Upgradable Soulbound tokens: Best solution for Web3 reputation
SBT meaning
"Soulbound tokens" or "SBT" primarily refers to non-transferable non-fungible tokens (NFTs) in blockchain ecosystems, designed to represent permanent aspects of identity, achievements, credentials, or reputation that can’t be sold or transferred. The concept, inspired by World of Warcraft's "soulbound" items, was popularized in a 2022 whitepaper co-authored by Ethereum's Vitalik Buterin, proposing SBTs for a "Decentralized Society" (DeSoc) to encode trust and social relationships.
The main feature of SBT is non-transferability, and it was implemented in the Envelop protocol as one of the settings for programmable assets even before Buterin's article was published and the term “Soulbound token” appeared.
By combining non-transferability and collaterization settings, Envelop came up with the idea of upgradable SBTs.
How do upgradable soulbound tokens work
Upgradable SBT — confirmation of reputation, skill or quality. Envelop offers the ability to upgrade the reputation inside SBT via dropping reputation tokens (ERC-20 format) inside, when the SBT holder has achieved or executed some useful activity for his community. Thus anyone can easily build dynamic reputational models with on-chain proof. Valuable for any services to easilier interaction with the community.
A special term was made for GameFi - skill tokens.
Skill tokens — tokenization of skills of ingame NFTs through placement of any ERC-20 token inside wNFTs (ERC-721/1155) which can perform as power, speed, armor, attack, defense etc. Players will be able to buy or achieve skills and upgrade assets. When the game is finished if the game asset is damaged some skills could be reduced and players will need to refill missing skills to insure appropriate performance.
Comparison of SBT and upgradable SBT
Value proposition
Custodian services: additional security layer: check wallet -> check SBT -> check amount of random tokens inside SBT -> access to crypto granted
Incubators, Accelerators, Educational centers: tokenized diplomas with tokenized grades in disciplines inside
Syndicates, DAOs, Wallets: personal identity for investors/participants quality of their activities (hodl, sale)
Bloggers: reward identity tool for the community
Event organizers, Sports, Fan: tokenized personal upgradable loyalty program and ticket pass for the fast track
Metaverse, GameFi: tokenized personal upgradable id of in game experience stored in the blockchain
HR: suitable for HR as a proof of skill and achievements
Games:
new approach for long term revenue stream when traits can be salt by the games as ERC-20 tokens
new level of on-chain tokenization to provide maximum transparency to the community
quantity improvement of user base and attracting new gamers buy dropping ingame NFTs for free and just selling them skills
Players: own all ingame items and trade of traits/skills on the blockchain level
P2E Market: additional velocity and volume of the skills trading
Soulbound tokens examples
How skill tokens unlock the potential of gaming items
Envelop revolutionizes game assets by integrating skill tokens—either replacing traditional traits or combining them—to make customization deeper and gameplay truly exhilarating. Game developers can fine-tune every ability: each skill is a dedicated token (power, speed, armor, attack, and more) that slots seamlessly into a wNFT’s collateral.
Players gain unprecedented agency: hunt, buy, or earn skills to upgrade their gear on the fly. When the battle ends and an asset takes damage, affected skills degrade—creating urgent, meaningful decisions as players restore lost power to stay competitive.
Comparison of centralised games based on NFT (or SBT) and with tokenized skills.
This skill-token model hands developers a breakthrough in on-chain tokenomics: total transparency, fresh monetization paths, and radical flexibility. Imagine launching NFTs for free and monetizing exclusively through skill sales—skyrocketing user acquisition and pulling in waves of new gamers hungry for real progression.
How Upgradable SoulBound Tokens build Transactional Reputation That Grows With You
Upgradable SoulBound Tokens (SBTs) are your unbreakable, on-chain proof of reputation and skill—permanently tied to your wallet, yet endlessly evolving.
Envelop turns static SBTs into living reputations. Whenever you deliver real value to your community—complete a quest, ship code, mentor newcomers, or close a deal—you earn reputation-grade tokens (ERC-20). Drop them straight into your SBT’s collateral and watch your status level up in real time, fully transparent and verifiable on-chain.
By tokenizing various skills of community members, such as expertise in development, tokenomics, and marketing, DAO gains an incredibly flexible tool for evaluating the contribution of any participant to growth.
Imagine fan badges that actually reflect your dedication, diplomas that update with every new certification, or professional credentials that rise from “Junior” to “Legend” as you stack proven achievements. No more outdated PDFs or forgotten Discord roles—your reputation breathes, grows, and travels with you across every protocol.
Dynamic, tamper-proof, and instantly recognizable: Envelop’s upgradable SBTs are the future of trust in Web3.
Soul bound tokens (SBT)
Boost Engagement and Build Trust with Soul Bound Tokens (SBTs) Our SBT product offers a powerful way to enhance community engagement by creating unique, non-transferable rewards that recognize participation and contributions. By integrating SBTs, you can establish a trusted reputation system within your ecosystem, encouraging long-term loyalty and active involvement from your community members.
Key Features
Non-Transferable Rewards
SBTs are permanently bound to the holder’s wallet, ensuring that each achievement and contribution remains uniquely tied to the individual, fostering a strong sense of authenticity and ownership.
Reputation System
Leverage SBTs to create a transparent and trustworthy reputation system, rewarding active members and supporters by showcasing their contributions and achievements.
Customizable Incentives
Tailor SBTs to suit the unique needs of your project, offering badges, ranks, or exclusive privileges that incentivize ongoing engagement and participation.
Enhanced Community Loyalty
By recognizing and rewarding contributions, SBTs help you build a more loyal and engaged community, driving long-term commitment and growth for your project.
Gamification Opportunities
Gamify your ecosystem by integrating SBTs into quests, challenges, and achievements, driving continuous engagement and excitement.
