By Kevin Yu Introduction The latest publication [^fn10] from Microsoft’s Glen Weyl, Flashbots’ Puja Ohlhaver, and Vitalik Buterin, on decentralized society (or DeSoc), has made waves in the crypto community. Some have even associated it with the potential launch of the next “DeFi/NFT summer”. The piece overall is drafted with several meta-narratives, all of which are centered around the idea of "publicly visible, non-transferable, but potentially revocable" tokens, or the so-called Soul-bound tokens (SBT). The authors have clearly detailed the exciting future that non-transferable tokens (and their off-chain counterpart, verifiable credentials), as signals of reputation and tools for broader decentralized network coordination, can bring to the currently hyper-financialized crypto space. Since this topic is also something I have been exploring with the Clique team for the past few months, I'm writing a commentary here on the pros, cons, potential design specs, and technical implementation challenges of the DeSoc ecosystem. The commentary is broken into two pieces. This is the first part that mainly explores the trade-offs between hosting the credentialing system on-chain and off-chain, as well as the legacy compatibility aspect of designing an identity system. The second part will be more focused on plurality, quadratic voting/funding, and generic mechanism designs for reputation systems. Summary of The DeSoc Piece A specter is haunting the crypto space -- the specter of over-financialization. DeSoc aims to solve this with "Souls" and "SBTs", a duality of accounts (wallets) and publicly visible but non-transferable credentials (tokens) for signaling reputation, representing memberships, and granting access rights. Keep in mind the definition of "accounts" and "credentials" can be highly abstract, without the constraints of necessarily being located on a public blockchain. Some of the important design specs of such a system include the issuance of SBTs, staking SBTs for reputation, programmable privacy for different SBTs, and community-based key recovery schemes.