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Binance Exchange has just announced that it will use an innovative system to verify the identity of its users (KYC). A system that uses Soulbounds tokens, a kind of derivative of NFT without their portability. Let’s see together how Binance will do it and, above all, why the platform is doing it. We will also delve into the possible use cases for these new digital tokens.
Soulbounds tokens in the heart of Binance KYC!
Through a blog post, the Binance platform announced the release of its first Soulbound Tokens (SBT). Tokens issued through the BNB chain and delivered to all mobile app users who have verified their KYC (Know Your Customer). The token each verified user receives is the BAB token for the linked Binance account.
Good to know : Soulbound tokens are tokens that follow the same principles as NFTs, except that they are not transferable because they are associated with a unique address. These tokens, created on the Ethereum blockchain, are primarily intended to promote decentralization. For Vitalik Buterin, the initiative of these new tokens could represent the future of Web 3.
tokens Binance Account Linking (BAB) will be displayed on users’ wallets to emphasize that they have passed KYC. In a way, this token will confirm the platform user verification. If this option is initially only open to mobile app users, Binance would eventually like to democratize the use of these tokens for all users. In the world of cryptocurrency exchanges, Binance is the first player to use these new tokens created in 2022.
Save time on KYC!
As we have seen, the tokens anchored to the soul allow the management of an ecosystem with a very strong decentralization. In a blog post, Binance calls for a fully decentralized organization on the BNB chain. For users of DeFi protocols, this announcement sounds like a sweet melody. In fact, many users criticize the time-consuming aspect of KYC.
With this SBT, you no longer need to check dozens of different KYCs. In other words, Binance SBT can somewhat be compared to an identity card. An ID card that eliminates new KYCs for applications that recognize the BAB token.
Ultimately, using Binance SBT is just a specific use case. But in the future, SBT could open up new horizons. Some have already been raised to highlight the interest these tokens can represent for governance mechanisms. In fact, portability is probably the main issue when it comes to this. distribution of state power. Thanks to Soulbound tokens, it is no longer possible to concentrate interests and powers.
To authenticate NFT works, Soulbounds tokens can also be compelling verification items. Proving that one or more NFTs have been named by the artist in question. SBTs can also be an effective tool for modifying token distribution via airdrops.
As Web 3 evolves, other outlets for SBT may emerge. Some remember in particular that Soulbinds are tokens. no economic interestprecisely because they are not transferable. Perhaps this is a new way of understanding digital assets: getting rid of their purely speculative aspect.
Also Read: Has Binance Really Lost 90% Of Its Users To KYC?