---
title: "Soulbound tokens in governance"
url: "https://caper.network/wiki/dao-governance/concepts/membership/soulbound-tokens"
updated: 2026-09-01
license: CC-BY-4.0
license_url: "https://creativecommons.org/licenses/by/4.0/"
---

# Soulbound tokens in governance

|  |  |
| --- | --- |
| **Topic** | Non-transferable ("soulbound") tokens as a governance primitive – binding a vote, credential, or reputation to an account that cannot sell it |
| **Coined by** | Vitalik Buterin, [“Soulbound”](https://vitalik.eth.limo/general/2022/01/26/soulbound.html) (Jan 2022), after World of Warcraft's soulbound items |
| **Formalised in** | [“Decentralized Society: Finding Web3’s Soul”](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4105763) (Weyl, Ohlhaver & Buterin, 2022) – soulbound tokens (SBTs) |
| **Token standard** | [ERC-5192](https://eips.ethereum.org/EIPS/eip-5192) – Minimal Soulbound NFTs (a `locked()` flag on ERC-721) |
| **Largest live experiment** | Optimism's Citizens' House – four rounds of invitation-based citizenship, then a Season 8 rewrite that replaced invitation with registration |
| **What four years changed** | The badge is no longer permanent (eligibility is recalculated every Season), no longer individual-only (chains and apps hold badges), and no longer issuer-independent (it is revoked and re-issued on request) |
| **Central tension** | Resists vote-buying and Sybils, but relocates the contest to whoever sets the eligibility test |

A **soulbound token** is a token that, once it lands in an account, cannot be transferred or sold – it is bound to that account, or "soul." The term was popularised by Vitalik Buterin's January 2022 essay [Soulbound](https://vitalik.eth.limo/general/2022/01/26/soulbound.html), which borrows it from World of Warcraft, where the best items become soulbound the moment a player picks them up. For a [DAO](/wiki/dao-governance/concepts/fundamentals/what-is-a-dao) the idea cuts to the core of governance design: if the right to govern cannot be bought, then voting power tracks who _earned_ it rather than who can afford it.

Four years of production use have tested that claim, and the largest test – Optimism's Citizens' House – has since rewritten almost every assumption the original design rested on. This page covers why non-transferability matters, the "Decentralized Society" vision that formalised it, the standards and live deployments, what the Optimism record actually shows, the open criticisms, and how [Caper](/wiki/foundations/what-is-a-caper) uses a soulbound vote token.

## Why non-transferability matters for governance

Ordinary governance tokens are freely tradable, which quietly turns governance into a market: whoever values control most can simply buy the votes. Buterin's argument is that for governance rights, [“transferability is counterproductive”](https://vitalik.eth.limo/general/2022/01/26/soulbound.html) – because concentrated interests are the ones most willing to accumulate governance from everyone else, transferable votes flow _toward_ the actors most likely to abuse them. This is the plutocratic failure mode that [token-weighted voting](/wiki/dao-governance/concepts/voting/token-weighted-voting) struggles to escape.

[Vote-escrow (ve) tokenomics](/wiki/dao-governance/concepts/voting/vote-escrow) is a partial answer: locking a token for a fixed term makes the resulting vote weight temporarily non-transferable. But the lock can leak back into a market – Aerodrome's `veAERO` position is itself a transferable NFT, so the "locked" vote acquired a spot price and could be sold outright. Soulbound tokens close that gap by making the credential permanently non-transferable at the token level, not just time-locked.

## Souls, SBTs, and Decentralized Society

The concept was formalised in the 2022 paper [“Decentralized Society: Finding Web3’s Soul”](https://www.radicalxchange.org/updates/papers/desoc.pdf) by Puja Ohlhaver, E. Glen Weyl, and Vitalik Buterin ([SSRN 4105763](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4105763)). Its claim is that Web3 so far encodes only transferable, financialised assets, and that a richer society needs non-transferable **soulbound tokens (SBTs)** to encode the commitments, credentials, and affiliations a "Soul" accumulates over time. Because an SBT cannot be bought or sold, it can carry provenance and reputation that a tradable token cannot.

The paper lists governance applications directly: SBTs enable [Sybil-resistant governance](/wiki/dao-governance/concepts/membership/sybil-resistance-in-daos) (an identity you cannot rent), community-based key recovery, and more honest [quadratic funding](/wiki/dao-governance/concepts/voting/quadratic-voting-and-funding), where matching weight depends on _distinct_ souls rather than distinct wallets. In each case the point is the same: non-transferability lets a token stand for _who you are and what you have done_, not merely what you hold.

## Standards and live deployments

The minimal on-chain standard is [ERC-5192](https://eips.ethereum.org/EIPS/eip-5192), which extends ERC-721 with a single `locked()` view and an EIP-165 interface flag so a wallet or marketplace can tell a token is non-transferable. Several DAOs run soulbound credentials in production:

- **Optimism's Citizens' House.** The Collective's second chamber votes one member, one vote, and its membership badge is non-transferable – so holders who accumulate `OP` gain nothing in this house beyond the single badge, a deliberate check the [Token House](/wiki/dao-governance/concepts/voting/token-weighted-voting) cannot provide. Its powers now run wider than [retroactive public-goods funding](/wiki/dao-governance/concepts/treasury/retroactive-public-goods-funding): Optimism's own FAQ lists approval of the Collective Intent, veto power over protocol upgrades, and [election of representatives to the Developer Advisory Board](https://github.com/ethereum-optimism/community-hub/blob/main/pages/citizens-house/faq-citizenship.mdx). How that badge is handed out has changed completely – see the next section.
- **[Human Passport](/wiki/dao-governance/tooling/membership/human-passport) (formerly Gitcoin Passport).** A [stamp-aggregation credential](https://passport.human.tech/) that combines many weak identity signals into a single Sybil-resistance score, used to gate quadratic funding rounds without any one identity provider being decisive. It is now one of the two proof-of-personhood options Optimism accepts from prospective Citizens.
- **Non-transferable vote-locks.** Curve's `veCRV` lock is non-transferable by design – the closest ve-era ancestor of the soulbound idea – even though later forks re-financialised the position (see [vote-escrow](/wiki/dao-governance/concepts/voting/vote-escrow)).

## The model after four years: what the Optimism record shows

Optimism has run the largest and best-documented soulbound governance experiment in production, and it publishes its own post-mortems. The arc is not the one the 2022 papers projected.

### The invitation phase

Citizenship began as a trust graph. Optimism's history of the House records that [Round 1 began with “24 participants selected by the Optimism Foundation,” Round 2 expanded “to 71 participants, with existing Citizens inviting new members,” and Round 3 grew “to 146 participants through continued invitation”](https://github.com/ethereum-optimism/community-hub/blob/main/pages/citizens-house/experimentation-with-citizenship.mdx). Citizens were chosen, in the Foundation's own framing, "because they were most likely to meet these goals—rather than because they held an intrinsic right to representation."

### The finding that undercut it

Round 6 tested the trust graph against a control. The Foundation reports that [“no significant differences were found between badgeholders (selected via the web-of-trust model) and a random community sample”](https://github.com/ethereum-optimism/community-hub/blob/main/pages/citizens-house/experimentation-with-citizenship.mdx), and that both groups "tended to represent an 'enthusiast' persona—those with time and interest in governance who weren't necessarily Superchain stakeholders." On the dimensions Optimism measured, an invitation graph built out of soulbound credentials selected the same kind of person a lottery would have. Round 5 had already found something adjacent: expertise improved answers to "which projects are most useful?" but not to value-laden questions about what the Collective should prioritise.

### Season 8: registration replaces invitation

The House was then rebuilt around eligibility rather than referral. Three classes of Citizen now register directly, and the criteria are published:

- **Chains** qualify if they [“account for at least 2% of the total revenue share contributed by all chains over the past Season, or are among the top 15 chains by revenue contribution in the past Season”](https://github.com/ethereum-optimism/community-hub/blob/main/pages/citizens-house/faq-citizenship.mdx). One person registers and votes on behalf of the chain.
- **Onchain applications** register through an admin of the project in Optimism's Atlas registry. An organisation holding both an eligible chain and an eligible app receives one badge, not two.
- **Superchain end-users** must meet an activity requirement and [“verify proof of personhood through either Passport or World id”](https://github.com/ethereum-optimism/community-hub/blob/main/pages/citizens-house/citizenship-selection.mdx) – and [“registration is limited to the first 1000 Citizens”](https://github.com/ethereum-optimism/community-hub/blob/main/pages/citizens-house/citizenship-selection.mdx).

Optimism also removed the incentive: [“There will be no financial rewards or incentives for being a Citizen or voting in Season 8 and beyond”](https://github.com/ethereum-optimism/community-hub/blob/main/pages/citizens-house/citizenship-selection.mdx).

### Two properties the 2022 model assumed, now gone

**Permanence.** [“Citizenship eligibility is recalculated at the beginning of every Season, and criteria are subject to change”](https://github.com/ethereum-optimism/community-hub/blob/main/pages/citizens-house/citizenship-selection.mdx); the FAQ puts it plainly – [“Being a Citizen now doesn't guarantee future Citizens' House membership”](https://github.com/ethereum-optimism/community-hub/blob/main/pages/citizens-house/faq-citizenship.mdx). A soul that expires every season is a subscription, not a soul.

**Issuer independence.** [“If you change your governance wallet after receiving the Citizen badge, the badge will be automatically revoked and re-issued to the new wallet”](https://github.com/ethereum-optimism/community-hub/blob/main/pages/citizens-house/citizenship-selection.mdx). That one sentence dissolves the key-loss problem the DeSoc paper worried about, and it does so by conceding the point the same paper flagged as the hard one: the issuer can revoke and re-mint at will. Non-transferability binds the holder. It does not bind the issuer.

### Where the money went

Non-transferability keeps a credential off the secondary market. It says nothing about the primary one. A chain earns a seat in a one-member-one-vote house by contributing at least 2% of Superchain revenue share, or by ranking in the top fifteen on the same measure. Nobody can buy the badge from a holder; eligibility for it is denominated in revenue.

That is the general lesson for any DAO reaching for soulbound governance, and it is not an argument against it. Making a credential non-transferable genuinely closes the resale market, which is where the crudest [vote-buying](/wiki/dao-governance/concepts/voting/vote-markets) lives. What it cannot do is remove the contest – it moves the contest to whatever test the issuer uses to decide who qualifies. Design the eligibility test with the same suspicion you would apply to a token distribution, because it is one.

## Criticisms and open problems

Soulbound governance is not a free lunch, and the DeSoc authors flag most of the tensions themselves. Four years of deployment have moved several of them from theory to record:

- **Privacy.** A public, permanent record of the affiliations and votes bound to an account leaks exactly the kind of profile people may not want on-chain. The proposed answer is zero-knowledge proofs over private SBTs, which is still largely research rather than deployed practice. See [private and shielded voting](/wiki/dao-governance/concepts/voting/private-and-shielded-voting).
- **Key loss and recovery.** If a soul cannot be moved, a compromised or lost key cannot be escaped by transferring out. DeSoc's answer is community recovery. Optimism's answer, in production, is simpler and more revealing: the issuer revokes the badge and re-issues it to the new wallet.
- **"Who issues souls?"** Any issuer that gates a soulbound credential becomes a power centre. This is no longer a hypothetical objection – Season 8 citizenship is granted, recalculated, revoked and re-issued by one foundation against criteria it publishes and may change.
- **Reputation is not judgment.** An earned, non-transferable record can ossify – it rewards past participation, which is not the same as being right about the next decision. Optimism's own Round 6 comparison found its earned badgeholder set statistically indistinguishable from a random sample of the community.

## How Caper approaches this

Caper mints a soulbound [vote token](/wiki/governance/voting) as the on-chain record of participation. In the contract it is a `DIVISIBILITY_MAXIMUM` resource – fractional, because it accrues at a per-XRD rate on trades as well as in whole units on ballots – described in its own metadata as a “Soulbound stake token… Drives exit redemption,” and minted one per ballot cast and 0.01 per XRD of gross trade value on each leg of a trade. It is non-transferable by construction: the token's `depositor` role is restricted to the DAO component itself (`global_caller`), with the updater set to `deny_all`, so a holder can never deposit one into another account. A holder may only withdraw the token to burn it and redeem – there is no peer-to-peer path, and nothing to buy or sell.

Crucially, that soulbound record is _not_ the whole story – Caper is not "your bag doesn't count." Vote weight is the product of a member's held governance tokens and their earned votes, normalised by the totals in circulation: weight is `(held × votes) / (supply × circulation)`. The earned vote count is a _multiplicative factor_ alongside stake, so a bag that arrived without a record — transferred in rather than bought on the curve — cannot capture control at all (its factor is zero), while a long voting history with no stake carries none either. The record itself is untransferable rather than unobtainable: it is minted 1 per ballot cast and 0.01 per XRD of gross trade value, to the account that did the thing, and no holder can hand theirs to another. The same weight sets each member's pro-rata [exit](/wiki/foundations/leaving-a-caper) claim on the treasury, and the vote tokens are burned as they are spent. The result is the property soulbound tokens are reached for in the first place: the decisive part of who governs is _minted to you and only you_ – acquirable by anyone at a published rate, transferable to nobody – without discarding the stake that keeps skin in the game. See [voting mechanisms](/wiki/governance/voting-mechanisms) for the full weighting model.

The eligibility question the Optimism record raises has a narrow answer here, and it is worth stating rather than claiming more: a caper's vote tokens are minted to the account that acts – one per ranked ballot cast, and 0.01 per XRD of gross value on each leg of a trade – so the only test for acquiring one is having transacted with the caper yourself. There is no committee, no season, and no revocation path – but equally, no proof of personhood, so a caper's soulbound record is Sybil-resistant only to the extent that holding tokens and paying fees is.

## References

- [Vitalik Buterin – Soulbound (2022)](https://vitalik.eth.limo/general/2022/01/26/soulbound.html)
- [Ohlhaver, Weyl & Buterin – Decentralized Society: Finding Web3's Soul (SSRN, 2022)](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4105763) · [PDF](https://www.radicalxchange.org/updates/papers/desoc.pdf)
- [ERC-5192: Minimal Soulbound NFTs](https://eips.ethereum.org/EIPS/eip-5192)
- [Optimism Community Hub – Experimentation with Citizenship (source)](https://github.com/ethereum-optimism/community-hub/blob/main/pages/citizens-house/experimentation-with-citizenship.mdx)
- [Optimism Community Hub – Becoming a Citizen (source)](https://github.com/ethereum-optimism/community-hub/blob/main/pages/citizens-house/citizenship-selection.mdx)
- [Optimism Community Hub – Citizen FAQ (source)](https://github.com/ethereum-optimism/community-hub/blob/main/pages/citizens-house/faq-citizenship.mdx)
- [Optimism Docs – Governance FAQ](https://docs.optimism.io/governance/gov-faq)

_A note on the Optimism citations._ The handbook that used to live at `community.optimism.io/citizens-house/…` has been folded into `docs.optimism.io`, and every old path in that subtree now returns HTTP 200 while serving the same unrelated protocol-upgrades page. Those URLs look alive to any link checker and are not. This page therefore cites the handbook's source files in Optimism's `community-hub` repository, which are canonical and resolve correctly. Read 11 August 2026.