What Are Soulbound Tokens? The Non-Transferrable NFT | Explained

The non-transferable NFT Soulbound Tokens (SBTs), which cannot be transferred from one person to another, will be assigned to a single individual. Unlike other cryptocurrencies, it would be earned rather than purchased and would always be tied to a particular person.

This article discusses the definition of Soulbound tokens as well as the best uses for non-transferable NFTs.

What Are the Non-transferable NFT Soulbound Tokens (SBTs)

Soulbound tokens (SBTs) also known as non-transferable NFTs (non-fungible tokens), can be achieved rather than sold and bought. It belongs to only a single individual and cannot be shared ever from one person to another. For example, medical records, membership, digital id, certification, attendance system, and many others.

Vitalik Buterin a well-known computer programmer and founder of Ethereum introduces the idea of “Soulbound” assets on the blockchain in a blog post on January 2022, in this blog, he described how the well-known fantasy game World of Warcraft has potential as well as in this game, once you acquire game items, they cannot be traded or sold to another player.

What Is the Purpose behind Non-transferable NFT Soulbound Tokens (SBTs)

Not all of the assets could be assigned to everyone over the internet, most digital assets are very specific and only belong to a single authority or a single individual. This type of asset cannot be sold or purchased. It can be only achieved by the achiever for example online certification, digital identity, game assets, game rewards, and many others.

For instance, you enrolled in an online course and after successful completion of the course, you would be rewarded in the form of certification. That certification is a digital asset that only belongs to you and you cannot sell your reward to someone else.

Usage of Non-transferable NFT Soulbound Tokens (SBTs)

Here the seven more interesting applications that Soulbound tokens open are listed below:

  • Verifiable Credentials
  • Delegated authority & governance rights
  • Needs for “Know Your Customer”
  • Credit Scoring
  • Spam and bots on social media sites
  • Electronic Government Voting
  • Patient Records System
  • Rewards and items in web3-based games

Limitations of Non-transferable NFT Soulbound Tokens (SBTs)

Soulbound tokens and non-transferable NFTs have some drawbacks:

  • Privacy
  • Security
  • Interoperability
  • Non-transferability


Non-transferable NFTs, often referred to as Soulbound tokens (SBTs), can be earned in the form of reward rather than bought and sold and they can never be passed from one person to another and only belongs to one person.

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