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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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.
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.
As of December 2020, there were:
Source: Forefront / Coingecko / Collab.land
Here are five examples of individuals, communities, and brands who are successfully using social tokens.
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:
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:
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 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.”
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.
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:
Here are a couple of examples where you could put these ideas into practice.
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:
Customers could redeem social tokens for:
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:
Members could redeem social tokens for:
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.