The Future of blockchain-based Decentralized society: Finding Web3’s Soul

There is no deficit of innovative scenarios about how Web3 may develop, though one of the latest, “Decentralized Society: Finding Web3’s Soul”, a paper issued in mid-May by E. Glen Weyl, Puja Ohlhaver, and Vitalik Buterin is close to becoming one of the top 50 most downloaded papers on the SSRN scholastic research platform.

The engagement, one might reason, has much to do with the inclusion of Buterin, the legendary co-founder of Ethereum. Though it could also be a function of the paper’s purpose and scope, which includes asking questions like What type of society do we really want to live in? finance-based or trust-based?

The authors demonstrate how “non-transferable ‘soulbound’ tokens (SBTs) symbolizing the commitments, credentials, and associations of ‘Souls’ can encode the trust networks of the real economy to set provenance and reputation. These SBTs occur to be something like blockchain-based curricula vitae, or CVs, while “Souls” are in general people or strictly articulating, individuals’ crypto wallets. Regardless, Souls can also be institutions, like Columbia University or the Ethereum Foundation. The authors wrote Picture a world where most parties have Souls that store SBTs corresponding to a series of affiliations, memberships, and credentials. For example, a person might have a Soul that stores SBTs representing educational credentials, employment history, or hashes of their writings or works of art.

Also Read, SoulBound Tokens (SBTs) will secure our identities on Web3: Buterin

Further, In their easiest form, these SBTs can be ‘self-certified,’ as per the authors, and is similar to how we share information about ourselves in our CVs. But this is just scraping the surface of possibilities, the true power of this mechanism arises when SBTs kept by one Soul can be issued, or attested, by different Souls, who are counterparties to these affinities. These counterparty Souls could be individuals, companies, or institutions. For example, the Ethereum Foundation could be a Soul that issues SBTs to Souls who attended a developer conference. A university could be a Soul that issues SBTs to graduates. A stadium could be a Soul that dispenses SBTs to longtime Dodgers fans.

There are a bunch of aspects to outline in the 36-page paper, which periodically seems a jumble of disparate ideas and solutions ranging from retrieving private keys to anarcho-capitalism. But it has gained recognition, even from critics, for describing a decentralized society that isn’t specifically concentrated on hyper financialization but rather on “encoding social relationships of trust.”

Fraser Edwards, co-founder, and CEO of Cheqd (a network that supports self-sovereign identity (SSI) projects)  bashed the paper on Twitter. Regardless of this he also noted that Vitalik standing up and telling NFTs is a bad idea for identity is a great thing. Also, the publicity for use cases like university degrees and certifications is fantastic, as SSI has been terrible at marketing itself. Further, he adds that the paper’s attention to issues like loans being over collateralized due to a lack of usable credit ratings is excellent.

In general, the reaction from the crypto community, in certain, has been quite positive, said co-author Weyl. Weyl, an economist with RadicalxChange, delivered the core ideas for the paper, Ohlhaver did most of the writing, and Buterin reworked the text and also authored the cryptography section.

According to Weyl, the only real pushback against the paper came from the DID/VC (decentralized identifiers and verifiable credentials) community, a subset of the self-sovereign identity movement that has been working on blockchain-based, decentralized credentials for some years now, including ideas like peer-to-peer credentials.

Buterin’s Lack of Understanding

Nevertheless, the visionary work encountered some objection from media outlets such as the Financial Times, which dubbed it a whimsical paper. Some are also nervous that SBTs, given their potentially public, non-transferable qualities, could give an upgrade to a Chinese-government-style social credit system. Others fired shots at Buterin personally, slamming his lack of understanding of the real world.

Crypto cynic and author David Gerard went even one step further, expressing, Even if any of this could truthfully work, it’d be the worst idea ever. What Buterin wants to enforce here is pushing permanent records of all individuals, on the blockchain.

Check out, Buterin is not a fan of BAYC NFTs

Others remarked that a consideration of the projected SBT use cases such as setting provenance, unlocking lending markets via prestige, measuring decentralization, or allowing decentralized key management is already been achieved in different domains today. SBTs are potentially valuable, expressed Edwards, but he also mentioned that he is yet to see a use case where they compete with existing technologies.

Kim Hamilton Duffy (now director of identity and standards at the Centre Consortium), who was interviewed two years ago for a story on decentralized digital credentials, regarding some of the use cases proposed in the Soul paper enunciates that:

It is similar to my thinking and approach when I first started researching blockchain-anchored identity suits with Blockcerts, Duffy also adds, The risks and, correspondingly, initial use cases I carved out restricting to identity claims you’re comfortable being publicly available forever were therefore similar.

The Soul paper glimpses potential strategies to risks and challenges such as: how to manage sensitive data, how to address challenges with key and account recovery, etc.  These solutions are more stringent than they may initially appear. What I found was that these problems required better primitives: VCs and DIDs, noted Duffy.

Weyl, for his part, signified that there was no intent to claim priority with respect to the offered use cases, instead, it was simply to show the power of such technologies. That is, the paper is slightly a manifesto and more of a research plan. He and his associates are happy to pass credit around where credit is due. “The VC community has an important role to play,” as do other technologies, said Weyl. 

A question of trustworthiness

But execution may not be so simple. Requested to comment on the practicality of an enterprise like “soulbound tokens,” Joshua Ellul, associate professor and director of the Centre for Distributed Ledger Technologies at the University of Malta, narrated that The main issues were not technological but, like many parts in this domain, issues of trust.

Once any input is mandated from the outside world like, an academic degree, affiliation, or attestation a query surfaces as to the trustworthiness of that input. “We can raise the levels of reliability of data through decentralized oracles, yet we should confess that that data is still dependent on the collective trustworthiness of those oracles,” said Joshua.

Presume a university is a “Soul” that issues students blockchain-based certificates. People may trust the attestation because they entrust the centralized university that creates its public key public, stated Joshua Ellul, But then others might question, What is the point of storing SBTs on a DLT when the university keeps such control?

Or examining the idea of peer-to-peer work certifications, In general, would a company compliment a peer-to-peer credential given by an individual or institution unknown to the company? Or would they rather just depend on traditional credentials?

Ellul mentions that It’s a concern of shifting the mentality of trust from centralized institutional trust to trusted networks, and that could seize some time to achieve.

What if your private key is lost?

Recovery Model for Soul in Finding Web’s Soul

According to the paper, With such a model, recovering a Soul’s private keys would need a member from a competent majority of a (random subset of) Soul’s communities to consent. These consenting communities could be issuers of certificates, for example, universities, newly observed offline events, the last 20 people you took a picture with or DAOs you partake in, among others. 

The paper also concerns new ways to think about property. According to the authors, The future of property innovation is improbable to build on wholly movable private property. Instead, they debate decomposing property rights, like allowing access to privately or publicly maintained resources such as homes, cars, museums, or parks. 

SBTs could consent to permit rights to a park or even a confidential backyard that is conditional and nontransferable. For instance, I may trust you to enter my backyard and use it recreationally, but that does not indicate that I trust you to sub-license that consent to someone else, states the paper. Such a condition can be effortlessly coded into an SBT but not an NFT, which is movable by its very nature.

A backlash against NFTs?

Speculation is nailing on Buterin’s motivation for attaching his name and superiority to such a paper. Media platforms demonstrated that the Ethereum founder was overreaching or glimpsing the next big thing to stimulate a market rally, but This doesn’t match Vitalik’s distinctive approach, noted Edwards.

Buterin’s stimulation may be as superficial as skimming for another way to support and build Ethereum’s platform dominance. Or, possibly more likely, the impetus could be a backlash against the premise and fraud with NFTs and seeking to redesign them into a technology that changes the world in a positive way, according to Edward.

In any affair, the Soul paper shedding light on decentralized society, or DeSoc, suits a positive service in the idea of Edwards and others, even if SBTs themselves someday turn out to be nonstarters. In general, an individual usually doesn’t require an all-encompassing, ideal solution, just a modification over what already exists, which today is centralized control of someone’s data and online identity.

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