The company introduced BAB, a Soulbound Token on the BNB Chain, as a decentralized solution to the exchange's KYC requirements. Soulbound Tokens are non-transferable tokens that cannot be transferred between wallets.
Because the NFT cannot be traded, it can be used to identify the wallet holder on the blockchain. Data associated with the NFT can be used to pinpoint recorded wallet actions, such as interacting with a dApp or smart contract.
The Binance Account Bound (BAB) token will "certify the wallet owner's verified user status on the platform and will also be available for use by third-party protocols." Ownership of BAB will be optional for its customers, who will be able to complete a KYC check via the Soulbound Token or more traditional means.
Ownership of a BAB token initially indicates that a wallet owner has passed the Binance KYC check, with no additional user data contained within the token. However, "Binance may issue other types of BAB tokens'' with additional functionality and use cases in the future.
CEO Changpeng Zhao commented on the launch of BAB, saying,
"We foresee numerous use cases for the BAB token, and we will actively collaborate with the community to develop this revolutionary vision of decentralized society."
The BAB token is not the first Souldbound Token to be issued but the first to be issued on the BNB Chain. In June, Phala Network announced the launch of Soulbound Tokens, which link attributes to specific in-game avatars. Idexo has also recently announced support for Soulbound Tokens in its web3 SDK, allowing developers to incorporate the tokens into projects "with just 1 line of code."
The NFT space is buzzing with innovation and forward momentum during this bear market. The NFT community is focused on determining the true value proposition for non-fungible technology, with 'utility' being the most recent buzzword in the space.
Will Soulbound Tokens demonstrate a primary utility of NFTs in the blockchain industry? Binance is certain that they have a place, as it has integrated the technology into a core regulatory requirement for its business model, KYC.