# Soul-bound tokens

What are soul-bound tokens?

Why use soul-bound tokens in Pythia?

Pythia's soul-bound tokens?

### What are soulbound tokens?

<figure><img src="/files/gCfTEzuUt5WUC7KUCjoF" alt=""><figcaption><p>Fig. 1: Soul-bound tokens</p></figcaption></figure>

Soulbound tokens are a type of token that represent commitments, credentials, and affiliations of the holder. The concept of souldbound tokens was first broached by Vitalik Buterin in "Decentralized Society: Finding Web3's Soul" (2022). The concept is closely related to the idea of on-chain reputation.&#x20;

The idea being put forward is that Web3 needs its own version of reputation systems, because reputation systems are a convenient way to establish basic trust and transact in our highly impersonal societies. The Web3 world already has reasonably effective reputation systems (e.g., credit rating, academic credentials); however, most of these are not applicable to the Web3 context, due to the latter's greater demands to privacy, decentralization, and personal sovereignty.&#x20;

Soulbound tokens are therefore a way to reinvent reputation systems in a way that does not contradict Web3 and crypto's core tenets.&#x20;

Soulbound tokens are usually untransferable and have some reputation function underlying them (i.e. function that determines how the holders accumulate and/or lose reputation/track record).&#x20;


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