

One of the most obvious ideas that come to mind when one thinks about SBTs and, more broadly, about digital reputation is the gamelike concept of achievements. If NFTs that we are all already used to can be considered as unique but tradable and exchangeable items, some things in games aren't achievable via a simple purchase. Some things have to be earned through hard work and dedication, and players value those items (even though they can be just cosmetic) the most. NFTs can serve the same purpose in relation to on-chain or even real-life events.

One of the first examples of this is the Proof of Attendance Protocol (POAP), which allowed event organizers to mint exclusive NFTs that can be distributed to attendees. Many prominent figures in the space started collecting blockchain conferences, events, and hackathons badges. Your POAP collection of tokens can become a way to verify your expertise and involvement in the industry.

The team behind the prominent DeFi wallet recently rolled out their NFT avatar for its users. Flashy futuristic avatar arts are generated from user DNA - which in turn is a result of user activity in the Zerion wallet. The avatar's appearance is dynamic - it will change over time as the owner's activity transforms. For instance, the base color of accessories will shift if the user starts being active on a different chain. As users unlock and receive more advanced traits, their avatar becomes rarer.

Zerion DNA isn't exactly an SBT, though. First of all, users may mint several tokens if they wish to. Only one token may be subject to dynamic evolution at a time. At the same time, those tokens are fully transferable and are subject to resell. That means users may farm tokens with rarer traits and resell them to those willing to invest or showcase their wallet history.

Another good example of an ecosystem-based NFT is non-fungible Cheshire cats by Opium protocol. Users of the protocol may mint their Cheshire cat for free - just like in the previous case, and the avatar will evolve as the user interacts with the DeFi protocol. There is very little detail about which actions and achievements are reflected in the token metadata. However, the creators stress the importance of digital reputation and verifiability of the aforementioned. Aside from the cool, dynamic, and unique art, other apps and protocols would be able to query owners' metadata and can base things like access to communities and products based on that. Cheshire cats are limitedly transferrable, as to send your token from one address to another, one would need to verify that the addresses belong to the same person.

Cryptotrunks is a collection of pixel art NFTs, the appearance of which is uniquely based on the carbon footprint of your wallet. On mint, your wallet's past activity gets analyzed, and the size of your cryptotrunk depends on the amount of Ethereum gas used by your address throughout its history. Cryptotrunks are tradeable, and numerous tokens can be minted for a single wallet, so there is no soulboundness here either. However, minters with extensive wallet histories have had rarer and more expensive trunks and thus were able to take more profit from selling some of their trunks. In a way, the collection also explores the matter of reputation and on-chain experience but does this in a very light-hearted and meme-worthy way.

Here at Soulbonds, we strive to build upon our predecessors by integrating the best ideas with the state of the art software practices. To contribute to the adoption and utility of SBTs for digital reputation and identity, we made several novel improvements to the aforementioned solutions.

One big challenge we faced when working on Soulbonds was the dilemma of mutable metadata. If you have been following the space closely, you might have heard of many projects that involve some evolution or breeding mechanics so that your NFT can evolve and change over time. The problem with those projects is that they store metadata on their own centralized servers that could go down in the blink of an eye, causing NFT owners all around the globe millions of dollars in losses. It's a forced step - if creators stuck to traditional decentralized storage systems such as IPFS, the cost of changing the NFT metadata would be up drastically, especially given high gas prices. However, we managed to find a solution that avoids this entirely while keeping all your metadata safe on a decentralized network. By leveraging the power of Ceramic Network (read more about it in our first post), we ensure that your data can be stored and modified safely, freely, and rapidly.

We also believe that projects exploring the concept of digital reputation and credibility should elude the temptation to profit from secondary sales and high trading volumes, and thus we stick to full non-transferability. Soulbonds will not be able to transfer and sell their tokens, so none of the traits can be obtained by simply paying your way to a specific token. We want our owners to take pride in every detail of their avatar; we see this as the most sustainable way to move forward. One wallet, one soulbond token, only real achievements, and one hundred percent credibility of token owners.

Finally, as you have probably already noticed, many similar projects (namely Zerion DNA and Opium ID in the scope of this article) are contained within a closed ecosystem - such as a wallet or a DeFi protocol. This is great for those ecosystems - they can improve user experience and gain an edge over their competitors. With Soulbonds, we aim to extend the same gamification principles on a larger scale - to the entire Ethereum community. Everyone on the network can mint a Soulbond, and our partner will analyze everyone's activity to award people's traits. This way, we hope to extend the interest in digital identity and reputation to a larger audience, taking another step towards the mass adoption of SBTs.