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Masa Finance launches the soulbound Web3 identity protocol for Ethereum

Masa Finance launches the soulbound Web3 identity protocol for Ethereum

According to a press release shared on January 17, Masa Finance has created the first “soulbound” identity system for the Ethereum mainnet. The protocol will enable the issuance of standard-issued soulbound tokens on Ethereum for Know Your Customer authentication, credit scoring, and other use cases. 

Tokens that are soulbound cannot be moved from one wallet to another. The notion was popularised by Vitalik Buterin’s blog article, in which he suggested that these tokens may be used to represent governance rights for decentralised finance (DeFi) protocols or to establish that a person attended an event. 

Masa Finance founders Brendan Playford and Calanthis Mei told Cointelegraph that soulbound tokens will enhance options for DeFi users to develop credit and receive loans. Mei explained it this way:

We want to let people tap into an on-chain credit system with a Web3 credit score, using data sources gathered from Web2 and Web3 to represent and assist them in building their creditworthiness on-chain. We are currently collaborating with a number of lending partners to provide DeFi loans to individuals who have obtained a Masa credit score report.

Masa soulbound tokens, she noted, are not simply linked to a regular credit score. Beyond traditional finance, the protocol incorporates both Web2 and Web3 activities. Mei stated that a Masa credit score incorporates approximately 10,000 data elements, including a user’s FICO score, Plaid transaction data for credit and debit cards, Web3 wallet transaction history, centralised exchange balances, and other information. 

Mei believes that this method will enable “risk-based underwriting” in DeFi, which she claims was previously impossible due to blockchain networks’ lack of identity protocols.

The protocol currently has one other use case, according to the inventors. Aside from providing a credit score, the protocol’s second use case is soul domain names. These are comparable to ENS names but have the added benefit of being associated with other Masa identification qualities. “Users may link different attributes, utilise their pseudonym to validate themselves, and indicate that they’re verified in Web3 without disclosing [their] complete name, for example,” Playford noted wo 80 / ch 501. Sol domain names, according to Playford, can be transferred from one wallet to another. However, if the domain is relocated, the attributes linked to it will become detached. As a result, people cannot “purchase” another person’s identity or credit score. 

A third use case, according to the founders, will be identity verification, a function the company is offering under the name “Masa Green.” It would enable users to create a Masa Green token to establish their identity, which the business says will assist users in proving they are genuine humans, not bots. According to Mei, this will aid in the removal of bots from play-to-earn games and other apps where the community prefers only genuine individuals to engage. Masa Green will be available as a “quick follow” within the next few weeks, according to the business.

Masa is not the only soulbound token technology that has been deployed on a blockchain network. Binance has created its own version, known as BAB, that may be used to verify a user’s identity. BAB, on the other hand, is now exclusively available on the BNB Chain. Masa appears to be Ethereum’s first “soulbound” token system.

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