Status of Soulbound Tokens : Current Players and Urgent Issues

Earlier this year, Vitalik ushered in a new era of NFTs with his article ” Soul-bound Tokens “. This has prompted many projects to experiment a lot with their “new” NFT use cases for soul-bound tokens (soul-bound tokens). While some projects have gained a certain amount of attention, most are still out of the public eye. Irons, before we dive into the current state of Soulbound Tokens, let’s take a quick look at what a Soulbound Token is and what promises it brings.

In simple terms, Soulbound Tokens are non-transferable NFTs that can represent many things. The fact that Soulbound tokens are non-transferable allows them to be trusted reputation data points, including job certificates, skill certificates, and more.

This ability to establish identity through an ecosystem of soul-bound tokens unlocks a range of new possibilities for Web3. For example, soul-bound tokens can pave the way for governance beyond token voting, participate in unsecured lending in DeFi, and it is also a way to prevent Sybil attacks.

Noteworthy players in the soul-bound token space

Note: While some of these Soulbound Tokens are not exactly “non-transferable”, they exhibit other qualities of Soulbound Tokens by being a reputation data point.

POAP

While the term “soul bound” wasn’t coined until earlier this year, POAP has been basically a version of the soul bound token since its inception in 2019. Of all the speculative NFTs focused on rarity and price, POAP takes a very different approach, representing your proof of attendance to a physical or virtual event.

The idea garnered enormous attention as soon as it was proposed. On Gnosis Chain (aka xDAI), over 5 million POAPs have been minted since October 2020. Even in the bear market of the past few months, there is still steady POAP demand being minted.

Source: Dune Analytics - @salva

Source: Dune Analytics – @salva

While POAP alone doesn’t tell the story, the project lays a solid foundation for other soul-bound tokens in the future.

Project Galaxy

Project Galaxy is by far one of the largest players in the Soulbound Token space, with nearly 1 million “OATs” (equivalent to Galaxy’s Soulbound Tokens) minted in the project. They succeed by using “OAT” as a way to build community, aka growth hacking.

Source: Dune Analytics - @echolon166

Source: Dune Analytics – @echolon166

These users earn OAT from “participating in AMAs” and “following specific accounts on Twitter” to more high-profile activities such as the recent “Arbitrum Odyssey” (users are incentivized to transfer assets to Arbitrum to complete related tasks) ). Projects, DAOs, and companies all found this tool useful, so they partnered with Project Galaxy to issue “OAT.”

RabbitHole

Among the players in the soul-bound token space, RabbitHole has positioned itself as a leader in the “Proof of Skills” category. They are a platform to educate users by guiding users through a series of on-chain actions in a specific area of ​​Web3. An example is their “Introduction to DeFi” guide, which includes on-chain actions like de-staking ETH on Lido, stETH as collateral on Aave, and liquidity on Uniswap. After completing these on-chain actions, users will be eligible to mint a “RabbitHole Credential” representing your skill set in that specific area.

So far, since launch in May 2022, 35,035 credentials have been minted, with 17,058 unique addresses.

Source: Dune Analytics - @gm365

Source: Dune Analytics – @gm365

Noox World

Of all the current players in the field, Noox World has probably taken the most direct approach in issuing soul-bound tokens. Each soul-bound token of Noox is earned through specific on-chain actions. For example, 10+ swaps on Uniswap will allow you to mint the “Uniswap Uncommon Swapper” badge.

About 20,000 badges have been minted from 4,250 unique addresses starting in May 2022. It’s worth noting that while all of the previously mentioned Soulbound tokens are free to mint, Noox charges a minting fee of 0.002 ETH per badge. This allowed the team to accumulate around 40 ETH in total.

Status of Soulbound Tokens : Current Players and Urgent Issues

Interestingly, most of the daily applications for the Noox badge occurred in May. This is most likely due to the overall hype around soul-bound tokens that Vitalik’s article created. Since then, demand for minted Noox badges has slowed across the market.

DeQuest

DeQuest takes a more niche approach to the soul-bound token space, with the project primarily focused on gaming. Similar to RabbitHole, DeQuest features “quests” that guide users through learning and exploring various games. In their “mission” category, nearly 5,000 badges have been minted.

The value proposition for users and games is fairly clear. By completing these “tasks”, users can earn soul-bound tokens, and sometimes they can also earn monetary rewards. For games, this can be used as a mechanism to guide their user base through DeQuest’s community.

insight

At this stage, we can clearly see that the field of soul-bound tokens is still in a very early stage, and various projects are trying different approaches. While some projects have gained some traction, most projects face a similar problem – a lack of demand.

In my opinion, POAP is the only project that finds product-market fit. While Project Galaxy has done a decent job attracting users and projects, it’s mostly due to their business expansion efforts rather than the real organic demand of the market. RabbitHole, Noox World, and DeQuest all saw some decline in demand after their initial launch.

This leads to the question, if soul-bound tokens are considered the next big thing, why haven’t they taken off yet?

Quite simply, this is because the current soul-bound token is not the future soul-bound token .

If you’ve already realized, the current Soulbound Tokens are primarily used as a participation tool:

  • Soul-bound Tokens for “Participate in AMA”
  • Soul-bound token for “Bridge to X”
  • Soul-bound token for “X swaps on Uniswap”

These soul-bound tokens don’t tell you much about a user at the end of the day. They have relatively little insight and are often meaningless. This means that individuals, DAOs, and companies looking to find insights about the users who hold these soul-bound tokens often find little. Therefore it does not provide any value to the holder of the Soulbound Token.

It is this that puts the field of soul-bound tokens in a bind. In order for users to seriously collect Soulbound Tokens, they need to derive value from them. But in order for individuals, DAOs and corporations to start providing value to Soulbound Tokens, there needs to be an existing meaningful Soulbound Token ecosystem and users to collect it.

This is a classic “chicken and egg” problem. Until this issue is resolved, I don’t think it’s possible for soul-bound tokens to take the next step.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/status-of-soulbound-tokens-current-players-and-urgent-issues/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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