Vitalik Buterin Talks About the Advantages of Non-Transferable NFTs

<p>The Ethereum co-founder expressed his opinion on the need for "soulbound" tokens.</p> <p>Vitalik Buterin, co-founder of Ethereum, has written an opinion piece on non-transferable NFTs, arguing that in some cases, token transferability is counterproductive.</p> <p>Genuine Non-Fungibility</p> <p>Non-transferable tokens, according to Vitalik Buterin, could benefit Ethereum users.</p> <p>Today, Vitalik Buterin wrote a blog post about the possibility of "soulbound" NFTs, or NFTs that are truly non-fungible in the sense that they cannot be sold or separated from their owners.</p> <p>Using World of Warcraft terminology (a "soulbound" item is one that cannot be sold or separated from the player who carries it), Buterin used the majority of his post to consider the same concept in relation to the NFT space, where most NFTs can currently be bought, sold, or transferred from owner to owner.</p> <p>"While transferrable NFTs have their place and can be extremely valuable on their own in supporting artists and charities," Buterin wrote, "there is also a large and unexplored design space of what non-transferable NFTs could become."</p> <p>To demonstrate his point, Buterin provided a number of examples, both real and hypothetical, of situations in which transferability is not a desirable property in an NFT—he cited POAP, the "Proof-of-Attendance" protocol, which distributes NFTs to users who can demonstrate that they personally attended an event. While POAP tokens are technically available for trading on OpenSea, Buterin argues that their primary use case (signalling that a person actually attended an event) would suggest that they would make more sense as strictly non-transferable tokens.</p> <p>Buterin also suggested that non-transferable, "soulbound" tokens of governance rights might make more sense. Rather than allowing for the outright purchase of governance tokens, which could easily result in the wealthiest or most power-hungry individuals amassing an undue proportion of them, Buterin proposes that governance t