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Cryptogambling / Social Tokens: NFTs for Personal Brands and Communities

Social Tokens: NFTs for Personal Brands and Communities

Publish Date: 21/05/2023

Social tokens are an interesting aspect of the NFT and crypto market that is steadily growing into a mainstream concept. These digital tokens are providing creators with fair monetization and communities with benefits by tokenizing the reputation of brands and communities with the use of blockchain technology.

Top new creators and brands are already integrating social tokens into their work as a way to build and engage decentralized online communities and collectively reap benefits through an automated token process.

What are Social Tokens?

Social tokens are digital tokens that are powered by blockchain that represent individual creators, brands, and companies and can be used to monetize their content or services. They represent fractional ownership of a brand, individual, or community.

Social tokens provide an additional means for creators to monetize their content and earn directly from their community and consumers through the use of blockchain technology. They also provide community members (subscribers, fans, and online communities) with an avenue to benefit from the growing value of the creators or brands that they contribute to.

Unlike crypto tokens, the value of social tokens is primarily determined by the reputation of the content creator, as well as the exclusive benefits that token holders receive in the form of engagements and experiences. The concept was initially conceived a few years ago when the crypto world witnessed a surge in the number of influencers and businesses being paid to promote initial coin offerings (ICOs) to help generate funding for blockchain-backed projects.

The main purpose of social tokens is to transfer control and restrictions over content and services away from intermediary platforms and into the hands of the original creators and communities. Take, for example, YouTube, TikTok, Facebook, Twitch, and Instagram. These platforms dictate the type of content that can be rolled out, limiting creator creativity and user experience, and they take massive cuts from creator earnings and sometimes charge users for access. In addition, the end customers who contribute to the success of the creators and platforms receive little to no monetary compensation.

How do Social Tokens work?

Social tokens are decentralized digital currencies that function similarly to Cryptocurrencies and are built on top of blockchains such as Ethereum. They combine the principles of decentralized finance (DeFi), non-fungible tokens (NFTs), and ownership economy to create tailored tokens that are backed up by the reputation and value of individual creators, brands, and communities. In addition, social tokens can be bought, sold, and transferred on the crypto market with compatible platforms such as Rally.

Social tokens are also unique in their tokenomics: token design, issuance, distribution, as well as their incentive mechanism. Token design and distribution are usually done by platforms such as Roll and Rally since most creators do not have the technical skill required to create and distribute their tokens.

Users who are interested in the content or services of a brand or individual can simply purchase their respective social tokens from these platforms or earn creator’s tokens by engaging with them or participating in contests, events, and community activities.

Social Tokens vs NFTs: Differences and Similarities

Social tokens are often interchanged for NFTs among the crypto community due to their nature to be controlled and monetized by creators as well as similar utilities such as exclusive access and rewards

However, there are notable differences that separate the concepts, the first of which is fungibility. As the name implies, non-fungible tokens are unique, noninterchangeable tokens where every unit is different from another. This means that every NFT item, even from the same creator and collection differs in its cryptographic makeup and value. That is why no Bored Ape is the same in design and value.

On the other hand, social tokens are fungible and each unit of the same token shares the same market value. In this regard, social tokens are similar to other cryptocurrencies such as Bitcoin and Ethereum.

Types of Social Tokens

Social tokens can be broadly categorized into two main types: personal tokens (also called creator tokens or creator coins) and community tokens. However, the advancement of the concept has led to the introduction of other distinct categories such as social platform tokens.

Personal Tokens (Creator Tokens or Creator Coins)

Personal tokens are social tokens that represent individuals, usually influencers, public personalities, or creators such as artists, athletes, musicians, other celebrities, or entrepreneurs. Personal tokens serve as a way for creators to further popularize themselves, and monetize their content or influence and they also provide exclusive services and experiences to their followers in the form of access to events, one-on-one sessions, merchandise, and so on.

Prominent examples of personal tokens are the ALEX token by the renowned French entrepreneur, Alex Masmej and the RAC token by the Grammy award winner, Allen Anjos, popularly known as “DJ RAC.” RAC token holders enjoy exclusive playlists and airdrops, while ALEX token holders are entitled to a three-year share of Masmej’s earnings.

Community Tokens

Community tokens are created by brands and companies as a way to build and expand their communities as well as foster community engagement and collaboration. These types of tokens are typically created by, launched, and issued by decentralized autonomous organizations (DAO). Ownership of community tokens often comes with exclusive benefits such as exclusive access to content and events, brand merchandise, governance and voting rights, and even fractions of the company’s earnings.

DESK tokens by the crypto news network CoinDesk can be categorized as community tokens. CoinDesk offers DESK tokens which can be traded or used to purchase items at the company’s events to its active community members as was the case during the annual Consensus festival in 2022.

Social Platform Tokens

Social platform tokens are native tokens of platforms that facilitate the creation, issuance, and trade of social tokens. This token type is similar to native tokens of crypto trading platforms like BNB and increases in value as more people make use of the platform.  Social platform token holders can benefit from the growth, issuance, and burning of tokens in the network as well as enjoy other benefits that may vary depending on tbe token and network.

RLY, the token of the social token platform, Rally, is a top social platform token that has accumulated over $43 million in market capitalization since its inception, creating value and incentives for its holders and users of the platform.

Importance of Social Tokens

Social tokens are redefining how creators fund their work while building more engaged communities. Instead of relying on intermediaries to receive funding for their creations, creators can now monetize their work directly by establishing direct relationships with supporters who hold social tokens. The advantages bestowed upon creators far exceed alternative monetization models: social tokens empower community ownership over projects supported by token holders.

Furthermore, many social tokens incorporate governance mechanisms that enable holders to participate in decision-making processes such as voting on proposed projects or protocol upgrades. This decentralization empowers community members further by taking control over the projects they support fully. It builds a sense of ownership and commitment amongst stakeholders which drives increased engagement levels within these communities.

Besides promoting engagement levels amongst holders, social tokens unlock unique experiences exclusively offered for token holders. Exclusive events or services incentivize supporter loyalty while providing an alluring sense of exclusivity toward other audiences who don’t hold these tokens. When holding a social token people become increasingly invested in project success resulting in heightened active involvement from supporters through collaboration within communities. As audiences become more immersed in the successes of projects the greater the likelihood that they will engage fully.

In summary, social tokens provide creators with alternative monetization models while promoting stronger bonds between communities through empowering members with ownership driving participation levels and active involvement amongst token holders. In bringing together people who share similar passions or principles social tokens offer a powerful tool for building vibrant and interconnected communities. These bonds allow members to collaborate on common goals while also providing valuable emotional support making for a stronger sense of kinship among participants.

Top Social Tokens in 2023

Rally Social Token – RLY

 

Rally is a leading social token platform that operates on the Ethereum network and empowers creators, including social media personalities, sports figures, and brands, to launch their own personalized social tokens. RLY tokens offer customizable features, allowing creators to provide exclusive benefits to their communities, such as access to private Discord chats and targeted loyalty programs. One of Rally’s key strengths is its streamlined token creation and monitoring process. Creators benefit from real-time analytics and on-chain activity records displayed on their Rally dashboard, facilitating comprehensive token management.

Moreover, Rally prioritizes transparency and community interests. Detailed information regarding the number of token holders and tokens in circulation is freely accessible, enabling potential buyers to evaluate creator tokens before making investments. This commitment to transparency ensures informed decision-making and fosters trust within the Rally ecosystem.

As the platform’s native cryptocurrency, RLY serves as a reserve currency for all social tokens, facilitating seamless trading between different creator tokens and enabling the exchange of a creator’s token for RLY. Currently, Rally has an impressive market capitalization of $43 million and holds the number one spot for social tokens in the market

Torum Social Token – XTM

Torum is a SocialFi Metaverse ecosystem that offers a comprehensive platform tailored to the needs of crypto enthusiasts. At the core of Torum’s Web 3.0 ecosystem is its vibrant social media platform, which serves as a hub for cryptocurrency discussions, networking, and collaboration.

What sets Torum apart is its multifaceted approach, providing users with a range of features and services. Within the Torum ecosystem, users can explore a yield farming hub designed specifically for DeFi players, allowing them to earn passive income by providing liquidity to decentralized finance protocols. Additionally, Torum hosts an NFT marketplace where crypto artists can showcase and sell their unique digital artworks, tapping into the growing trend of non-fungible tokens. For those engrossed in the Metaverse, Torum also offers Avatar NFTs, allowing enthusiasts to immerse themselves in the virtual realm with personalized digital avatars.

The native XTM token plays a crucial role in Torum’s ecosystem, powering various functionalities and serving as a payment medium for its extensive range of features. Forum currently has a total market capitalization of $3 million.

WhaleRoom Social Token – WHL

Introduced in 2020 by renowned non-fungible token (NFT) collector WhaleShark, the WHL social token stands out for its unique backing—WhaleShark’s personal collection of NFTs known as “The Vault.” Comprising an impressive 3,600 audited NFTs on OpenSea, The Vault includes highly sought-after treasures like BioNet Baby and Avastar #0. The total valuation of The Vault, as assessed by nonfungible.com in December 2021, stood at an astounding $159 million.

With a dedicated community of 25,000 holders, WhaleRoom operates as a collaborative endeavor, allowing token holders to collectively decide on NFT purchases and sales, as well as the allocation of the monthly distribution budget. Community members enjoy exclusive benefits such as the ability to rent NFTs from The Vault and participate in WHL tokens and NFT airdrops. At present, WhaleRoom holds an increasing market cap of $5.3 million.

Steem  Social Token – STEEM

Steem is credited with revolutionizing the concept of blockchain-based social media platforms. With the use of its native token, STEEM, Steem facilitates a unique ecosystem where content creators receive payment for their contributions. Notable examples of platforms built on the Steem blockchain include the popular blogging website Steemit and the streaming platform Dlive.

The Steem network operates a delegated proof-of-stake (DPoS) consensus mechanism, through which its participants are actively involved in voting and electing validators for transactions. Under this system, validators receive 10% of the rewards, while an impressive 75% is distributed to community members who engage with the content. This rewards distribution encompasses creators, moderators, and users who interact with the platforms. Importantly, the level of engagement from a creator’s audience directly influences the rewards they earn, motivating creators to foster active community participation. Steem is currently capped at $85 million.

Final Thoughts (The Future of Social Tokens)

The concept of social tokens is still considered to be in its nascent stages with adoption and exploration still ongoing across various industries. The social token sector today is estimated to be about $1.75 billion, which is less than one percent of the total crypto market, per data from Cryptoslate.com. This shows that despite the sector’s steady growth, there’s room for further adoption and regulation.

Individual creators, brands, and their respective communities will begin to move from traditional platforms to blockchain alternatives in search of true content ownership, fair monetization, and equitable incentivization methods.

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