Soulbound Token (SBT)
A non-transferable token that remains permanently attached to a specific wallet address, conceptualized by Vitalik Buterin. SBTs are designed to represent identity, achievements, credentials, and reputation that shouldn't be tradeable or transferable. They enable on-chain identity systems where trust is built on verifiable, permanent records rather than transferable assets.
“A university could issue soulbound tokens as digital diplomas that permanently prove educational credentials without being sellable or transferable. A DeFi protocol might issue SBTs to signify a user's on-chain reputation or participation history.”
NFT (Non-Fungible Token)
A unique digital token on a blockchain that represents ownership of a specific item — such as art, music, collectibles, virtual real estate, or in-game items. Unlike fungible tokens like BTC or USDC where each unit is identical, each NFT has a unique identifier making it one-of-a-kind. NFTs typically follow the ERC-721 or ERC-1155 token standard and store metadata pointing to the associated content.
Decentralized Identity (DID)
A self-sovereign digital identity system built on blockchain technology where individuals own and control their personal data and credentials without relying on centralized authorities like governments or corporations. DIDs use cryptographic proofs to verify claims (age, qualifications, membership) without revealing unnecessary personal information, enhancing both privacy and security.
Verifiable Credential
A tamper-evident, cryptographically signed digital claim about a subject (person, organization, or thing) that can be verified by anyone without contacting the original issuer. In blockchain contexts, verifiable credentials are used alongside decentralized identifiers (DIDs) to enable privacy-preserving identity verification — proving specific attributes (age, qualifications, memberships) without revealing unnecessary personal information.
Token
A digital asset created on an existing blockchain rather than its own native chain. Tokens can represent a wide range of assets and utilities — from currency and governance rights to real-world assets and collectibles. Unlike coins (BTC, ETH) which are native to their blockchain, tokens are created using smart contracts on platforms like Ethereum (ERC-20, ERC-721).