From social to healthcare: several interesting application scenarios of SBT
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From social to healthcare: several interesting application scenarios of SBT
Digital identity is as simple as a digital wallet, it's just not suitable for everyone yet.
Navigating Web3 tides with focused insights
Author: James QU@Tokyo
Can you tell the difference between twins?
I think I can, even if they are identical twins—those with the same DNA.
Why?
Because from the very beginning of life, they absorb energy separately, act independently in different ways, receive feedback differently, process both common and distinct inputs individually, and gain completely different experiences. All these unique experiences shape their distinct personalities, ultimately making them different individuals.
Today, I want to talk about "Soulbound Tokens" (SBTs).
I imagine my body as a virtual wallet, where daily experiences flood into it like tons of SBTs—some trivial, some significant, some under my control, some I wish to keep, others I dream of shedding, some I may want to keep secret, some entirely beyond my control, and others I'd like to make public. These are all characteristics or requirements of SBTs.
Before diving into the details of SBTs, let me share a slightly hazy memory. I think it was a boring afternoon in 2020. A group of us gathered in a meeting room at WeWork in Shanghai. David ZOU was there too—he graduated from Harvard and is a renowned blockchain economist—while I was the oldest among us, practically ancient.
We were discussing how to build a regulated decentralized exchange on a public chain, thereby opening a wormhole between public chains and traditional financial services. After several hours of intense brainstorming, later joined by Sun Liling, founder of the LatticeX Foundation, we coined a new keyword: ACT—"Authorization & Certificate Token".
After that, David published at least three papers. In early 2021, I also proposed an advanced technical design for ACT tokens on Alaya, the precursor network to PlatON.
Now I realize that ACT tokens are actually a type of soulbound token. According to my classification, they belong to what I call Type 1 below.
SBT Categories
Here, I attempt to describe them using three elements, which will cover a broader scope than the original paper.
There are three elements: <issuer, owner, controlMode>.
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The issuer belongs to the set {self, other};
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The owner also belongs to the set {self, other};
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ControlMode indicates that SBTs should support multiple modes, with four types as follows:
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- The issuer has full control, which we call IC mode;
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- The owner has full control, which we call OC mode;
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- No control, which we call the simple NC mode;
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- Algorithmic control, which we name AC mode.
The term "controlMode" (IC, OC, NC, AC) refers to operations that can be performed on minted SBTs. Operations such as revocation, expiration, and transfer are not included by default, as we're discussing SBTs.
Based on the above framework, we can categorize the following types of SBTs:
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<issuer, other, IC>: The issuer mints an SBT for another party, and retains full control over it;
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<issuer, other, OC>: The issuer mints an SBT for another party, but the recipient has full control;
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<issuer, other, NC>: The issuer mints an SBT for another party, with no control retained;
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<issuer, issuer, AC>: The issuer mints an SBT for themselves, under algorithmic control (e.g., expires when certain conditions are met);
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<issuer, other, AC>: The issuer mints an SBT for another party, under algorithmic control (e.g., expires when certain conditions are met).
Now, let's ignore the following two cases, as they are quite straightforward:
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The issuer mints an SBT for themselves and retains full control;
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The issuer mints an SBT for themselves with no control.
Full control here means the ability to revoke, expire, or perform other possible operations (depending on the protocol).
ACT Tokens for Regulated Financial Services
ACT tokens actually fall into the first category above (<issuer, other, IC>), where the issuer retains full control over the SBT after minting it to a target wallet. Let's look at applications in regulated financial services.
In this scenario, as we intensely discussed that afternoon, the issuer is an institution or government department that becomes a regulator in traditional financial services through KYC verification. The issuer can mint a special SBT to declare itself as such a regulator on-chain and off-chain.
Then, the issuer mints different types of SBTs to a group of wallets, each of which must pass the issuer's KYC process. In other words, these wallets represent licensed financial service providers.
Different SBTs correspond to different financial service licenses, enabling these wallets to deploy and manage various smart contract-based financial services, such as lending or decentralized exchange platforms.
Healthcare Applications
Similarly, certified public hospital entities can use the first category (<issuer, other, IC>) to mint different types of SBTs into patients' wallets. Medical records such as medication history and allergy information would then follow and protect the patient for life. When patients participate in symptom-sharing programs (of course, all data protected by privacy-preserving AI platforms like Datum and PlatON's joint solution), certified pharmacies can mint participant SBTs into the patients' wallets. These SBTs could offer benefits such as discount coupons for new medications.
Education, Military Service, Charity, and Work Experience
For education, military service, charity, and work experience, I recommend using the second category (<issuer, other, OC>). Accredited universities, military institutions, NGOs, charitable organizations, training centers, and companies can mint SBTs rich in metadata attributes. Individual users can control what parts to disclose publicly. I might want to delete records of exams I failed while highlighting my outstanding academic achievements. To demonstrate resilience, I could use tough experiences from military service to prove my mental strength.
Sports Memberships, Entertainment Memberships, etc.
Any entertainment group or sports club can design various SBTs. I might want to earn an MVP-title SBT that grants me a three-year free golf membership. In such applications, the historical record remains permanent, while benefits may have expiration dates. Both can be implemented using either the first or second category.
Decentralized Social Networks via Soulbinding
I believe we can imagine many interesting applications. The key is that SBTs can form a complex, cross-verified social network. Individuals will become more independent, less bound by corporations, freer, and more creatively empowered. This is the kind of healthy decentralized society I truly wish to enjoy.
Donating to high-quality projects based on SBT-linked digital identities (wallets) will become genuine philanthropy—you might receive an SBT in return, proving your contribution when the project succeeds. I truly see open, collaborative opportunities emerging from this.
Algorithmic Control Mode
The fourth category (<issuer, issuer, AC>) and especially the fifth category (<issuer, other, AC>) help shift AI's role from centralized dominance to democratic participation—exactly the direction PlatON and LatticeX are moving toward. If I have further thoughts, I'll share them in a future article.
Binance's Approach
Binance's approach resembles an implementation of EIP-4973. Their community activities are vibrant, and I'll closely monitor the long-term development of Binance's initiative.
Challenges Ahead
Digital identity is as simple as a digital wallet—yet still not accessible to everyone.
Many people still cannot access the digital metaverse and are far from even getting started.
Next time, I'll dive deeper into the design of ACT tokens, reminiscing about the past and envisioning the future together with you.
References:
· Decentralized Society: Finding Web3’s Soul
· David ZOU: How Can Public Chains Support Compliant Financial Applications? — A Solution Based on ACT
· David ZOU: Blockchain Research Issue 13, 2021 (Total Issue 110): FTs and NFTs in Compliant Financial Applications and Implications for "Alaya + ACT"
· David ZOU: Blockchain Research Issue 12, 2021 (Total Issue 109): Requirements for "Public Chain + ACT" in Compliant Financial Applications
· Binance: What are SoulBound Tokens
· EIP-4973
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