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Social tokens are considered the next trend in the web3 world. Especially, with all other trends such as NFTs (Non-Fungible Tokens) just around the corner alongside of decentralized autonomous organizations (DAOs). Such topics will continue to drive the crypto community throughout the year 2022 and beyond. With many renowned football clubs such as Barcelona, Paris Saint-Germain and AC Milan joining the recently launched Socios (social token platform), mainstream media and third=party organizations are no longer taking stock out of creators as we are entering the new era of tokenised communities. As such, Socios is one of the upcoming Social Token platforms.
However, what are social tokens? What is Socios? These are just some of the questions which we will aim to answer in this article. Also, if you want to learn more about non-fungible tokens, NFT Marketplaces or smart contracts, then please visit our Blog page which contains many resources. Otherwise, please feel free to reach out to our elite team of developers who can help you build the future of web 3.0.
What is a Social Token?
We at DCVX define social tokens as the emerging category of digital assets which are supported by the reputation of an individual, brand or community.
However, social tokens are in a sense the cryptocurrency of a certain brand, community, or influencer (celebrity) that can be used to monetize themselves or their unique content beyond the standard methods of monetization. Social media is the current Web 2.0 channel utilized by celebrities and businesses alike to monetize their work, but more and more of them are shifting to the DeFi space as of recent years. For example, Facebook or Instagram will gradually be replaced by other platforms or will be repurposed in the metaverse. This is where social tokens jump into the equation. They will allow content creators to eliminate third-party providers and will help them prove the ownership of their work through the digital economy – social tokens. Generally, there are two types of social tokens – creator tokens and community tokens. Both types are decentralized and implemented on to a blockchain network such as Bitcoin, Ethereum, Solana or any other network.
In addition to our definition of social tokens, to better understand what social tokens are, we have gathered a few extra definitions which can help you better grasp the true meaning of a social token before we further discuss its types and characteristics. As such, here are a two definitions which explain what social tokens are:
“A social token represents a fractionalized share in the intrinsic value of a community, brand, or human. It’s a form of the ownership economy giving participants exposure to the growth trajectory of whatever the community is clustered around as well as the potential to help shape that trajectory.” - The Defiant
“Social Tokens are the broad category of crypto projects that often includes Personal Tokens, Creator Tokens, Community and Brand tokens. They represent the value and ownership or relationship to a creator or community." - Jess Sloss, Seed Club
Are Social Tokens different from NFTs?
The answer here is always – Yes. We have already defined non-fungible tokens (NFTs) in one of our previous articles, however a short definition will be added here for context. A Non-Fungible Token (NFT is the short term) is used to identify something or someone in a unique way.
The biggest difference between NFTs and social tokens is fungibility. NFTs are non-fungible tokens, therefore each token is unique and there are no two identical ones whereas social tokens are fungible. Each social token has an identical value as all other existing ones. This is similar to cryptocurrencies. For example, an X amount of Ethereum will be of equal value as another X amount of $ETH. As a result, each social token is similar to each cryptocurrency as they are interchangeable. In contrast, each NFT has a different value depending on multiple factors and trading NFTs is a much more complex process. In other words, social tokens provide benefits, privileges and rights of artwork, music or any other items for their investors. On the other hand, NFT owners have unique rights to a single or particular piece of a creator’s work (e.g. an NFT collection of 10,000 pieces).
Socios.com Use Case
Social tokens allow for fans of creators, musicians or artists to better interact with each other and mutually benefit. Anything which has a following or community around it can ultimately have its own social token. For example, a Netflix film can have great success. After that, the filmmakers choose to release merchandise for the film’s fans. If the filmmakers (or owners of the project) release a social token associated with the film, then users will be able to drive the direction of the merchandise. This is similar to some DAOs where the community sets the pace and votes on different decisions.
As such we will showcase an example with the case of Socios.com.
Socios are the creators of fan tokens which allow users to be more than fans. As their website suggests:
“We believe passion should be recognized and that every fan has the right to make their voice heard, wherever they are in the world. Influence your team, access VIP rewards, exclusive promotions and join a global community of super-fans.”
Many football clubs,F1 racing teams and others have already joined Socios. The platform offers a mobile application for both Android and iOS where users can buy fan tokens of their favorite clubs or eSports teams.
This is achieved on the Chiliz blockchain network. Users can buy $CHZ with fiat currency and exchange them for their favorite tokens. Ultimately, token holders/owners can either win rewards over time or vote for important changes associated with their teams. For example, AC Milan token holders can vote on different artwork which is distributed to players during Christmas as well as special gift designs given to the club’s legends. Another example of Socios social token voting systems allows users to vote on what is their favorite club’s away t-shirt design or various other merchandise decisions.
Benefits of social tokens
As discussed in the previous paragraph there are benefits to social tokens and social token owners.
- Social tokens have improved incentives than just typical ‘reward points’ and rewards schemes that airlines, hotels, and credit card companies offer.
- Since social tokens are built on a blockchain, therefore it is impossible (or nearly impossible for the being) for fraudulent transactions to occur when it comes to token ownership. As a result, brands will benefit as they will be able to create an ecosystem for their businesses where only genuine fans or consumers are expected to participate in transactional experiences. In other words, only real fans will participate and other users will be excluded by default.
- Fans can redeem tokens by treating them as an investment. If users hold on to their tokens and the project which they support is successful, so will their investments increase over time. This is risky and creators can eventually take distributions to increase their own income. Also, certain events can drive token prices up and down which can in turn lead to massive loses.
- Web3 is continuously gaining popularity and more and more users are getting into the DeFi world, hence this will drive demand and supply related to social tokens. As a result, early adopters of social tokens can benefit due to the hype and massive interest.
- Content creators will be able to engage with their fans via social tokens more efficiently than ever before. For example, fans can receive virtual backstage passes for concerts or exclusive content which is only available to token holders. On the other hand, social tokens will benefit creators as they will have a better understand and control over the revenue of the content which is produced.
Types of Social Tokens
As already discussed there are two major types of social tokens such as: community tokens and creator tokens. However, we will look at all existing types of social tokens in this paragraph.
Creator tokens: Creator tokens are similar to digital fan clubs where creators can use tokens to reward fans with different kinds of perks or levels of access. In this case, tokens serve as an incentivizing and organizational tool to mobilize a creator-centric community towards a mutual mission.
Community tokens: Community tokens are generally used within collectives that do not evolve around one individual or creator. For instance, community tokens may allow a community to organize around shared mutual goals or outcomes, oftentimes within a DAO. Groups that could use community tokens include informal clubs, online communities, collectives, or cooperatives.
Personal tokens: Personal tokens can be implemented by one person, either abstractly tokenizing their reputation or their time. For example, designer Matthew Vernon has created a token called $BOI. It is an Ethereum based, ERC-20 compliant token that has one function. Each token can be redeemed for 1 hour of the artist contributing design work or consultation to a crypto project.
Brand tokens: Brand tokens are distinct in that they may be used by an existing organization in a way that looks like a loyalty reward point system.
Are social tokens valuable?
Value can be perceived differently by each user. As the technology undergoes continuous evolution, social tokens will be accepted by larger communities and they will drive the value of each token. Such tokens have massive potential to become somewhat of a digital Disney franchise. In other words, if creators and communities alike continue to evolve around specific social tokens, so will the respective token’s value increase over time. A comparison can be made with physical art which initially has low value. However, as soon as the artist gains popularity, the value of his work increases as well. The same is expected to happen with social tokens generated for content creators.
Moreover, social tokens will have the potential to redefine the way companies can generate targeted business opportunities. They can even create new marketing opportunities and reshape digital marketing in general. This is all backed up by the security of decentralized finance which will ultimately influence the value of all respective tokens.
Biggest Social Tokens by volume
Currently, the largest social tokens by market cap volume are the following:
1. Rally
2. Whale
4. Mork
6. Onooks
7. YUP
8. JULIEN
9. 1337
10. Skull
Rally holds first place with the outstanding amount of $867,727,124 market capitalization. Rally is a platform for creators and their communities to build their own independent digital economies. Also, Rally allows users to launch their own social token that enables transactions, access, and more creative solutions for creator economy. Most importantly, Rally takes no fees, has low environmental impact, requires no crypto experience, and seamlessly integrates with your platforms.
Data could be updated as all details have been exported from www.coingecko.com at the time of writing this article.
Want to start your own Social Token?
After learning what Social Tokens are and what is their implementation in the DeF world why not create your own? Our team of developers can help you achieve these results swiftly and efficiently. Simply, visit our services page if you wish to learn more. Otherwise, please check out our Blog which contains various resources related to Web3, DeFi and NFTs.
