Users must submit legal documents to verify their identity as part of Binance’s KYC (Know Your Customer) verification process, a requirement that most centralized exchanges must meet to be operational in their respective countries today.

Binance Account Bound (BAB) For KYC Verified Users

Binance has officially launched the Binance Account Bound (BAB) token, a cryptocurrency that falls under the Soulbound Token, or SBT, and will act as proof of identity for users who have completed their KYC verification. This announcement on 2022-09-08 at 09:00 (UTC) surprised the cryptocurrency community.

Introducing the #Binance Account Bound BAB Token, the first-ever Soulbound Token on @BNBCHAIN!

BAB tokens are non-transferable tokens that work as identity credentials for Binance users who have completed KYC verification.

Find out more https://t.co/03TKuyXZBC pic.twitter.com/BKSWnM4jJL

— Binance (@binance) September 8, 2022

The Binance Account Bound (BAB) token was launched on the BNB Chain blockchain. According to the exchange, many projects have already committed to using the BAB token as a form of community identification.

A user can use their BAB verification token after getting it on Binance to participate in developing and building new projects on the BNB blockchain. Binance will disclose other uses shortly.

Soulbound Token: A New Category of Token For A Decentralized Society

Back in May 2022, Vitalik Buterin, the founder of Ethereum (ETH), introduced the Souldbound Token, or SBT, a non-fundable, non-transferable token to set up a decentralized company. These are special identification tokens designed for use in the crypto community.

Similar to what Buterin proposed, BAB tokens are also not transferrable, according to Binance, since users cannot transfer BAB tokens to other users. Secondly, they are revocable as users can cancel their BAB tokens. They are also unique since only one verified Binance user ID could mint one BAB token on a given chain.

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The post Binance Introduces a New Crypto For KYC Verified Users: Detail appeared first on Times Tabloid.

What Does Soulbound Property Mean?

Soulbound is a property of an item that makes it non-exchangeable by mail or auction trading. It usually increases the value of the item on the secondary market.

Read Also: Ethereum Co-Founder Vitalik Buterin: “I’m Not a Billionaire Anymore”

Since it’s impossible to sell or transfer Soulbound items, users sometimes trade their accounts in exchange for money. However, SBTs could eventually “vest” into transferable tokens in the future, according to a paper titled, “Decentralized Society: Finding Web3’s Soul.”

In the paper, the accounts are referred to as “Souls” and tokens held by the accounts as “Soulbound Tokens” (SBTs).

The paper reads in part:

“We refer to the accounts as “Souls” and tokens held by the accounts as “Soulbound Tokens” (SBTs). We initially assume publicity despite our deep interest in privacy because it is technically simpler to validate as a proof-of-concept, even if limited by the subset of tokens people are willing to publicly share.”

The concept of “programmable privacy” was later introduced in the paper for richer use cases.

The paper reads further:

“Imagine a world where most participants have Souls that store SBTs corresponding to a series of affiliation, memberships, and credentials. For example, a person might have a Soul that stores SBTs representing educational credentials, employment history, or hashes of their writings or works of art. In their simplest form, these SBTs can be “self-certified“, similar to how we share information about ourselves in our CVs.”

According to the paper, the true power of these mechanisms surfaces when SBTs held by one Soul (account) can be issued or attested by other Souls (accounts) that are counterparties to these relationships.

Citing a good example, the paper says the Ethereum Foundation could be a Soul that issues SBTs to Souls who attended a developer conference. Also, a University could be a Soul that issues SBTs to graduates.

Read Also: Ethereum’s Vitalik Buterin: Russian Government Is One of My Enemies Now

Soulbound Tokens Have the Potential to Change the Industry

In terms of blockchain and Web3, Ethereum co-founder Vitalik Buterin believes that Soulbound tokens have the potential to transform the industry.

The implementation of SBTs will enable blockchain-based ecosystems to have numerous advantages in creating market standards, measuring decentralization, compensating strategic behavior, and lots more.

In a nutshell, Soulbound tokens create identity and representation of users by giving them unique traits. Unlike NFTs that represent what someone can afford, SBTs will stand for who a person is.

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