Soulbound Tokens and Non-Fungible Tokens are both on the blockchain, but they are for different uses and differ in many crucial ways:
Transferability: NFTs are transferable tokens that may be bought, sold, or traded on various marketplaces. They may be transferred by their owners to others, allowing a liquid market for unique digital assets. SBTs, as non-transferable, are forever stuck with the owner or institution that possesses them.
Purpose: NFTs are generally utilized in digital art, collectibles, and other exchangeable goods. SBTs are intended to represent individual achievements, identity, or qualifications with the aim of building trust and reputation within decentralized communities.
Ownership Model: NFTs bestow ownership of content on the internet, i.e., artwork, videos, or songs. Soulbound Tokens are linked with ownership of untradable assets, i.e., diplomas, certificates, or work history. These assets are utilized to build a person’s decentralized identity for non-monetary purposes.
Marketplace Interaction: NFTs prospered in dynamic marketplaces where collectors were able to buy and sell unique works of art or other digital items. Soulbound Tokens exist outside of the marketplace and possess inherent value because they represent a symbol of an individual’s history or qualifications.