Binance launches soulbound token for decentralized KYC
Major crypto exchange Binance launches BAB, a new form of soulbound token, to offer decentralized KYC to its wallet holders. The cryptocurrency exchange itself describes this step as paving the way for the decentralized society on the BNB Chain.
BAB tokens as confirmation for KYC-verified users
Binance is going to issue the first-ever soulbound token (SBT) “Binance Account Bound (BAB)” based on the BNB Smart Chain. That’s what the cryptocurrency exchange, founded in 2017 by Changpeng Zhao, announced on August 1.
BAB tokens will be displayed on users’ wallets to indicate that they have completed Binance’s KYC procedure. The token will thus certify the user’s verified status on Binance and can only be minted after successfully completing the KYC verification process. In an official announcement, soulbound tokens (inititally proposed by Etherem founder Vitalik Buterin) are explained as follows:
Soulbound tokens are a new type of tokenized credential, identity, or affiliation. SBT’s are non-transferable and non-financialized.
Paving the way for the decentralized society
However, utilizing the tokens as a Binance identity is only supposed to be the first step:
As we begin to explore how credentials will function in Web3, whether it be in the form of a verifiable skillset or an earned title, further use cases for the BAB token will arise. This sense of accountability paves the way for a more efficient decentralized community and space.
Want to read more? Discover the advantages and disadvantages of KYC in our beginner friendly BTCATH blockchain guides: Explained: Advantages & Disadvantages of KYC.
This article does not provide investment advice. Historical cryptocurrency data is not a guarantee of future market developments. The author may hold several of the cryptocurrencies mentioned in this article.
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