Cryptocurrency exchange Binance is moving towards decentralized identity tools by launching its first token designed to certify a verified user’s status on the platform.
Binance on Monday announced the launch of the Binance Account Bound (BAB) token, which aims to address identity issues in the decentralized society (DeSoc).
Unlike traditional crypto assets like Bitcoin (BTC), the BAB token is introduced 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-funded tokens designed for DeSoc.
According to Binance’s announcement, the BAB token is the first SBT issued on the BNB Smart Chain. The token is targeted at many different use cases on the DeSoc, but will initially only serve as a Binance Know Your Customer (KYC) user credential.
The BAB token will be specifically displayed on wallets to indicate that the wallet 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 preventing bots, airdropping non-fungible tokens, voting and others, Binance said.
“As DeSoc use cases evolve, Binance may issue other types of BAB tokens in the future”says the ad.
The BAB token is being introduced as a pilot project and will only be accessible through the Binance mobile app, allowing KYC-enabled Binance users to mint their BAB directly into their Binance wallets.
The CEO of Binance, Changpeng Zhao noted that SBTs will play an important role in how Web3 credentials will work on a DeSocstating:
“This will transform the way 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 collaborate with the community to work on new use cases for the BAB token to “develop this revolutionary vision of decentralized society.”
The new token launches amid online reports claiming that cryptocurrency exchange Binance has lost up to 90% of its customers and billions of dollars after adopting mandatory KYC verification in August 2021.. Binance did not immediately respond to Cointelegraph’s request for comment.
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