NewsFlash Articles Data Fundraising BlockBeats Pro

Proof of Utility: a solution to quantify NFT rights and interests through the SBT technical framework

Read this article in 15 Minutes

SBT can play a very important role in solving these enabling problems.

Original author: Little Mao, N_0

Vitalik Buterin proposed the Soulbound Token (SBT) "soul Binding Tokens” theory, and mentioned that NFTs with social value can try to carry out soul-bound tokens. The Orange Book also explains this concept in detail and proposes a Imagination about the "humanity currency" that puts social behaviors on the chain. The topic of how to define NFT empowerment has been discussed in this field for a long time, and the NFT community has had some controversial discussions for a long time:

- There is currently no technical standard and on-chain framework for NFT empowerment. It is not easy to quantify on the chain;
- NFT owners cannot choose the utility they want, but passively wait for the airdrop;

- Currently there is no NFT project party and users to jointly make decisions based on on-chain behavior and maintenance rewards on-chain technical framework;

It is gratifying that many NFT projects are still trying to make some innovations from the perspective of NFT empowerment. For example, Moonbird's Nesting mechanism empowers the empowerment mechanism that puts the important dimension of "time" on the chain. In the process of creating and operating NFT projects, we have imagined whether the behavior of holders can be chained and rewarded accordingly? Based on these theories, we increasingly feel that Soulbound Token (SBT) can play a very important role in solving these empowerment problems.

Not only the NFT itself, can the rights and interests of NFT be bound by the soul?

NFT token holder’s soul and on-chain behavior

- The behavior of the holder (hodl or buying and selling) determines how many soul-bound tokens (SBT) can be obtained

NFT Soulbound Token - the rights and interests of token holders

- Soulbound tokens generated by souls Soulbound Token (SBT) can be used to unlock project rewards and benefits< /p>

One of the clear purposes of this mechanism: NFT holders can actively choose and unlock which items of the project Instead of passively receiving unknown airdrops every time you need to check your wallet.

For example, avatar-type NFT projects usually airdrop new NFTs (such as Banners or pets with related styles) as rewards for holders after issuing the main PFP. Usually, NFT holders can only passively wait for unknown airdrops. But if you think about it, if the NFT project has a SBT-related technical framework, then the NFT can freely choose the rewards you want to get during the holding process.

What are NFT Soulbound Tokens?

Orange Book explains soul binding in article The setting of fixed tokens: "Soul Bounding Token (Soul Bounding Token), referred to as SBT, SBT is a token that cannot be transferred, just like there is a kind of particularly powerful props in the game, once picked up, it will be linked with your account It is bound and cannot be transferred to other accounts. The other is Soul, which is the wallet account holding SBT, and the account holder can be an organization or an individual.”

The NFT empowerment envisioned in this article proves the SBT technical framework. You can more vividly understand that SBT is the wish for the dragon in the animation "Dragon Ball". Each "Dragon Ball" represents One SBT token will consume one "wish". The difference is that these "wishes" are the rights and interests that different NFT projects will deliver based on their own resources and roadmaps, and have the following characteristics:

- non-transferable , bound to the address
- The total amount is limited, and the project can issue more

- It can be used to unlock on the chain or redeem the income delivered by the NFT project

- Combining the on-chain behavior of the NFT owner (including factors such as holding time) to determine the SBT tokens obtained

Under the technical framework, we believe that "time" (the time of holding NFT) determines the value of NFT important on-chain factors. Inspired by Moonbird, we created HODL CLOCK to isolate key components of this non-custodial staking mechanism. Therefore, by holding the on-chain time certificate of NFT for a certain period of time, NFT holders can obtain the corresponding on-chain reward certificate, that is, soul-bound tokens. In addition, this mechanism can also help establish an on-chain honor system for NFT holders, and freely choose different rights and interests. The following picture is a schematic example:

Combining the technical framework of SBT: realizing a long-term reward mechanism based on on-chain behavior

Because the NFT field is still in its early stages, with the continuous development of the NFT market, the early rights and "playing methods" may no longer be popular. In order not to be eliminated by the times, the NFT project team must always find new ways to play NFT.

So, is it possible to develop a long-term technical framework for NFT projects that can adapt to different gameplays? Let's imagine, for example, that NFT project A introduces new gameplay and encoded new resources in its smart contract, we can use the following mechanism template to call the holder's behavior, and formulate and realize all possible future rewards.

(New gameplay)Name of game: Compete for HODL reward
(Participating players)Game members: NFT tokens
(Player resources)Resources: Clock associated to each NFT token
(Player’s on-chain behavior) Action space: {mint, transfer by owner, transfer by broker, burn}
(Player’s reward method) Reward function:

Action leads to the modification of resources.
Reward is calculated based on resources that each member holds.

We implement the resource modification function in the smart contract:
token_id.mint token_id.clock :=0
token_id.transferByOwner token_id.clock += time
token_id.transferByBroker token_id.clock :=0

Afterwards, we tune the reward function based on resources:

reward = match token_id.clock with
0 “Not royal”
[1..a] “Bronze”
[a+1..b] “Silver”
others “Gold”
end

If the NFT project follows this technical framework, then adding a game requires rewards, similar to filling out a new form:

Name of game: #a string describe the rule
Game members: #a set of identities
Resources : #a set of variables stored in the smart contract
Action space: #a set of functions defined in the smart contract
Reward space: #a set of utilities guaranteed to game members

Reward function:
Resource mapping:
f: #Action space #Resources
Parameterized reward mapping:
g: #parameter_list * #Resources #Reward space

Different from most of the existing roadmaps and Moonbird's Nesting system, this soul-bound token is nested with the Hodl Clock and the Utility Function of the technical framework, which has a greater degree of freedom. At the same time, the reward parameters under the SBT technical framework are adjustable. Existing rights and interests can be realized first, and uncertain rights and interests in the future can be bypassed and adjusted in the future. Situations where the rights and interests of the user result in devaluation of the experience.

In short, this system is essentially a non-transferable on-chain certificate SBT given to NFT users by the NFT project party, aiming to achieve a fairer on-chain economic reward system, and implies that the NFT field wants to achieve some new innovative ideas:

- Not only the NFT itself, but the way users use the NFT is also recorded on the chain as part of the value of the NFT.
- Formulate an on-chain framework between NFT project parties and users on the chain, such as putting the behavior of NFT users on the chain and calling it as a contract code, and the final result is jointly fed back by NFT users and project parties.

MaoDAO M³ Labs is trying to develop the above technologies to empower Ready Player Cat holders, and began to try to use this The mechanism is developed into a one-click integrated Protocol for use by more NFT project parties.

Taking Ready Player Cat as an example, we further understand the implementation effect of this SBT technical framework: Step 1: Users can choose to add HODL CLOCK clock to the kitten (once the trading behavior in the trading market will be cancelled) ). Step 2: After meeting the timing, you will get the corresponding Soulbound Token to freely choose different rights and interests. These rights are closely related to the new projects that MaoDAO M³ Labs is incubating, including the new NFT collection Ready Player Soul, NFT lottery infrastructure toolsNFT Luckbox and the Twitter NFT record tracking plug-in BlockTracker, which is still in testing. In the third step, the project party determines the new gameplay, but still includes the previous honor system, and a fairer reward framework still applies.

This time, the design rewards of the NFT gameplay will be on the chain, and the decision to choose which rights to unlock lies with the holders themselves! (More information will be announced when the beta version is released)