Buterin has quite the history with World of Warcraft. After Blizzard nerfed the Siphon's Lock spell, he said: "I cried myself to sleep, and on that day I realized what horrors centralized services can bring. I soon decided to quit."
However, his new idea is more inspired by the game, rather than a reaction to it. Buterin outlined how the concept of Soulbound cards helped him shape the idea of non-transferable NFTs, laying special emphasis on the idea that these NFTs cannot be sold or detached from their owners.
Soulbound And Non-Transferable NFTs
Buterin emphasized the World of Warcraft jargon called "soulbound", a concept in the game that allows players to own items in all exclusivity, prohibiting their sale or separating them from their original owners. Buterin later underlined the concept of soulbound in the NFT space, commenting:
While transferable NFTs have their place and can be valuable on their own for supporting artists and charities, there is also a large and underexplored design space of what non-transferable NFTs could become.
Buterin later discussed an element of social signalling. He suggested that current NFTs offer social signalling value which makes the users acquire them to signal aspects of wealth.
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"What if we want to create NFTs that are not just about who has the most money, and that try to signal something else?" he asked.
Moving away from the Soulbound concept, Buterin described the idea as POAP or proof of attendance protocol. This standard would assist projects in sending NFTs that "represent the idea that the recipient personally participated in some event."
He further added:
POAP is an excellent example of an NFT that works better if it could be soulbound. If someone is looking at your POAP, they are not interested in whether or not you paid someone who attended some event. They are interested in whether or not you attend that event.
He later discussed another prominent use case highlighting the problem associated with transferable governance tokens.
If you take the proverb that "those who most want to rule people are those least suited to do it" seriously, then you should be suspicious of transferability, precisely because transferability makes governance power away from the meek who are most likely to provide valuable input to governance and toward the power-hungry who are most likely to cause problems.
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Buterin in his blog post further reiterated how these governance tokens can be Soulbound by giving the example of City DAO. He also stated that governance tokens being Soulbound would limit governing power in the hands of wrong people and allow voting power "more voting power goes to the people who live in the city."
Buterin was also concerned about the privacy of soulbound items highlighting that it would take considerable technological advances to ensure that the person's on-chain data does not get publicly mapped. He later added a solution noting the use of zk-SNARKs to counter the issue of privacy leaks.