While social media allows creators, brands, and communities to set up space on various platforms, they are subjected to some form of control. However, this control can be eliminated using social tokens. Social tokens are cryptocurrencies created by individuals, brands, or communities to serve a relative purpose. Its issuer defines the uses and benefits of a social token.
Although NFTs are non-fungible, they are in some ways social tokens. Personal token, social money, community coin, and creator coin are some of the names social token can be called. Unlike mainstream media, social tokens are built on the blockchain and are secure and decentralized.
Most social tokens are launched on the Ethereum blockchain. The Solana blockchain is also witnessing some action however minute. Social tokens help creators develop symbiotic relationships with their fans. The fans contribute to their growth by investing in their works and supporting them while the creators know what their fans want and create it.
The more popular an issuer is, the more valuable their token becomes. With social tokens, brands, communities, and individuals can monetize themselves without neglecting existing platforms. This would enable them to put their loyal fans in exclusive membership levels. While some social tokens come at a price, some issuers give them out for free.
The number of community coins you hold will determine the kind of benefits you will enjoy. The contract that creates the social token allocates special access or royalties to holders depending on some conditions. As only a limited amount would be minted, the value of a social token will probably rise over time.
There was a record of a kind of social tokens in 1997 when David Bowie created the Bowie Bonds. This served as securities for revenue from his earlier works. Today’s social tokens lack third-party involvement and exist on platforms where they can generate value. It is believed that social tokens have a place in the web 3.0 future, likewise in branding and marketing.
Right now, there are three distinct types of social tokens, and they include:
1. Personal Tokens
These are tokens that individuals like artists, athletes, content creators, and personalities issue to monetize themselves. If an artist like Beyonce created a personal token, it would be valuable instantly as her fans would drive the price up in an instant.
Buying personal tokens allow fans to be eligible for unique benefits from creators. Examples of personal tokens are KSK, PLAY, TILT, CHOU, ALEX, ALLIE, and RAC. RAC is the personal token of André Allen Anjos, a Grammy-award-winning artiste launched on Zora. RAC can only be earned, and it is not for sale.
KSK is Keisuke Honda’s personal token that gives fans access to his life on and off the pitch. Fans also enjoy private chats and social recognitions. Kevin Chou owns CHOU, ALLIE by Alliestrasza, TILT by Joe Pulizzi, and ALEX by Alex Masmej.
2. Community Token
This is created by an organization or a group of people for their community of followers. This token grants holders access to the community, which may be on Slack, Telegram, or Discord. It is often governed by a decentralized autonomous organization (DAO). These communities are made private using tools like Mintgate, Unlock, or CollabLand.
Community tokens can be used as incentives for members for activities. It can also be used to aid identity and cohesion. WHALE, FWB, CHERRY, and DONUT are popular examples of this token.
WHALE is one of the biggest community tokens right now. WhaleShark created it on TryRoll. It is backed by a vault of unique NFT collections owned by WhaleShark. The WHALE community, which is on Discord, is the most active.
Members have access to renting and purchasing selected NFTs from The Vault. They also participate in the governance of the community and DAO’s projects. FWB was one of the first community tokens. The community consists of people who are enthusiastic about the web 3.0 future.
To join the FWB community on Discord, you need 400 FWB. DONUT is the token of an Ethereum-based subreddit.
3. Social Platform Tokens
The token is issued by social platforms that support the creation and trading of social tokens. They allow holders to buy the social tokens created on their platforms. Examples include Rally, BitClout, Coinvise, and TryRoll.
Rally tops the list of social tokens, having raised over $22 million in April 2021. It allows members to have their social tokens. It has low transaction fees and is easy to use. However, tokens created on it can only exist on it because it is a sidechain of the Ethereum network.
TryRoll allows users social tokens on the ERC-20 standard. Although it is one of the most popular, it is not easy to use and has high transaction fees. BitClout resembles Twitter and the likes where users can react on tokens linked to celebrities. Users can also create their tokens.
Socios.com is a platform that has enabled the creation of fan tokens by football clubs. This has been embraced by football clubs across Europe, including FC Barcelona, PSG, Juventus, SS Lazio, Manchester City, AS Roma, and many more.
Of the three types, social platform tokens have great potential for long-term growth. However, community tokens will go a long way with a loyal community and a great model. Most issuers use social platforms to create their tokens. This helps them streamline their fanbase and create in a way that promotes connection and community development.
Social tokens can be used to monetize a brand, individual, or community as they can be requested in exchange for merch, accessories, and so on. It can be used to grant fans access to exclusive benefits, including events, sales, content, and the likes. It can give fans governance rights and as a symbol of membership. Fans can even hold it as a form of investment.
In creating a social token, some vest a part of the supply, peg it to an asset or create a liquidity mining program. As a fan who is looking to get your favorites token, there are some steps to take, including:
1. Do research on where the token is listed by checking it in Coingecko or CoinMarketCap.
2. Register on an exchange like Binance, KuCoin, and the likes.
3. Buy a relative cryptocurrency that you may need in performing the exchange using your fiat.
4. Transfer it to the exchange where the token is listed and perform the trade. Most social tokens are listed on the Uniswap exchange.
5. You can either store it on a software or hardware wallet after buying.
You can get some social tokens using your card; it depends on where it is listed.
As it is pegged to an individual, brand, or community, it poses a very high financial risk. There is also this risk of regulations being a new venture. However, this shouldn’t stop you from investing in your favorite artiste, brand, or community. You have to do proper research and deal wisely.