ESBT (El Soul Bond Token) - An automated incentivisation mechanism for all users to enjoy.

By El Dorado Exchange | El Dorado Exchange | 19 Sep 2022

Introduction

After Vitalik Buterin revealed a whitepaper “Decentralized Society: Finding Web3’s Soul”. There has been some discussion about so-called “Soulbound Tokens” (SBTs) within the crypto space.

SBTs build upon the concept of NFTs by removing the transferability element that characterizes today’s ERC-721 smart contracts. The idea stems from the video game World of Warcraft, where some items can be “Soulbound” — e.g., players cannot sell or trade the items.

Vitalik Buterin and his team picked up that idea and brought it to the NFT space. Since their paper was first published in May, we saw how the concept has slowly gained attention and adoption.

Rather than wait around and follow the trend, we have decided to incorporate our own soulbound token into the El Dorado Exchange (EDE) ecosystem.

Introducing the El Soul Bound Token!

What is El Soul Bound Token?

El Soul Bound Token (ESBT) is your doorway into the El Dorado ecosystem and acts as a membership system for all users to take part in. ESBT aims to solve the user loyalty problem of decentralized trading platforms, providing EDE users with digital verification tools to maintain loyalty by automatically executing rewards and other incentivisation mechanisms.

We are also considering becoming compatible with the Binance BAB token, enabling many new allies to be integrated into our ecosystem.

What ESBT solves for EDE?

If we try to compare Web3 Dapps with existing mature applications in the Web2 world, we find that Dapps have no system that benefits users, at least not through smart contracts, DAOs still depend on Web2 applications like Discord and Twitter to manage the community.

Web3 is designed as a decentralized system to manage the ownership and governance of the Web3 project and its communities. The governance model is based on how many tokens a member holds, and this makes it become vulnerable to malicious acts if the voting power can be transferable, which means:

Voting rights can be sold or transferred, making governance rights more centralized and easier to manipulate.
Transferability can lead to a change in governance from the capable to the incompetent but determined.

Therefore, making the voting power non-transferable is critical. ESBTs can be an alternative for DAO voting. As opposed to the current governance model, ESBTs assign voting power based on community and product interactions, rather than the number of tokens held. This makes the voting power non-transferable.

ESBTs also solves the problem of non-automated incentivisation as rather than rewarding on a manual system, the smart contract can be coded to give out rewards on a predetermined basis. For example, leveling up to a level 4 ESBT yields more voting power, lesser trading fees, and airdropped rewards at the end of an epoch in comparison to someone without an ESBT.

In addition to potential monetary and DAO governance benefits the ESBT provides, it also enables the user to show off their social standing within this community as higher levels of ESBT results in a greater uniqueness of their ESBT avatar (further details are explained within the graphics design section).

Our ESBT are the keys to building EDE’s identity and trust systems. Compared with the top-down trust system, the ESBT system is built from the bottom-up and is centered around a community driven incentivisation model. ESBT fosters growth and trust between users & EDE by ensuring loyalty with the protocol is rewarded and incentivised through this decentralized mechanism that our ESBT provides.

ESBT Design

The ESBT token is non-transferable, has no monetary value, and is originally issued on the BNB Chain. It records the user’s contribution to the platform in the form of points.

Design of our ESBT

As each user who uses our protocol is unique, so too must their representation in our ecosystem. We have solved this by enabling design elements for each users’ ESBT. Each level of the ESBT token has a different classification, being Bronze, Silver, Gold, Platinum, Emerald, Diamond, and Master.

The avatar of the ESBT would be a user defined experience, being that it is customizable and would be not only a soulbound token, but a user defined unique representation of their journey with the EDE protocol.

There are a total of 7 different levels for ESBT, each level will have a corresponding decorative box.

We will gradually add the features to let users design their ESBT identity by themselves. Such as providing rich decorations for users to design their own graphics, and even letting users design their own decorations to have their unique ESBT graphic.

ESBT Levels

One of the aims of ESBT is to show the user’s identity in the EDE ecosystem. Users with more contributions will get more points which corresponds to higher ESBT levels. The higher the level, the lower trading fees will be for that user, as well as they will share a higher amount of the airdropped alphaEDE tokens (with 180 days vesting period), and finally will be given a higher voting weight multiplier to their staked governance tokens.

ESBT levels are dynamically adjusted monthly(an epoch) based on points. What we mean by this is simple, points are not a perpetual system but rather a system that requires continuous contribution to the ecosystem. Each month, a slight depreciation of points will occur, roughly 10%.

Points

Points are mainly used to measure the contribution of users to the EDE platform and community. Users could receive points by being a Trader, an ELP minter, a gEDE holder, or joining the EDE Guide Rebate program to be a referrer.

As we want traders to be encouraged to use the EDE platform, we will be rewarding traders significantly more than other users within our ecosystem. More information to come regarding the points distribution system.

Potential Opportunities for ESBT

What can we expect from utilizing ESBTs in the EDE Ecosystem?

EDE can implement non-transferable NFTs to practice
Record all on-chain and off-chain behaviors and complete the EDE user identity system.
Proof-of-Reputation system, which will accelerate the progress of decentralized Non-collateralized lending and Social trading.
Collaborate with centralized exchanges, such as Binance BAB, or traditional identity companies to build a KYC privacy system
Support multi-chain identity and authentication service
Make EDE community management smarter
Build ESBT as a Service
EDE+DAO: optimize and automate the airdrop process

It is our belief that incorporating a soulbound token system creates the perfect niche to differentiate ourselves between competitor platforms as well as promotes an inclusive, community driven rewards system that fosters long term usage of the EDE protocol.

Looking Forward

In essence, soulbound tokens are designed to be building blocks to reshape how we interact with one another as well as creating a decentralized digital identity that rewards those who participate and grow the communities they are a part of. The ESBT initiatives we are building will bring EDE users a whole new level of experience to Web3 credentials.

Although it is still in the exploratory stage, the EDE team is full of expectations and hopes for its future.These improvements are far-reaching and aim to improve the existing voting infrastructure for DAO governance, as well as providing a continuous stream of rewards that benefit all participants within the EDE ecosystem.

Stay tuned for more updates regarding the ESBT system as well as the continuous development of the El Dorado Exchange Platform. It is expected by the end of September an alpha test will be available to the general public.

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