Everyone has probably heard about bitcoin and blockchain, but an emerging related technology is social tokens, which come with new opportunities for brands and creators.
Social tokens — digital assets backed by the reputation of a brand, individual, or community — are on the rise and set to be the next big thing in the cryptocurrency world.
But what are they, why are they on the rise, and how can you tokenize your brand?
That’s what this guide is all about. Read on to discover the next growth opportunity your brand cannot afford to miss.
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What are Social Tokens?
Social tokens are built around an “ownership economy” principle with the premise that a community will be more valuable tomorrow than today.
Creators can monetize their work as a non-fungible token (NFT) or social token, and supporters can give something back to show their loyalty.
Here’s how Rally explains their social token, Creator Coin:
Social tokens – also known as personal tokens, community coins, and creator coins – are decentralized and secured by blockchain, and built on the same model as common cryptocurrencies like Bitcoin or Ether.
Cooper Turley from Audius explains the concept further:
”Social tokens provide a means of not only sharing financial upside with their favorite creative but also enabling tiered, tokenized access based on active contributions.”
For example, say Loomly wanted to offer a premium subscription. Buying a $Loomly social token would give you access to exclusive content and a premium members-only chat group.
Why are Social Tokens on the Rise Now?
For a long time, creators – whether it be writers, artists, musicians, or thought leaders – have been restricted in their ability to monetize their work. Currently, they have to use platforms like YouTube, Spotify, and Substack, which take between 10-20% of their income.
Consequently, fans and followers have few opportunities to share in the creators’ growth. By owning a symbolic part of the creation, fans can access private content and vote to influence creators’ work.
But now, there is a thriving ecosystem for social tokens, including everything from customized distribution mechanics to community tools and aggregators.
Credit: Bankless
The opportunity to monetize communities across existing channels and create tiered membership levels will be easier and, therefore, more lucrative, thanks to social tokens.
The Numbers
As of December 2020, there were:
- 22+ Key Social Tokens
- $81.2M Total Market Cap
- 7000+ Cumulative Token Holders
- 700 Communities managed by Collab.Land
Source: Forefront / Coingecko / Collab.land
Examples of Brands Successfully Leveraging Social Tokens
Here are five examples of individuals, communities, and brands who are successfully using social tokens.
Keisuke Honda (KSK Honda Coin)
Rally recently announced Brand Coin, a new social token for brands, celebrities, and crypto influencers, based on the success of their Creator Coin.
One of the first brands to use the coin is Japanese soccer player, Keisuke Honda.
Keisuke Honda’s KSK Honda Coin will grant his fans around the world unmatched access to his life as a soccer player and entrepreneur, including:
- Exclusive video updates: Holders will receive regular updates on how Keisuke is doing on and off the field.
- Private chats: Holders will have access to private Discord chats with Keisuke.
- Social recognition for biggest supporters: Keisuke will recognize his most ardent KSK Honda coin fans with special social posts.
GenG (GG Strike Coin)
Esports Insider noted that “esports is prime real estate for custom currency.” So it’s no surprise that another brand using Brand Coin is the global esports organization Gen.G (GG Strike Force).
Gen.G’s Strike Coin engages and rewards fans in several ways, including:
- Private chats: Holders get access to private Discord chats with coaches, players, and staff.
- Vote on important decisions: Holders get to vote on key team decisions, including jersey designs, team cheers, emotes, and more.
- Merch pre-sales: Holders are first to access new and exclusive merch, as well as first dibs and discounts on the current merch line.
- Write suggestions and get a response: Holders can voice their suggestions on Discord and receive responses.
RAC ($RAC)
Grammy award-winning musician and producer RAC, aka André Allen Anjos, launched his $RAC token on Zora – a platform for artists, creators, and brands to craft their own markets.
RAC stated:
“Crypto enables communities to capture the value they create instead of being monetized by preexisting platforms, and $RAC is an active experiment pushing the envelope on these primitives.”
Interestingly, fans can’t buy $RAC, only earn it. For example, each month, 50,000 $RAC is split pro-rata across his ongoing Patreon subscribers.
The social token allows his fans access to a private discussion on Discord, exclusive content, and merchandise like $TAPE.
Friends With Benefits ($FWB)
Friends With Benefits is a community token launched by Trevor McFedries, the founder of Brud and the creator of Lil Miquela, an AI-created influencer with 3M Instagram followers.
FWB is like any other social network. It’s a space with value because of the content and ideas the users of that social network create and share. For 55 $FWB, anyone can join an active community of creatives pushing forward culture with new technologies at heart.
So unlike some of the other examples, there are no perks or discounts per se. You’re just paying to be part of an exclusive community.
Cooper explains the concept of Community Access further:
“Using tools like CollabLand, social token communities have boomed with a native integration to restrict access to those holding a predefined amount of tokens. Both on Telegram and Discord, a bot monitors a user’s connected wallet to keep track of the token balance. Drop below the threshold, and you get the boot. Acquire more tokens, and have your roles, privileges, and permissions updated as a result.”
Alex Masmej ($ALEX)
Social tokens have also been used by individuals like Alex Masmej. The young entrepreneur raised $20K through $ALEX to fund his move to San Francisco and launch a career in cryptos.
These ICOs (Initial Coin Offering) give exchange rights to token holders, such as a percentage of future revenue or the right to vote on future decisions.
You can watch the video here.
Alex described his social token as “a blend between a small Income Sharing Agreement and a human IPO.”
As social tokens like $ALEX give purchasers the rights to future income, it’s prompted more individuals to consider raising capital to bootstrap their startups in the same way.
All of these examples show how individuals, communities, and brands are using social tokens successfully.
How to Tokenize Your Brand
If you’re intrigued by the idea of using social tokens, here are a few ways you could tokenize your brand.
There are three main ways for brands to use social tokens:
- Transacting – Users can transfer social tokens to the brand directly in the form of a tip or donation, or they can send them to other users.
- Holding – Some users may decide to hold on to a social token as a collectible asset representing their support for, and loyalty to, a particular brand, like existing loyalty programs do. Instead of collecting loyalty points, users collect social tokens, and those with the most get access to more exclusive and valuable benefits and rewards.
- Earning – Brands can reward loyal fans and customers for past or future support with social tokens.
Here are a couple of examples where you could put these ideas into practice.
Example 1: An online clothing store
Imagine you run an online clothing store. Here’s how you could use social tokens instead of loyalty points.
You could distribute social tokens to your customers for:
- Sales – Every time a customer makes a purchase, they are rewarded with tokens.
- Promotions – Customers get bigger rewards for specific purchases, like promotions or sales.
- Newsletters – Reward customers when they sign up for a newsletter and/or when they read it.
- Support – Reward customers for patience with their support tickets.
Customers could redeem social tokens for:
- Gift cards – Tokens can be redeemed for gift cards.
- Discount codes – Customers can exchange their tokens for discount codes.
- Perks – Customers with a high token stake get priority orders.
- Early access – Users with a specific amount of tokens can get an early access to new collections.
Example 2: Running shoe community
Imagine you own a running shoe brand, like Nike, and want to form a running community.
You could distribute social tokens to your members for:
- Sales – Every time a member makes a purchase, they are rewarded with tokens.
- Shoe Training Club – Members can earn tokens for training with Shoe Training Club App.
- App onboarding – Reward members for installing and going through the onboarding process on your app.
- Social media – Reward your followers for sharing and promoting your content.
Members could redeem social tokens for:
- Premium membership – Members with enough tokens could get access to premium membership.
- Discount codes – Members could exchange their tokens for discount codes.
- Voting – Token holders can vote for the next running shoe design.
- Early access – Members with a specific number of tokens could get early access to new shoes.
Social tokens in a nutshell
As more tools, platforms, and collaborations are created, more brands will have the opportunity to use social tokens either as a means of exclusive community access or members-only perks and benefits.
Either way, it’s a win-win situation where both creators and fans can benefit.
