The Non-Transferable Future of Web3
Non transferable NFTs are fixing the over financialization of web3
Web3 is infamous for its casino culture defined by speculative financial tokens. The start of Ethereum (the first programmable blockchain) with issuance of tradable coins and NFTs led to this trading focused crypto culture and with it scams, plutocracy, untrustworthy DAO governance and hyper financialization of everything.
A new “nontransferable”, earned NFTs are taking hold and leading this change. The degen, wen token, wen moon culture is on its way out.
How
Nontransferable NFT by design cannot be transferred which means they cannot be bought, sold, and traded. The only way to acquire them is to earn them.
Various earned nontransferable NFTs showcases individuals multi dimensional identity on the blockchain. Various NFTs representing various facets of the individual helping unlock a wide variety of social and economic opportunities, both online and IRL.
Nontransferable NFTs will push web3 into the mainstream as people will realize the benefits of building decentralized identity that they can own and take with them as they move around on the internet and IRL
Enables seamless trusted coordination as these NFTs provide the base layer of trust. One would be able to simply flash their NFTs to gain access to online communities, IRL meetups and work.
By putting credentials and attestations on-chain as non transferable NFTs, individuals can showcase them in their wallets as a collection of digital trophies, affiliations and achievements.
The nontransferable earned NFT is the most exciting shift happening in Ethereum, moving away from speculation to real world application. Also the one that’ll lead web3 into mainstream. Both Unlock Protocol and Otterspace easy to use, no code interface makes it easy to grant nontransferable NFTs. Many DAOs have started to implement these tokens for governance and community co-design for instance Kokonut DAO and Cabin
It also opens up a pathway for anyone to build an identity and participate in the borderless economy, specially meaningful for people who’ve been denied access for lack of identity for instance refugees and stateless citizens.
Podcast
To dig deeper into the world of nontransferable token from its origin to current use cases and how it’ll reshape society and web3 listen to the podcast with Emily Furlong, Co-founder Otterspace, the protocol for nontransferable tokens, the episode also features Bill Bicket, former Meetup.com and current lead Techsoup Maker Labs.
You can also listen on Apple or impactdaos.xyz
I recently issued Impact DAO Course Level 1 certificate as a nontransferable NFT. People who completed the course and assessment, earned the NFT. I used Unlock Protocol an easy to use, no code tool to deploy the smart contract.
Fun fact: Did you know widely used POAPs, proof of attendance badges are transferable and thus defeats the trustworthiness purpose.
Balaji Srinivasan, former CTO Coinbase and author, The Network State on the shifting trend
Go Deeper
Vitalik Buterin, Founder of Ethereum first introduced the concept of nontransferable token in his blog post published Jan, 2022. Borrowing the concept of non transferable token from world of warcraft, soulbound item.
A soulbound item, once picked up, cannot be transferred or sold to another player.
On May 2022, Vitalik along with 2 others published the research paper, Decentralized Society: Finding Web3's Soul introducing non transferable tokens as Soulbound Tokens.
Web3 today centers around expressing transferable, financialized assets, rather than encoding social relationships of trust. Yet many core economic activities—such as uncollateralized lending and building personal brands—are built on persistent, non-transferable relationships. In this paper, we illustrate how non-transferable “soulbound” tokens (SBTs) representing the commitments, credentials, and affiliations of “Souls” can encode the trust networks of the real economy to establish provenance and reputation.
Not shill, but look at RevPop Data Sovereignty concept