1. SBT is a relationship proof rather than an authority proof. Its value lies in the massive accumulation of data. Complexity, richness and diversity will be the core competitiveness of SBT data sources.
2. The accumulation of data will give each account a “soul”. By preprocessing and classifying information, labeling and characterizing accounts, it can greatly enrich the application scenarios of on-chain identity and even predict its behavior.
3. Privacy is a luxury, and editable privacy is a hugely in-demand but challenging track.
4. The formation of a decentralized society requires strong binding between natural persons and on-chain identities, which increases the replacement cost of identities and generates identity dependence.
5. SBT can be applied in decentralized financial scenarios such as lending by building on-chain credit points and graded KYC.
Table of contents:
1. Decentralized society and soul-bound tokens
2. SBT and related tracks under the OSI model
a. Information Collection and Processing
b. Transmission and Storage
3. The future direction of SBT
Figure 1 SBT-related track comparison table
Decentralized society and soul-bound tokens
Vitalik mentioned POAP and future possibilities again at ETHCC 2022, saying “POAP will be a way to distinguish real users from bot in web 3.0”. This is not the first time Vitalik has mentioned the POAP project. This earliest badge certification project has received Vitalik’s attention since its launch. As of 2022/8/1, there are 916,332 wallets holding relevant badges, many Large-scale events will choose to join the concept of participate to mint. “Distinguishing between real people and machines” means that Web3’s identity and data are no longer limited to the illusory world on the Internet, but break the boundary between virtual and reality, and are endowed with “personality” and begin to be compared with reality. In the Web2 Internet world established over the past few decades, characters are virtual, images are fictional, the soul is separated from characters and images, and reality and virtuality are completely separated. In the construction of Web3, the characters are real, the images are multi-faceted, and the soul is bound to the real characters. Reality can be virtual, and virtual can also be real.
Figure 2 Number of wallets and mint with POAP
The interpretation of the concept of “soul binding” in Web3 comes from Vitalik’s description in the article “Decentralized Society: Finding Web3’s Soul”, and the name comes from World of Warcraft. The article describes a Web3 society in detail. Compared to its description, our current market is like a train, not so Web3, at best Web2.5, from the supervision of Tornado Cash to the DAO voting to liquidate whales. We strayed from the original goal of the blockchain. This train is loaded with the concepts of DeFi, GameFi, NFT and the return of various ownerships. The high degree of financialization and the strong wealth-making effect attract countless train-chasing people. Over time, we may experience endless hacking attacks, witch attacks and Under the temptation of money, he gradually lost his faith in the industry and became blindly seeking profit. Especially in a crypto world with strong asset mobility and lack of punishment, chasing more interests may become the only pursuit of Web3 residents. Pure financialization will be detrimental to the sustainable development of the entire industry. What is even worse is that new technologies will cause wealth to be reshuffled again, that is, after the Industrial Revolution, there will be a centralized system wrapped in decentralized sugar.
Vitalik chose to lay a new track for this car, adding the solution of Soul Bond Token (SBT), thus guiding the whole Web3 trend, from Web2.5 to a real Decentralzied Society, DeSoc, Decentralization society. A truly decentralized society, DeSoc, is highly socially composable. The social construction model is no longer a top-down model uniformly deployed by the centralized government, but chooses to return the ownership, with individuals as the The center spreads out to form a bottom-up, people-oriented social system. In this social system, wealth is no longer concentrated, individual ownership is recognized and respected, and identity authentication is no longer a birth certificate in black and white, but a network of events and related parties.
Figure 3 Top-down and bottom-up social systems
Vitalik believes that to achieve such a society, a token that is publicly visible and cannot be transferred and bound to the wallet – the soul-bound token SBT is an indispensable part, which will give each account “humanity” , thereby Makes a decentralized identity increasingly full. SBT is similar to the POAP badge concept mentioned earlier, but adds the non-transferable feature to it. It is a relational proof rather than an authority proof. Let’s use an example to illustrate what a “relationship proof” is: Alice participated in Bob’s birthday party and got an SBT. This SBT can only be used as a proof of Alice’s participation, but it cannot prove that Alice is Bob’s friend. Their relationship can be positive or negative, close or distant. As Alice continues to participate in the activities of Bob’s appearance, a large amount of data can be accumulated to determine whether they are friends or even lovers. Now, we replace Alice with an account, and Bob with DeFi and GameFi, and we can figure out whether the identity behind an account is a game expert or a senior leek.
In the real world, a large number of behaviors constitute word-of-mouth, and word-of-mouth will generate original trust. Such trust is what SBT wants to quantify and realize through technical means. The non-transferable feature gives SBT a certain credibility, and with the passage of time and the accumulation of a large number of SBT, it can gradually develop into the credibility of the account, thus giving the account certain characteristics. This feature is accumulated through non-transferable behavioral tokens in Web3. The solution proposed by SBT is that for every online or offline activity, SBT will be issued as proof of participation. In the long run, combined with transactions and interactive behaviors on the chain, each account can be bound to a growing person. It’s not just a wallet anymore. Perhaps, a single event and proof are easy to be forged, but with the accumulation of time, the more complex the characteristics are, the more difficult it is to be copied, and a large number of credible characteristics are enough to constitute a “person” with high authenticity. In the current Web3 society, there are no two most important concepts in the social system of “relationship” and “trust”. The emergence of SBT is enough to fill the vacancy in this part and give the entire crypto industry more possibilities.
SBT and related track analysis under the OSI model
The OSI model is the most common protocol model in the Internet, and it is also the basic step to support the intercommunication of various parts of the huge Internet. The OSI model corresponds to seven layers respectively: application layer, presentation layer, session layer, transport layer, network layer, data link layer and physical layer. These corresponding layers can quickly and accurately transfer our information to any computer. If the users on the application side are regarded as one end, and the recipients on the other end are regarded as virtual identities in the DeSoc society, in order to build a decentralized identity with complex characteristics, referring to the framework of the OSI model, we try to move from the underlying facilities to the application layer. Divide the existing crypto industry:
Figure 4 Industry classification under the OSI model
How many steps does it take to put an elephant in the refrigerator? Just three steps. The first step is to open the refrigerator, the second step is to put the elephant, and the third step is to close the refrigerator. From a user’s point of view, it only takes three steps to apply SBT, which is quite simple. The first step is to use SBT related applications, the second step is to mint the SBT token, and the third step is to store it in your own wallet. These three simplest user behaviors contain the three most important steps of SBT: 1. Information collection and processing 2. Transmission and storage 3. Binding. The above seven levels of OSI are mapped one-to-one to the three steps for users to use SBT, and the following picture will be obtained by observing the existing industry ecology again:
Figure 5 Industry classification and problems under the OSI model
Next, this article will cover specific solutions from various levels, taking existing SBT-related projects as an example, to analyze the entire encryption industry ecology, and to propose some common problems in the industry to discuss future exploration directions.
Information collection and processing
The collection and processing of information covers two levels: the application layer collects and sends the information, and the presentation layer compiles the information into a suitable form for transmission. These two levels are the focus of SBT-related project development. The greatest value of SBT lies in the accumulation of a large amount of data, especially the data that could not be quantified before. These data will greatly improve the behavior pattern analysis of an account. Early SBT projects are bound to encounter strong obstacles, especially before data accumulation cannot be scaled. A large amount of data will only be developed, used and paid for if it can generate commercial value. Let’s take a closer look at the current market conditions
Figure 6 Information collection and processing
A. Application layer
At present, the development of the application side mainly focuses on two parts: participation proof and segmentation projects based on specific use cases. Items in this category aim to document relationships: some focus on personal behavior records, others on individuals and events. A lot of development is currently concentrated in this branch. The first category of common projects is to issue SBT to users based on the existing behavior and transactions of the wallet.
The earliest badge project, although not SBT, but as the first related project, can support the project party to hold activities and use the POAP platform to sell its own NFT, which can be transferred.
A platform that provides various tasks for DeFi, DAO, and GameFi platforms. Users can participate in the community and reward SBT by completing tasks.
Based on wallet address analysis and set up corresponding SBT receiving nodes. After achieving a certain achievement, such as using a certain DApp for a certain number of times, you can receive an SBT on the platform.
It aims to build a data voucher network, issue on-chain vouchers to users’ on-chain and off-chain behaviors, and help developers use data vouchers to calculate user credit points, find target audiences, and reward community contributors.
The second category is the targeted development of projects based on specific usage scenarios, such as DeQuest and CarvIO. At present, most of these scenarios focus on GameFi or DeFi, which is a subdivision track with a large user base.
Obtain SBT by learning about Crypto and games, and game data can also prove your game level, and finally relevant data can become the basis for participating in the whitelist.
Reputation is formed based on wallet data. Now it supports viewing the status of various chain games, and then after completing certain tasks, badges in the form of SBT will be issued. For the game guild, scholars can be selected for training based on the user data of the platform.
As can be seen from the above projects, the current data collection form on the application side is very simple. The starting point of many projects is to try to analyze the existing user behavior, and lack of multi-dimensional data in some different scenarios, such as offline meetings, or using platforms duration and other data. We believe that complexity, richness and diversity will be the core competencies of SBT data sources.
In addition, data voucher projects such as POAP and Galaxy, although born before the release of the SBT concept, their data vouchers are mostly tradable NFTs, but their product form and final vision are similar to SBT, which does not rule out the possibility of later switching to issuing SBT. Further enhance the network effect of users.
B. Presentation layer
The presentation layer focuses on the development of contracts and protocols. These protocols try to establish general rules for SBT, which can be applied to various DApp development.
Proposed the agreement of Paired Soulbound Token, which can make the marriage scene appear in Web3, two accounts can be bound and can be divorced by multi-signature.
In addition to the development of SBT contracts based on specific projects, there are also a large number of other contract projects on the market. EIP-4973 Account-bound Tokens, EIP-6114 Soulbound Nadges, ERC721S Soulbond. These are all contract types based on ERC-721, and as shown on the application side, they are basically contract types of the identification class. Identity contracts can be used to issue certificates of participation or graduation certificates, but for some that need to be accumulated by quantity and time, such as reputation, they are not supported. This is also the current problem of SBT development in the application layer and presentation layer:
(1) For some protocols that require time dimension, contribution dimension or pure quantity accumulation, almost no one has developed them. In fact, these data, which are quantitatively and qualitatively changed by accumulation and time, are the key to SBT.
(2) A large number of protocol development uses completely different contract formats, resulting in cluttered SBT data, and the collected data cannot be merged and accumulated, which eventually leads to the scattered data on the application side. It is a good way to record and analyze the behavior of an account.
(3) The existing scheme does not process and subdivide the data of SBT in detail. SBT is a highly personalized application mode, and a large amount of data will lead to a mixture of useful data and useless data. Just like red beans mixed with mung beans, it is difficult to screen by bulk packaging. Due to the high degree of liberalization of information collection, most of the information formats are not only irregular, but also require manual sorting and filtering. Detailed screening of profitable data is also an essential part of SBT.
For these existing problems, we believe that SBT-related projects can make the following improvements in information collection and processing:
1. Enrich the product structure of the application side
At present, the products on the application side basically focus on marking others with certificates, and the data collected by a single model is often single. Application-side products should support the collection of different categories and dimensions of information and collect relevant data in a targeted manner according to specific application scenarios. At present, new rules are formulated for the voting, airdrop, whitelisting and other behaviors of the DAO community. This part of the development market has responded very quickly. Looking forward to the emergence of new governance methods and participation statistics in the increasingly depressed DAO track, SBT can completely change the model of the DAO community and truly reward deep participants.
DAOU uses Soulbound Token and Social Oracle to convert members’ activity data in the DAO (Discord activity and participation, forum Q&A, Github code contributions, DAO roles and connections) into on-chain verifiable data.
2. Enrich usage scenarios through account labeling and personalization
Since SBT can build identity credit on the chain, it is better to anthropomorphize accounts, assign personality characteristics to each account through data accumulation and analysis, and then predict reactions in specific environments based on personality characteristics. For example, Bob’s label is Game Master, then in some games with high difficulty coefficient, it can be predicted through machine learning that Bob will also buy and become a high-player of this game. If a similar application is combined with lending, it is possible to predict the amount within which a particular account will definitely repay the debt. The gameplay of this part needs to be explored, but labeling and personalizing behavior can promote users to establish emotional links to accounts. Data analysis platforms such as Nansen already have tags for addresses such as Smart Money, which can help build on-chain identities. Labels can also be linked to each other to accurately predict account behavior. For example, Bob is the Game Master and also the Option Lover. From the simple account label, it can be analyzed through the behavior pattern, which price range Bob’s behavior is the stop loss point of the risk taker and the corresponding game NFT. The behavior of a single account can be classified and analyzed and predicted according to the tags. The personalization and labeling of accounts not only attracts users, but also simplifies the development of the application. Not only that, because of the highly personalized nature of SBT, it can customize precise push, precise marketing and personal product design for individuals.
3. Incorporate time into the direction of protocol layer development, and create a more unified protocol and developer tools
The current protocol development does not cover the variable time. At the same time, the current protocol development is in a different state, and there is no unified protocol. The next direction of exploration should be to create a protocol with strong universality and ease of use. At the same time, based on the protocol, more mature developer tools are also required. If there is no more unified agreement in the short term, then the agreement developed based on ERC-721 can think about the corresponding data conversion and comparison. For example, there is a relatively uniform conversion standard between TOEFL and IELTS. Even if the pursuit of sophistication is lacking, user portrait analysis can be carried out within a general scope.
4. Preprocessing and grading the information
The large amount of information and the irregular data format make the recording processing of the entire SBT extremely difficult. The reason why financial data is the easiest to develop is because the format is fixed. However, the data format of SBT is highly uncertain. There is no way to determine whether the data is useful or not in a large amount of data. A relatively unified filtering rule can be formulated at the application layer to roughly divide the data according to priority. Data with higher priority, such as transfers or data with a higher level of confidentiality, are classified into one category. Make less important data such as attending an unimportant meeting a second priority. Divide some data that is unclear and useful or not as pending. Data processing and transmission are carried out in a targeted manner according to the priority of the data. Rough classification and classification of front-end applications can greatly reduce the difficulty of data processing, and also allow developers to focus on security and privacy maintenance.
transmission and storage
In the collection and processing of information, the functions of the application layer and the presentation layer have already completed the integration of diverse data. Safe and efficient transmission is very important. The purpose of the session layer is to establish a secure channel to transmit data, and the purpose of the transport layer is to split a large amount of data for flow control.
These two floors are the underlying facilities related to SBT. These are also highly concerned tracks in the industry. These tracks are not only closely related to SBT, but also the cornerstone of the entire Crypto industry.
Figure 7 Transmission and storage
C. Session layer
The key word for the session layer is security. This security includes not only the security of wallets, but also the security of privacy and the pursuit of decentralization. SBT can provide creative solutions for security.
Burn My Wallet
A wallet security marking software, minting SBT to alert other users and wallet addresses where the protocol has been hacked. These SBTs cannot be deleted and bound to the account. After that, as long as they access the project API, they will receive a risk alert. Compared with the existing centralized products that mark risky addresses, SBT’s on-chain marking can help more people understand the security risks of wallets.
Such creative and new gameplay ideas will be a unique surprise that SBT brings to the market. The current security projects on the market are telling stories of wallet theft and locking or preventing wallet theft. There is a complete void in terms of recovery of wallet property and contingency measures to detect theft. On-chain tokenization is a new gameplay brought by SBT. The exploration of this part may bring us more complete security application software.
The technical characteristics of SBT make it difficult to achieve decentralization. Because SBT’s information data is completely open source, even if the wallet is anonymous, as the on-chain and off-chain identities become more and more bound, users’ pursuit of security, decentralization and privacy will become stronger and stronger. .
From the user’s point of view, a series of pursuits such as privacy, security, and speed vary from person to person. These rights should not be free, but should be classified as services. Since everyone pursues different levels of privacy, openness, security and decentralization, these luxury goods should be clearly priced and classified. The degree of decentralization, openness, and speed of each transmitted data stems from the price paid. Express has special signs, fast signs, services should be able to. The pursuit of privacy should not be just about encrypted transfers and identity hiding. At present, whether it is a private public chain, a private transfer, or a highly decentralized, centralized public chain, there is no separate design for privacy. Editable privacy will be a new pursuit.
Privacy has three levels of classification: access, editing, and cashflow, that is, whether data can be accessed, edited, and used for profit. The three rights should be treated separately. The current privacy classification is simple and rude, either choose to hide completely, or choose to mix open source, but the rude way cannot efficiently use the data generated by SBT. If privacy is carefully classified and modularized based on different levels of development and maintenance, privacy projects will attract a lot of market attention. At present, the market’s perception of privacy is still at the level of protection, but no one has focused on the profit of selling privacy and the fees for access. In the future, everyone’s privacy and openness will be determined by themselves, set their own prices, and maintained at their own expense. Consumer privacy will become the mainstream in the future. Only by giving privacy to a certain degree of profitability can we stimulate the public who do not pay attention to privacy to take up arms and defend privacy.
D. Transport layer
The existing solution at the transport layer is how to process data in large quantities. The behavior of processing a large amount of data can be understood as whether a large amount of data can be uploaded to the chain, whether it supports data storage, and whether it can identify the data on the chain and the data that needs to be stored. The solution of this layer, put into the entire cryptocurrency industry, is the problem of expansion and decentralized storage that everyone is discussing. The problem corresponding to SBT is relatively simple but obvious: how to identify a large amount of redundant data and how to choose storage. Way. These questions have no standard and are completely personal. Even though the data preprocessing is mentioned above, in fact, the collected data of the fully rolled out application layer cannot be processed at the same time.
Storage is the biggest challenge facing the SBT track. How can so much data be stored so that it can be arbitrarily retrieved and not lost under the condition of ensuring authenticity? Decentralized storage requires a lot of manpower and material resources to maintain, and the efficiency is very slow, but centralized storage is not trusted by the market. Based on this situation, Farcaster adopts a semi-centralized storage solution-hybrid storage, which may be a compromise solution for the current situation. Since the information classification is mentioned above, can the highest-level information be stored on the chain, but the remaining unimportant data can be stored off-chain for individuals, or can be entrusted to a unified storage service, similar to AWS. Perhaps the combination of the two, the priority and the degree of decentralization are benchmarked against each other, and choosing the optimal solution in this is an effective way out.
The problem of transmission and storage is not only a problem faced by SBT, but also a common problem in the crypto industry. We believe that the following development directions can bring new thinking to Infrastructure while accelerating the development of SBT.
1. Benefit customization and tiered charges
People with high demands for privacy, decentralization and security can choose to pay high maintenance fees. For those who pursue less privacy and decentralization, they choose a more crude solution. The benefits are graded and charged, and the revenue generated by this part can be used to reward the maintainers, so as to ensure the corresponding enthusiasm.
2. Editable Privacy
Even for privacy, a single pursuit cannot satisfy an increasingly sophisticated user population. In the future, customization will be the most common feature. With the process of globalization, community grouping, and the popularity of personalization will greatly affect our behavior patterns. Privacy will be the bellwether of the next era. Editable privacy will be yet another fusion of equity and technology.
3. Hybrid Storage
Inefficient and expensive decentralized storage will face great challenges, and mature centralized models cannot be replaced in the short term. The confrontation of the two models will produce two situations: either decentralized storage can efficiently store and transmit data in large quantities, or the entire industry chooses to compromise and choose hybrid storage until a technological singularity occurs.
Binding is a point that is repeatedly questioned in all concepts of SBT. Most people think that even though SBT can record all behaviors and allow us to have a second identity on the chain as an individual, if the wallet account can be changed at will, it means that “binding” is useless. We believe that the formation of a decentralized society requires strong binding between natural persons and on-chain identities, resulting in “identity dependence”.
Compared with reducing the cost of identity switching, increasing the cost is beneficial to the construction of Web3. If the cost of replacement is greater than the benefit after replacement, most people will choose to keep the current state to achieve binding. In addition, human nature is lazy, and long-term behavioral habits will once again increase the cost of replacement. Correspondingly, the “cost” that can affect the user has two parts: 1. Time 2. Money. The increased cost of replacement may constrain humanity in the absence of punishment. SBT has its own time cost, which can force users to invest a lot of time in an account under the accumulation of a large number of long-term behaviors, and users will be rewarded for long-term efforts. On the contrary, the cost of money will be greatly weakened by the easy transferability of crypto assets, which is a problem that needs to be solved.
It should also be noted that increasing the replacement cost of “identity” is beneficial to “binding”, but it is by no means increasing the replacement cost of account addresses, which will bring more serious problems. In the “binding” step, we will discuss the solutions in detail through the three layers of the network layer, the data link layer and the physical layer.
Figure 8 Binding
E. Network layer and data link layer
The most important role of the network layer and the data link layer in the Internet is to confirm the transmission address and the receiving address. The representative in Web2 is the IP address. In Web3, the wallet public key and private key system can best reflect the binding and receiving addresses. . The current market solutions focus on improving the ease of use of user portals. Irregular hash functions such as public keys and private keys greatly reduce the ease of use of wallets, just like complex mailboxes and bank accounts will provide nickname functions. Domain name projects led by ENS try to increase the ease of use of wallets and reduce the difficulty of use. The increased ease of use will make it easier to bind and identify wallets.
But users can’t do anything about forgetting, theft, and other security risks that lead to wallet replacement and discarding. Loss and theft of private keys can lead to “identities” that are no longer trusted, so how to recover the wallet is particularly important. SBT can achieve real wallet retrieval. If the authenticity of the relevant holder can be confirmed through SBT, then it can also be determined through the contribution of an account in the community and the connection with community members to determine whether the person really exists. Vitalik wrote in the Desoc article that if users lose their private keys, they can regain ownership of their wallets through community retrieval. The easiest example to understand is WeChat account recovery, where relatives and friends can help users recover their accounts by sending specific messages to WeChat. SBT will give the same relationship and authenticity to the encrypted world, and this exploration direction can add new possibilities to existing wallet security.
A large number of wallet or user portal related projects focus on how to popularize wallets and increase the ease of use of wallets. For example, Metamask gradually added NFT display from the token display at the beginning, and embedded its own swap system.
It can help users generate and manage their own private keys, and can also authorize the account to others for joint management.
Wallet security and ease of use are a double-edged sword. The threshold for wallet use cannot prevent users from discarding their “identities” at will, and most users actively hold multiple wallets and change them at will. The most fundamental concept of binding is whether a natural person can be bound to the on-chain identity represented by the wallet. In other words, there is a real person behind the on-chain actions and that person is not profiting from mass-generating wallets. The two most common categories of projects are social graphs and DIDs. Social graph protocols headed by Lens Protocol and Cyberconnect try to integrate all behaviors on the chain, and data can be shared within the same system, so as to achieve the unity of identity on the chain. Now many new social graph projects are trying to combine SBT and social graph.
Flamingle Labs is a Web3 social product built on offline activities. Users can naturally engage in Web3 social networking to build a distributed social account graph. The project hopes to solve the problem of too few effective users of Web3 social networking, full of fake accounts, and too flat user DID by transforming offline activities.
The track that goes hand-in-hand with the social graph is DID. DID can be said to be the most successful track bundled with SBT. DID projects either focus on discovering account attributes through the analysis of a single address, or link off-chain data with on-chain data.
Def Network is a collaborative tool for creating user tags for wallet addresses. After downloading the plugin, Def Network can. Integrate and analyze the on-chain data of addresses, and generate tags. Developers and users can index specific tags and query addresses on the Def Network.
Web3 identity information plug-in, the user can mint a non-tradable NFT by connecting the wallet, linking the bank, and obtaining the KYC authentication to complete the identity authentication. The project adopts Zk-proof technology to ensure user privacy.
Based on a set of behavior analysis logic, KNN3 filters and categorizes the behaviors on the chain. Taking the address as the unit, it can add attributes to the address through behavior analysis, or define the relationship between two addresses, so as to understand the relationship between accounts and develop social media. Atlas.
Whether it is social graph or DID, if it can be combined with related technologies of SBT, it can get twice the result with half the effort. The existing methods of binding off-chain identities and on-chain identities are too crude, and most of them choose methods with low security, such as uploading documents and binding bank cards for KYC. In fact, not all identity verification requires off-chain KYC to complete, and SBT combined with on-chain behavior data can replace part of the use of KYC. We believe that KYC can be used hierarchically, and some low-security behaviors, such as airdrops, can completely screen out deep participants through SBT verification. Some behaviors that require high security, such as lending, require identity verification and auxiliary verification of SBT data. The essence of lending is a trust mechanism, how the borrower can ensure that the lender can repay the money through the trust mechanism. In traditional society, the act of borrowing money is highly bound to social relations. A person’s reputation, social status, and economic strength are the most influential factors in a person’s ability to borrow money. The feature of SBT is to bring the relationship network into the chain. This relationship network has a cost. When the cost of giving up a wallet is greater than the amount of a small loan, this loan scenario without knowing the true identity of the other party is established. SBT can build credit points on the chain, and then determine the amount of unsecured loans for different grades of small loans. The longer the time, the more deeply involved in the community, and the more complex the relationship network accounts, the more unsecured or low mortgage rates can be. of borrowed money. Exploration in this direction can be dreamily linked with NFT, DeFi and other tracks.
F. Physical layer
A special level of the physical layer, in Web3, apart from mining machines in various senses, it is difficult for us to find objects corresponding to “optical fibers and cables”, but if we look closely, we will find that Web3 In Real Life is not known to us. The corner spreads quietly.
Taking the NFT picture frame as the starting point, we create a DID-specific NFT mobile display device, combine the NFT-corresponding DID identity with the exclusive mobile hardware, and explore the interaction scene between digital identity and the real world.
From Artblock and other NFT products after a series of NFT products became popular, to the Android smartphone of Solana Mobile Stack–Saga, they are all sending us a new message: Web3 fiber has sprouted, and products that meet various application scenarios has started to appear. As put forward at the Hannover Messe in 2013, Industry 1.0 is the age of steam engines, Industry 2.0 is the age of electrification, Industry 3.0 is the age of information, and Industry 4.0 is the age of intelligence. A new industrial revolution is taking place in which intelligence is given to machines and the invisible and intangible algorithms, computing power, and information flow are loaded into entities, and the barrier between reality and virtuality is at stake.
In the future, we may see some products that use Web3 identity as application scenarios. These products fully serve on-chain identity and will be deeply bound to the real world. In addition to cell phones, there may be brand new, unexpected objects bound to people: chips, wristbands, even crystal implants. These unimaginable products increase the cost of replacement, thereby ensuring that the “soul” of the identity is deeply bound to it and is difficult to replace.
In summary, in the “binding” step, the network layer, the data link layer and the physical layer that are more closely connected to the physical world are involved. When we extend SBT to the identity level, wallets, social graphs, and physical devices are some of the directions to explore. We believe that SBT can be further deeply bound to people only by increasing the replacement cost. Based on this assumption, we summarize some industry problems that can be improved by SBT:
1. Wallet recovery
The high cost of replacement makes people more closely bound to their “identity”, followed by wallet security issues. Through the social relationship established by SBT, the wallet can be retrieved or replaced in the case of multi-person cross-validation.
2. Alternative off-chain KYC for credit lending
SBT, which combines the relationship on the chain, allows each “identity” to have a cost. When the loan amount is less than the cost, a loan model that does not need to verify the true identity of the other party is established. SBT can combine on-chain credit points to provide micro-loans in different gears, supplementing the vacancies in scenarios that require KYC identity information to be on-chain for lending.
3. Physical equipment and virtual reality coexist
In the future, we will see some physical devices bound with Web3 identity as application scenarios, fully serving the identity on the chain, so that the “soul” of the identity is deeply bound to the individual.
The future direction of SBT
Compared with the bottom-up Web3 stack theory, we refer to the OSI model, disassemble the user’s behavior from the user’s point of view, divide the behavior of “soul binding” into three steps, and then discuss the aspects involved in each step. industry issues and directions for exploration. Since Vitalik proposed the concept of SBT, Buidlers in the industry have explored in various directions. We used the topic of SBT to think about some existing problems in the decentralized society and Web3, and also make suggestions on the future development direction of the industry. made predictions:
1. Protocol is king
The first batch of SBT-related projects in the market will focus on establishing rules and unifying agreements. The blossoming of the application layer will appear after the emergence of more unified protocol rules related to SBT.
2. Everything is on the chain
There will be more and more offline behaviors and on-chain interactions to issue proofs of participation in the form of SBT. These proofs do not need to be real or meaningful at the beginning, just enough. When the amount of data reaches a certain level, an effective screening and classification mechanism can help the on-chain identity to be established effectively
3. On-chain credit and DeFi composability
Even though Vitalik’s original intention of proposing SBT-related concepts is to solve the current high degree of financialization of the Crypto industry, the financial application brought about by the generation of credit is indeed an area that is more easily accepted by the market. DeFi is still limited by over-collateralized lending, and if credit lending can be fully introduced, new vitality may erupt.
4. Re-empowering privacy editing
Privacy is always the most expensive luxury in the pockets of the rich. Even if projects used for expansion in zk-related technologies can often gain higher market attention and valuations, privacy will become an unavoidable problem in the days of digitization. open topic. Research on editable privacy related to SBT will empower existing privacy products, and privacy layering will make identity data the hard currency of Web3.
Figure 9 Application, Data, and Soul Binding
In addition, the way of thinking based on user behavior is not only suitable for SBT, but all heavy applications and user-related tracks can be substituted into this model. The transmission and storage layer is like a huge water purifier. All the data collected by the application side enters this huge water purifier after the protocol is formatted. Some contents are stored on the chain, and some are passed through After the water purifier is carefully filtered and processed, these data are distributed to different pools under the different needs of all parties. There is everyone’s extremely personal data and information in the small pool. These information and data can be used by the developers of the application side again for different purposes through the filtering layer in the middle. Closed loop, endless life. In the end, we will find that the common problems that the entire industry cannot do without are expansion, storage, security, privacy and decentralization. A major breakthrough in any underlying direction is enough to support the vigorous development of the application layer. The direction pursued day and night.
 Decentralized Society: Finding Web3’s Soul
 Farcaster White Paper https://www.farcaster.xyz/docs/intro
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/arkstream-capital-a-comprehensive-analysis-of-the-current-status-and-future-direction-of-soul-bound-tokens/
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