Masa Finance has launched the primary soulbound identification protocol for the Ethereum mainnet, in keeping with a Jan. 17 press launch shared with Cointelegraph. The protocol will enable for standardized soulbound tokens to be minted on Ethereum for Know Your Buyer verification, credit score scores and different use circumstances.
Soulbound tokens are tokens that can not be transferred from one pockets to a different. The idea was popularized through a weblog put up from Vitalik Buterin, who argued that these tokens may very well be used to suggest governance rights for decentralized finance (DeFi) protocols or to show that an individual has attended an occasion.
Talking to Cointelegraph, Masa Finance founders Brendan Playford and Calanthis Mei argued that soulbound tokens will increase alternatives for DeFi customers to construct credit score and get loans. Mei defined it as such:
“We need to assist individuals faucet into [an] on-chain credit score system with a Web3 credit score rating, with the info sources that now we have aggregated throughout Web2 and Web3 representing and serving to individuals construct their creditworthiness on-chain. We’re presently working with a number of lending companions in extending DeFi loans to these people who’ve minted a Masa credit score rating report.”
She emphasised that Masa soulbound tokens should not merely connected to a conventional credit score rating. The protocol goes past conventional finance to include each Web2 and Web3 exercise. Mei stated that over 10,000 information factors are utilized in a Masa credit score rating, together with a consumer’s FICO rating, Plaid transaction information for credit score and debit playing cards, Web3 pockets transaction historical past, centralized trade balances, and different information.
Mei believes this technique will result in “risk-based underwriting” in DeFi, which she says has beforehand not been potential as a result of lack of identification protocols on blockchain networks.
The founders additionally stated there are two different use circumstances presently obtainable for the protocol. Except for representing a credit score rating, the second use case for the protocol is .soul domains. These are just like ENS names, however with the additional advantage that they are often linked to numerous Masa identification traits. Playford defined that “customers can hyperlink totally different attributes, use their pseudonym to confirm themselves, present that they’re verified in Web3 with out doxing [their] full title, for instance.”
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Playford famous that .sol domains might be transferred from one pockets to a different. Nevertheless, the attributes related to them will grow to be unattached if the area is moved. Subsequently, customers can’t “purchase” the identification or credit score rating of one other individual.
In line with the founders, the third use case is identification verification, a function the corporate has launched underneath the title “Masa Inexperienced.” It permits customers to mint a Masa Inexperienced token to show their identification, which the corporate believes will assist customers to show they’re actual people, not bots. In line with Mei, this can assist to get rid of bots in play-to-earn video games and different apps the place the neighborhood desires solely actual people to take part.
Masa just isn’t the one soulbound token protocol to be carried out on a blockchain community. Binance has launched its personal model, referred to as BAB, which can be utilized to show a consumer’s identification. Nevertheless, BAB is presently solely obtainable on BNB Chain. Masa seems to be the primary cross-chain soulbound token protocol obtainable on Ethereum and Celo.