Non-Transferable Tokens are a slight upgrade to Non-Fungible Tokens (NFTs), but how much of an upgrade are we talking about? The world of Blockchain and Crypto is always evolving with new tech, and developers are trying to provide a solution for every problem faced in this industry.
When discussing NFTs, almost every crypto investor knows about the scams and low security. From false authentications to NFT exchange hacks, things have always been in the red zone, especially in 2022.
This guide will cover what Non-Transferable Tokens (NTT) are and how they can revolutionize digital assets. We will also discuss the importance of untransferable tokens and whether there are any advantages of NTTs.
If you’re curious about the NTT mechanism and what it means for the future of NFTs, read along.
What is Non-Transferable Token in Crypto?
As the name suggests, NTTs are non-transferable tokens that work as an identity symbol in the crypto and decentralized world. NTTs are also an upgrade to conventional NFTs with one main difference; transferability.
Unlike NFTs, where users can transfer them, NTTs cannot be transferred. Another name for NTTs is “Soulbound Tokens” (SBTs) because they are attached to a wallet forever. As the SBTs are created, they are the most credible and trustable form of NFTs on the Web3 network.
NTTs carry details about the ownership of a digital asset and would protect the data of any Web3 project without ever getting hacked or transferred. The details include the owner’s membership, credentials, certification, etc.
In the Web3 community, NTTs or SBTs are considered a CV for digital asset investors. It can also serve as proof of attendance protocol (POAP) because users cannot trade their social status on the Web3 network nor get hacked by anyone.
So let’s talk about how NTTs work and their importance in Web3 networks.
How NTTs Work
Many people wonder how NTTs are different from NFTs. Soulbound or NTT mechanism is similar to NFTs except for the transferability aspect. Only specific souls or Blockchain wallets can issue NTTs and also make self-certified tokens.
NTTs are only transacted in the one-way direction, where the SBT creators can only issue a token to the address of another soul located somewhere. Since NTTs are verified using available verification of the SBT, issuers, and the receiver, they’re unavailable in every marketplace.
However, due to untransferable NTTs, they are generally more secure and less prone to theft on the Web3 network.
Advantages of NTTs
Being the latest version of NFTs, NTTs have several advantages compared to them. The biggest problem with NFTs is trust issues which NTTs solve. The trust factor makes them a great evolution of NFTs since NFTs have been prone to many scams.
NTTs will become a major trusting point for stakeholders, business owners, and crypto investors. Moreover, unlike NFTs that can be transferred, NTTs verify a digital asset and confirm the owner’s reputation, solving the biggest problem with NFTs.
All Web3 users can check out the history of the person they are about to deal with. The transparency makes it much more secure and makes doing business easier. Another big advantage of NTTs is that they can verify the work experience of users along with all the information of a certain user on the decentralized network.
These benefits make it easier for NFT users to do transactions over the web. So let’s talk about some of the used cases of NTTs.
Used Cases of NTTs
The beauty of NTTs is that their used cases can be applied across the decentralized space. But since it is still a prototype, it’s a long time since it gets recognized by Web3 users and normalized.
Moreover, NTTs are still very unknown to even the crypto audience because it’s mainly a paper idea. But here are some of the used cases of NTTs that we might see in the future:
1. Verification of Ownership: NTTs would be key to tracking the originality of NFTs.
2. Soulbound Token: SBTs will become a key of DeFi transactions, making them easier and simpler.
3. NTTs AirDrops: NTTs would also aid Airdrops in benefitting the general audience without being hoarded by crypto whales.
NTTs are still unknown to most of the blockchain and crypto audience. The SBT mechanism aids NTTs in becoming a more secure version of NFTs. We can see several benefits to NTTs getting normalized in the future. However, the main benefit is that it solves all the trust issues pegged to today’s NFT world.