COVID-19 made entertainers, creators, and artists reconsider the way they interact with their audience. While in quarantine or isolation, they set up online meetings, with some going as far as putting on concerts (Post Malone’s Nirvana tribute livestream was a great example of that). Yet, as if that was not enough, a few decided to go even further and made a revolution in the digital world by creating social tokens.
What Are Social Tokens?
Social tokens are the type of crypto tokens created by individuals (usually artistic people) or communities. Based on that, one could split up social tokens into two main categories:
Personal tokens. The idea behind this category is mostly to exchange labor. Let’s imagine you’re a musician. In an ideal world, it would work like this: say, someone orders a melody for their vlog, you do it, and earn a certain number of social tokens you both agreed on. Then you can use these very tokens to receive services from that blogger in the future.
Community tokens. These tokens stand for memberships or communities.
Suppose you’re a professional CS:GO player who also regularly streams. You’ve received quite many requests to provide tutorials on how to improve your skills from your viewers. In this case, you could create a community token your fans can obtain to access a private Discord server on which you post educational content.
Social tokens are revolutionary in terms of how they change the interaction between content creators and their fans. Such tokens overcome a third party that traditionally connected creators and their audience, giving the former more adequate rewards and making them closer to their fanbase. In the grand scheme of things, creators become more independent of their industry fetters and more fan-oriented — a win-win outcome for both sides.
NFTs and DAOs
Although social tokens are often associated with NFTs and DAOs, they are not necessarily bound to those two phenomena. NFTs are non-fungible (that’s where their abbreviation comes from — non-fungible tokens), meaning that an NFT item is unique. A social token is, however, fungible and can be “traded” for another of the same token. For instance, with CryptoPunks and Stoner Cats specializing in the NFT collectibles, you could easily bet their community members possess the NFTs as well. Yet, those members are also part of a much bigger community — and this very community stands for social tokens, not NFTs.
The same could be applied to DAOs. Decentralized autonomous organizations, groups of people coming together around a shared mission with the rules established on a blockchain, are often governed with the help of social tokens. By the way, a great example of a community token would be Friends with Benefits (FWB) — a community of Web3 artists and thinkers. If you want to join their Discord chat, you have to have a minimum number of FWB tokens plus submit an application to prove your commitment. The FWB token entitles you to governance rights, which means you may influence the entire FWB community.
While social tokens do indeed have a huge impact on DAOs, they are, however, not limited to the DAO usage only. Social tokens, even community ones, can be used in many cases that have nothing to do with governance purposes.
How To Use Social Tokens
As of now, social tokens find use in three main ways:
Exchange. As aforestated, people can use social tokens to exchange them within the same community they all belong to and provide services to one another.
Access. Fans may buy token sales to access more private content, such as demo recordings or sketches. Some even give access to private chat rooms.
Investment. Although social tokens might have been initially designed for bettering the creator-fanbase relationship, you may easily benefit from them even standing outside of any community. If there’s a certain amount of hype around a creator you don’t personally like, you might yet still buy their social tokens. Since they may rise in price shortly, it might be a decent short-term investment for anyone.
Like any other novelty, social tokens possess a few significant risks. First off, there’s no regulation at all. It makes many social tokens incredibly volatile and unsteady even compared to meme cryptocurrencies, such as DOGE or SHIB. Many assets can tremendously fall or rise in value at any second.
Second, the fact that someone not necessarily fond of an artist may buy social tokens only to make money undermines the core idea of social tokens’ existence. This, by the way, makes them even more unpredictable. And unfortunately, many content creators are rather clumsy at handling all these processes adequately. In other words, it might bite just about anyone:
creators may lose their audience in case someone outside their community ruins their reputation and trust;
fans may face the issue when the content is merely inaccessible to them and thus feel depreciated by their idols;
investors may end up having social tokens of almost no value at all.
To reduce these potential risks, always scrutinize a content creator you’re a fan of or going to invest in: how regularly a creator produces new content, if he/she is really good at what they do or they just got lucky, how you feel about their personalities (do they stand out like honest and good people to you?), if their community is large enough, and so on. Also do not forget to investigate their tokens: what kind of technologies were used and who supported the project.
Also keep in mind that despite the fact that anyone can own social tokens, there are still centralized points of control. Unfortunately, their mere existence may cause issues. Recently this year the Roll platform was hacked for approximately $5.7 mln on social tokens. The attacker then immediately proceeded to sell the tokens, leading to a tremendous fall in value.
Regardless of who you are, remember to make sure the project is of high quality and is viable in the long run.
Social Tokens: Tools, Platforms, and Communities
There are many social token tools, platforms, and DAO communities that help both creators and their audience, including investors. Here are some of the most reliable and interesting ones:
Seed Club. A DAO business accelerator for social token creators. Fundamentally Seed Club supports and invests in tokenized communities in exchange for some percentage of their tokens. Not only does the platform help social tokens flourish, but they also do their best to “bring the most promising social token projects”.
Rally. Primarily designed for Twitch streamers since they can create their own social tokens called “Creator Coins”. These social tokens are exclusively used within Twitch streamers’ communities.
BanklessDAO. This user-friendly DAO community helps ordinary folks “discover decentralized financial technologies through education, media, and culture”.
Coinvise. A tool for creating and distributing social tokens. You can launch both personal and community tokens and even create quests to reward contributors.
Mirror. A decentralized publishing platform that fundamentally assists writers and other creators in their crowdfunding campaign by allowing them to issue NFTs and social tokens.
Forefront. Another community that focuses on social token content. Forefront reviews the most prolific social token projects and on top of that also has its own social token — FF.
The Future of Social Tokens
While on the rise, social tokens have yet just begun their journey. All pros and cons considered, the potential they have is gigantic. In just a couple of years, we may very likely see more celebrities create their own tokens to communicate with their audience. The new technology could also help people who are unfairly ignored by the mainstream entertainment industry. Among a few opportunities now already available proving that is certainly fundraising, which might become by far easier with the help of social tokens.
And given that more and more people give up on their offline jobs for the downshifting life, social tokens may also have a huge impact on how people will get hired and paid when working online. Due to its transparency compared to the many corrupted economic systems we have today, the alternative to traditional career paths may be more attractive and consistent.