The digital space is redefining the sense of belonging with social tokens. A brand or public figure loyalist will want to get access to private groups, exclusive events, project decision processes, and all other accesses that separate them from the crowd. Just like how fans can go to any length to support footballers, musicians, wrestlers, e.t.c. Social tokens are used to build intimacy between creators and collectors in the NFT industry. The Friends with Benefit brand uses its FWB token to make community members the key decision-makers on the platform. There is various use for social tokens but we shall be looking at their impact on the NFT industry.
How social tokens work
The use of social tokens which are sometimes referred to as creator coins or community tokens has built a direct relationship between the creators, the audience, fans, and collectors. Through the use of the blockchain, monetization services that require third parties for completion or as overseers can now get executed directly by creators and collectors.
Social tokens are cryptocurrencies that are personal to brands, celebrities, influencers, communities, content creators, e.t.c. They are tokens that work according to the economics of those that issue them out.
To fully understand, they are tokens that can be given out by anyone to reward their fans or sold to monetize themselves. These tokens bridge the gap between the creators and their audience, they actively enhance interaction in the community How?
Using RAC, an award-winning grammy artist as an example, he launched his coin $RAC to empower artists by eliminating the intermediaries between the artist and the fans. On the side of the fans, they enjoy exclusive access that wouldn't require them to pay before use. The use of social tokens are balancing up the game between the creators and the audience.
Web2.0 platforms like YouTube, Instagram, and Tiktok are heavily loaded with various creators from different niches. These platforms are centralized thereby making users subject to their rules as they are the only means through which the creators meet with their audience. Despite the traffic these creators bring to the platform, the reward rate is low compared to the effort in building up an audience on the platform
But, the web3 replacement of this platform has changed the modus operandi of the monetizing process without interference. Through platforms like Rally, creators can launch their tokens with no technical skill needed. These tokens are then used by their fans to request their services, to gain intimate access to them, and any other opportunities provided by the creator. Platforms like Roll enables celebrities like Akon and Ja Rule to create their own social tokens. According to data from Forefront, the social token market cap is estimated to reach $81.2 million with about 20 different types of social tokens currently available.
Social tokens vs NFTs
The web3 economy is giving data power control to the owners of the data. With the upsurge in the use of social tokens combined with NFTs, content creators now have access to control their economy easily.
Social tokens just as described before are cryptocurrencies but they are valued as regards the reputation or identity of the creator. These tokens are fungible; they equate to the value of one another and can be easily replaceable.
NFTs as the name implies are non-fungible, the rights are still retained by the creator. Though uniquely identifiable from each other, collectors who mint from the same collections are regarded to belong to the same community.
In this regard, creators use social tokens as the currency of their community while members retain their NFTs. The social tokens issued by the creator are used for other services to be processed either by the creator or collector.
Rally's approach to NFTs and social tokens, stated that investors want to see why they invest, just like in real life where you would be sure of the business you want to venture into. Now, NFTs are seen as part of the value that keeps the community together. They can be referred to as goods since these NFTs are now being used as gateways for so many things.
The social tokens in the community can be used to run governance, pay for service, support creators, and reward users. This way, the NFT community grows seamlessly with no opposition from third parties or centralized authorities.
Benefits of social tokens in the NFT space
Social tokens' advantage to the community is first-hand benefits. The access, interaction, governance, e.t.c. that takes place in the community will only be limited to those that own the tokens. Though there are processes where NFTs give access to this but there are a lot of times, the NFTs cost more than what the average investor can buy thereby cutting off the opportunity from them but with the use of social tokens, all users can now enjoy the same community benefit
Social tokens give community members sharing power over the content to be produced. Content such as podcasts, videos, reels, e.t.c. The contents can either serve as NFTs on web3 platforms or be a project in which community members can collaborate through the submission of entries.
Platforms like Bitclout allow investors to be able to trade celebrities, influencers, creators, e.t.c as tokens which only increases as people buy or gain more popularity. Also, crowd-funded NFTs are resold, and royalty earnings can serve as passive income to token holders.
Ease of Monetization
Through social tokens, NFT creators who might not be directly creating NFTs but add value to the space on social media can enjoy the benefit of getting rewarded by the community without interference from third parties. They can get support, fans can buy tickets to some online events, and they can easily start their community too.
Single NFT creators who still have dispersed followers or fanbase can get an organized community through social tokens which makes the creator closer to an audience who has ideas or suggestions to develop both the creator and the community
Proof of loyalty
Social tokens are based on the reputation of the brands, the community members buy because they believe in the project and die-hard fans will always pull out more funds to get more shares of the tokens. At this time, since transactions are traceable, brands or creators could balance how they affect their audience and how massive the support they are getting back.
Social tokens and NFTs are still growing hand in hand, with the launch of new platforms targeted on social, the limit to the use of these tools cannot be imagined. So as not to miss out, Roll targets web2 and web3 users to create social tokens and use them to run their communities, and also allow these tokens to be used for DeFi services such as providing liquidity. These feature has given more opportunity to users to run a wider economy not only within their community but the crypto space as a whole.