This article discusses social tokens, what they are, and why they’re crucial to the future of business.
Several other terms are being discussed - social token, creator coin, community token - all refer to the same thing. With social tokens, creators have an opportunity to have new revenue models, and communities of fans for creators could be able to run their digital economy.
Social tokens could become the next big thing in cryptocurrency this year, even though regulatory concerns and specific usage scenarios still need to be clarified.
A social token can be illustrated by comparing it to an NFT.
NFTs represent a record of ownership of unique digital assets - such as works of art, video, image, etc. NFTs are unique because they cannot be easily swapped for one another.
On the other hand, social tokens are fungible (can be exchanged). Social tokens can be swapped and divided into fractional shares, just like the US dollar and bitcoin.1
- NFTs allow a single fan to own a digital asset.
- Social tokens allow multiple fans to share ownership of an asset.
Since Web3 is a tokenized community, it is important to understand what audience and community mean?
The difference between an audience and a community should be stressed. An audience consists of individuals who consume content, but they are not the same as a community. A community is a curated audience that requires space to grow and thrive. Essentially, a community is composed of a segment of your audience who are more engaged with what you produce on their own by liking, commenting, etc. Tools to create a community can be Discord, Telegram, Reddit, or Twitter.
Social tokens can help you build authentic relationships with fans. You can interact with your fans by rewarding them, participating in their activities, and growing along with your base of supporters.
By utilizing social tokens, content creators will be able to eliminate this barrier and revolutionize the digital economy by introducing a new ownership concept.
The use of social tokens allows fans to participate in the ownership of your community. The holders of social tokens may:
Gain access to community benefits.
- Be a co-owner of NFTs.
- Be a co-owner of future earnings from creators.
- The value of your token increases as the community grows and more tokens are issued.
Outlier Ventures token designer Jan Baeriswyl told Cointelegraph that social tokens are fungible ERC-20 tokens that can be utilized for a wide range of purposes and financial ones. “For example, social tokens can be used to gain access to specific communities, like on Discord. By being less financially focused, social tokens are more accessible to the mainstream, which is why we are seeing increased interest,” Baeriswyl explained. Moreover, he noted that social tokens could take various forms and be used for multiple purposes, including creators engaging with fans or communities to raise awareness for specific causes.
Some industry experts believe that social tokens will play a key role in decentralized autonomous organizations (DAOs), which typically leverage a token that can be spent for rewards.
Stani Kulechov, founder and chief operating officer at Aave (AAVE) — an open-source DeFi protocol — told Cointelegraph that although social tokens are still extremely nascent, the crypto sector may see creator social tokens underpinned by DAOs.
Social tokens can be divided into creator tokens and community tokens. Both of these tokens are decentralized and secured by a blockchain. They are constructed on the same basis as common cryptocurrencies such as Bitcoin and Ethereum.
The fundamental difference between creator tokens and community tokens is the aim of creation.
Community tokens are created to gain access to a community. The creator tokens are generally created by public personalities such as entrepreneurs, artists, etc. In synopsis, if you would like to reach creator tokens.
A growing number of social tokens, as digital assets, are already playing a crucial role in the creative ecosystem. Many big brands are going to enter the token game in 2022 and start developing their token programs. Social tokens will be accepted by larger communities, such as large publishers or online communities built around products or brands.
Web 3.0's social tokens connect content creators and the community/community members.
Social Tokens are designed based on the idea that communities will be more valuable tomorrow than today.
Content creators will be able to engage with their fans more intimately through social tokens. In addition, social tokens will give creators more control over the revenue they generate from their work.
Web 3.0 focuses primarily on connecting creators and directly. Social tokens will characterize this next wave of the Internet.