Soulbound Tokens: the brave new world proposed by Vitalik Buterin

In mid-May Ethereum co-founder Vitalik Buterin with E. Glen Weyl and Puja Ohlhaver published a paper titled “Decentralized Society: Finding Web3’s Soul’.” Some say the 37-page document makes for an unsettling read. There is something inherently disconcerting and Black Mirror-esque about the “Soulbound Tokens” (SBTs) concept that the paper explores. Buterin and his co-authors propose that SBTs could be utilised as a record for things such as a person’s academic history, reputation, personal relationships and membership in different associations. To some, that seems dystopian.

More than simply an on-chain resume, SBTs could form the basis upon which a financial institution could issue credit.

The paper is somewhat of an Orwellian manifesto, setting the scene for a future world in which human interaction and achievement is tokenized. In short, it makes the case for expanding blockchain’s application beyond crypto and defi to society more broadly, coining the term DeSoc to refer to decentralised societies. To help contextualise SBTs the co authors provide some examples. They suggest that, 

“The Ethereum Foundation could be a Soul that issues SBTs to Souls who attended a developer conference. A university could be a Soul that issues SBTs to graduates. A stadium could be a Soul that issues SBTs to longtime Dodgers fans.”

On a technical basis, the possibilities for SBTs are endless. Every characteristic of a human’s identity could be reflected by the issuance of an SBT. 

In a revealing Twitter exchange – that certainly echoed the anxious sentiment of many crypto commentators – a user tweeted the following: 

“Soulbound tokens scare the s**t out of me. 

If institutions can ‘mint’ credentials that I can’t transfer, what happens when my government issues a credential saying I attended protest march A. 

And what saves me when “attending protest march A” becomes retroactively illegal?”

That tweet highlights the great concern that SBTs will need to overcome before there is any kind of social mandate for them: will they be used to strengthen the control of authoritarian regimes or surveillance over a population? “On a technical basis, the possibilities for SBTs” is not an inherently benign concept.

In response to the tweet and in defence of the SBTs, Buterin hit back:

“Can’t they do this already? 

(government agencies maintaining opaque shadowy records of who’s been acting in ways they don’t like, that is) 

Feels like SBTs would be a step backwards for them, as the target immediately knows they’re being watched.”

Buterin’s retort was likely referring to the Chinese Government’s alleged social credit system, whereby records are kept of citizens’ misbehaviour, such as j-walking or littering. It has been alleged that a poor social credit score in China can lead to the loss of certain rights (note: these are allegations and suppositions only, and the reality of the social credit system, and the extent to which it exists, is very much muddied by propagandist media). Although SBTs are proposed as a force for good, it is not an impossible leap to imagine a context in which SBTs reinforce dystopian tendencies in society.

Privacy?

In the paper, Buterin does acknowledge that privacy is a key challenge for SBTs. They acknowledge that too much information may be revealed about any given soul. Buterin concedes that the revelation of too much information leaves a person vulnerable to social control. Further, it is difficult to imagine how a person could maintain a private life, or, if they wished, fade into obscurity in an environment where their affiliations with different groups and entire history or CV is public information. 

Beyond privacy law, there is a body of academic study that refers to the notion of a “right to be forgotten.” The right to be forgotten traditionally relates to a right to be forgotten by the Internet and have data removed from Internet searches and the like. It is difficult to imagine how such a right could exist in a world governed by SBTs – your social history would exist as an immutable record for all time. Reformation is a key tenet of our justice system and it implies that humans have the capacity to change and grow. The unchangeable nature of SBTs would certainly make the prospect of overcoming one’s past mistakes all the more difficult.

It is clear that the co-authors of the paper are attempting to solve existing problems in the Web3 space with SBTs, such as wealth concentration and a high dependency on centralised platforms (despite the fact that centralisation was the characteristic Web3 aimed to transcend). How exactly SBTs will solve this is not entirely clear and the co-authors do acknowledge the risk that the technology could aid in the blacklisting or targeting of disfavoured social groups, the enforcement of restrictive migration policies, or even the making predatory loans. 

However, wherever you fall on the debate, Buterin’s latest dream for Web3 is certainly a thought-provoking one. Only time will tell whether SBTs make for a fairer, more transparent society, or if they are the start of a new blockchain-enabled dystopia.