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Crypto Exchange Binance to Issue 'Soulbound' Tokens to Users Who Complete Know-Your-Customer Checks
The tokens will allow users to participate in building projects on the BNB chain.
Updated May 11, 2023, 6:46 p.m. Published Sep 8, 2022, 3:29 p.m. 1 min read
Cryptocurrency exchange Binance plans to issue a "soulbound" token on the BNB blockchain to all users who complete know-your-customer (KYC) requirements, according to an official announcement.
Soulbound tokens, which in this case act as an identity passport across the BNB chain, are unique and non-transferrable. Users who would prefer their identity not be shared across the entire network can opt out of the token.
Read more: What Are Soulbound Tokens? The Non-Transferrable NFT Explained
Binance's soulbound token – named binance account bound (BAB) – will allow users to participate in "building projects" while earning rewards, according to the release.
The concept of soulbound tokens was first discussed in a blog post by Vitalik Buterin, a co-founder of the Ethereum blockchain, in January. He described the new asset class as non-transferable digital tokens that represent social identity in a decentralized society.
The use of KYC in crypto came under intense scrutiny this week when decentralized exchange dYdX prompted its users to complete a "liveness check" using webcam technology, with several users commenting on the antithetical relationship between decentralization and KYC.
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