Vitalik Buterin Proposes to Assign the “Soulbound” Feature to NFTs
It’s absolutely clear that non-fungible tokens (NFTs) are destined to become an integral part of the emerging metaverse. However, the question regarding the properties of these tokens remains up for discussion because, in their current state, these tokens could be subject to abuse by the whales. This issue is being constantly addressed by the biggest influencers in the industry, including the Ethereum co-founder Vitalik Buterin.
Table of contents:
- Vitalik suggests making NFTs into something similar to WoW artifacts.
- The soulbound governance rights.
Vitalik suggests making NFTs into something similar to WoW artifacts
There is absolutely no doubt that NFTs have already become an indispensable part of the blockchain space and its future, which lies in the creation of the metaverse. As the name suggests, their core value is non-fungibility or uniqueness; but their other properties, like the possibility of unrestricted transfer between sellers and buyers, leave room for debate that was recently joined by one of the biggest influencers in the industry, Vitalik Buterin.
The latest post on Vitalik Buterin’s Website, which is the actual name of his personal website - someone obviously didn’t want to ponder too much on some clever name - contains the proposition to introduce the soulbound feature that should be familiar to all World of Warcraft players. In essence, “soulbound” is the characteristic of a powerful virtual item obtainable through difficult quests or the killing of powerful creatures. It means that the item is assigned to a player forever and can’t be sold on the in-game market or exchanged between players, thus becoming “bound” to a concrete gamer. This creates a certain degree of fairness by disallowing players to move up the ranks without the necessary “grinding.” Buterin argues that a similar mechanic could be applied to non-fungible tokens if the community wants to create tokens that signal about something else other than the owner's ability to accumulate value. As an example, he used the Proof of Attendance Protocol (POAP), which is the standard used in NFTs that prove the owner's participation in a certain event. This principle could also be extended to on-chain store and certification of IDs, diplomas, and other digital items that contain personal data. Vitalik writes that non-transferable NFTs represent an “underexplored design space” that can enrich this industry and facilitate its development.
The soulbound governance rights
But perhaps an even bigger issue that Buterin touched upon in the blog post relates to the governance mechanisms and how they could be corrupted if that power remains easily transferable. He reckons that transferability has nothing to do with the desired wide distribution of governance power since if left unrestricted, it may result in a dangerous concentration of such power in the hands of those who possess the most monetary resources. Vitalik has also briefly touched upon the relation between privacy and non-transferability that can be achieved through the combination of smart contracts and the Zk-SNARK cryptographic proof. All this should help shift the image of NFTs from being a plaything of those who have a lot of money to waste to being a part of a sustainable metaverse.