Nonfungible tokens (NFTs) are known for their transferability and commercial viability. But, Vitalik Buterin says that there are some downsides to these features. In a blog post that was published on January 26, the Ethereum co-founder said that he wishes to make NFTs soulbound as with the namesake item class in popular MMORPG World of Warcraft (WoW).
While outlining his reasons, Buterin said that in case someone shows that they own a nonfungible token that is obtainable by doing X, like attending an auction, it is not possible to tell whether the person really obtained it from the auction themselves while attending or just acquiring the NFT through the secondary market.
The soulbound feature in WoW prohibits an item from being mailed, traded, or sold at the in-game Auction House to other players. It was designed by developers to prevent the “twinking” or passing down gear from high-level to low-level characters to speed up the grinding process of fighting different monsters to gain some experience.
Nonetheless, they also are seen to serve the purpose of demonstrating achievement; that is, the game character earned the item by managing to defeat challenging bosses and not through an heirloom.
The latter property appears to be of interest to Vitalik Buterin as he raised the point that on-chain proposals to store university degrees, driver’s licenses, and more, would encounter challenges in case someone who does not meet the essential conditions can readily acquire them.
Vitalik Buterin also spoke highly of the “proof of attendance protocol” project POAP that stores digital mementos of one’s life on-chain, and issues a distinct badge supported by a cryptographic record. The team behind that project encourages the developers who care about the transferability to check “on-chain if the current owner is the same address as the original owner.”
However, just like soulbound items in WoW, taking away the transferability of NFTs might also presumably eliminate their commercial viability.