The emergence of the credit system is of great significance to social governance, especially in the financial and economic fields. It can record the bad behavior of enterprises and individuals, so as to quickly provide testing results for relevant institutions. Just like if we have bad personal credit, it is difficult to get a loan in the bank.
Web3 is a decentralized world, which brings a high degree of freedom of transaction behavior, but it is precisely this kind of freedom that needs to be guaranteed by credit. Relying on the trust environment built by the blockchain itself is an important guarantee, but similarly, a credit reporting system needs to be built in Web3 to measure whether users have bad behavior records.
How does Web3 record users' on-chain behavior without violating its purpose of decentralization and privacy protection? To put it simply, as long as the behavior of users on the chain can be quantified, then this problem can be easily solved. In August of this year, Vitailk, the founder of Ethereum, proposed a non-transferable token called "Soulbound Token" (SBT), which provided an executable solution for the quantification of behavior on the chain.
The Chinese name of SBT is translated as "Soul Binding Token". As the name suggests, it can be bound with your "soul" and cannot be sold. Specifically, SBT is a non-financial token that is bound to the user's wallet address and cannot be transferred. SBT can contain a lot of information, such as the user's education, work experience, medical records, etc. can be encoded on the chain, and even record the user's consumption behavior, asset status, personal bad records, etc., making SBT a decentralized "Credit scoring" in the web.
When it comes to "credit score", we are no strangers to words such as "Sesame Credit Score". This is also a user portrait obtained in our current Internet based on various behaviors of individuals and using technologies such as big data analysis. SBT is very similar to this approach, but there is also an essential difference between them, that is, SBT is in the hands of the user. In traditional networks, centralized platforms or institutions control the data of users, and they can also obtain huge profits from user portraits, while users get almost nothing. SBT has completely changed this phenomenon. Users can truly own their own data and check whether they have bad records in real time, instead of paying a certain fee to check with some credit agencies in the traditional network.
This kind of on-chain behavior record is not only able to better build an on-chain behavior "resume" for users, it is also very useful for some project parties. We know that many project parties like to create projects anonymously. Although this enhances privacy, it also makes many users worry about whether the project party is credible. Many financial cases that occur in the Web3 world are caused by the project party. caused by running away. With the credit investigation system established by SBT, the project party only needs to show its behavior records, and it can still remain anonymous.