Binance cryptocurrency exchange is moving towards decentralized identity tools by launching its first-ever token designed to certify verified user status on the platform.
Binance on Monday announced the launch of the Binance Account Bound (BAB) token, aiming to address identity issues in the decentralized society (DeSoc).
In contrast to traditional crypto assets like Bitcoin (BTC), the BAB token is exclusively for online identification purposes and belongs to a type of Soulbound Tokens (SBT). Proposed by Ethereum creator Vitalik Buterin, SBTs are non-transferable, non-financialized tokens designed for DeSoc.
According to the announcement by Binance, the BAB token is the first-ever SBT issued on the BNB Smart Chain. The token is aimed at many different use cases in the DeSoc but will initiall serve as Binance Know Your Customer (KYC) user credentials.
The BAB token will specifically be displayed on wallets to indicate the wallet’s owner has passed KYC verification on Binance. The token will function as a Binance identity and can be used by third-party protocols to verify BAB tokens for a variety of purposes, including avoiding bots, airdropping nonfungible tokens, voting and others, Binance said.
“There was previously no method to identify Binance users or Binance KYC users on the BNB Chain,” a spokesperson for Binance told Cointelegraph. According to the representative, the BAB token can be viewed as a social identity on the BNB Chain, granting users access to specific BNB Chain perks including airdrops.
“As DeSoc use cases evolve, Binance may issue other types of BAB tokens in the future,” the announcement notes.
The BAB token is introduced as a pilot project and will only be accessible via the Binance mobile app, allowing KYCed Binance users to mint their BAB directly on their Binance wallets.
Binance CEO Changpeng Zhao pointed out that SBTs will play an important role in the way Web3 credentials will work in a DeSoc, stating:
“This will transform how we connect, as blockchain technology will give society greater authority to determine how communities interact based on their credentials or affiliations.”
The CEO added that Binance will be collaborating with the community to work on new use cases for the BAB token to “develop this revolutionary vision of decentralized society.”
The new token is launched amid online reports claiming that the Binance crypto exchange has lost up to 90% of its customers and billions of dollars after adopting obligatory KYC verification in August 2021. Binance CEO subsequently took to Twitter to deny the reports, referring to headlines as a “complete mis-quote.”