Soulbound Token (SBT)
A non-transferable token representing credentials or identity — reputation you can't buy or sell.
A soulbound token is an NFT-like token that is permanently non-transferable — bound to one wallet (“soul”). Proposed by Ethereum’s Vitalik Buterin, the concept targets use cases where transferability would defeat the purpose: credentials, diplomas, proof of attendance, reputation, and identity attestations that should represent you and can’t be bought.
SBTs point toward a “decentralized identity” layer — verifiable, portable credentials without a central authority, enabling things like undercollateralized lending based on on-chain reputation. The open challenges are real: privacy (permanent public credentials tied to a wallet can be invasive), recovery (what if you lose the wallet?), and adoption. It’s a promising but still-experimental idea for bringing non-financial identity and reputation on-chain — distinct from the speculative NFT use cases that dominated the hype cycle.