Social tokens have rapidly become one of the most talked about areas of crypto innovation and interest has been driven forward as new capabilities are developed and new potential use cases built.
Innovation within the cryptocurrency space is nothing new, in fact, crypto as a concept is still in its infancy as the institutional financial landscape tries to find a place for a system built around decentralized, unregulated value.
As blockchain tech adoption has accelerated around the world and open source projects have seen an explosion in collaborative projects and new ideas, there is a wide range of exciting blockchain projects capturing the imagination.
Social tokens fall firmly within this category and have become a focal point for creators in trying to reimagine the current media landscape, especially the ownership model and who ultimately profits from content and original artworks.
Web 3.0 offers a new, more flexible way for audiences and content creators to interact and provides a huge point of difference to current web protocols. Under the current web model, creatives like musicians, digital artists, photographers, videographers, comedians, DJs and others create high-value content and art which is then shared across massive global platforms like Instagram, Twitter and TikTok.
The biggest point of benefit for the creative in this model is a heightened profile which may lead to either sale of their work or potentially lucrative contracts. The 3rd party platforms, however, have fresh, high-value content on tap which enables them to drive growth, monetize audiences through advertising and increase user interaction – all without doing very much but providing the platform.
And this is where social tokens come in. Social tokens are a way of artists to take back some control over the way their work is used and sold. The idea behind social tokens is very much community focused and, like the crypto space in general, there is a huge drive for greater inclusivity, fairness and visibility.
Social tokens are based on blockchain technology and derive their value from the popularity and growth of artists’ communities and projects. Social tokens are a way for artists to empower their followers while monetizing their art and offer creators a way to regain some of the control over who benefits from their creativity in an increasingly digitally driven world.
In theory, social tokens remove the need, or at least significantly reduce the reliance, on global media platforms like Instagram. An artist or creative can launch a unique social token that allows his or her followers and community to invest in their work. Creators can become their own economy, offering fans of their work special deals, exclusive launches and more.
And audiences can invest in social tokens as a store of value, like any other investment. If somebody feels they have discovered a talented artist that has not yet become globally famous, they can invest in the social tokens that the artist offers, and like with any financial instrument, if the artist’s value rises, the value of their social token will rise too.
Social tokens are relatively easy to create and can be built on the back of existing crypto networks like BTC and ETH. Because social tokens are such a novel idea, without much research and proof of their long-term value, investors and traders should take extra care when thinking of investing in any social token.
How do Social Tokens work?
Social tokens are different to crypto coins in that they are not built on a standalone blockchain network. Established crypto like Ethereum or SOL is mined or minted on a distinctive blockchain particular to that crypto, and its value can rise and fall in very similar ways to traditional currencies.
And because cryptos are now more universally accepted they can even be used to buy goods, pay for services and form part of a business’s balance sheet in the form of investments. These use cases are expanding all the time as cryptos become more ubiquitous and this is what makes them attractive propositions for investors and traders.
Social tokens are slightly different, in that they are not built upon their own blockchain and they are not strictly a cryptocurrency. They do however hold value and the price of social tokens can rise and fall in line with a creator’s popularity and success.
ETH is a popular blockchain for creators to build social tokens on, but it is important to remember that social tokens are more limited in that they are only valid in exchanges with the creator of the original token.
But how are they used and what do they allow creators to do? Social tokens let artists invest in their own success and provide a unique point of difference while offering an exciting way for followers and fans to be part of a wider community.
When people invest in a creator’s social token, they are more easily able to finance projects or artistic collaborations and it enables creators to shift away from 3rd party platforms and take greater control over how and where their content is used.
A creator will broadly create a limited amount of social tokens to help drive enthusiasm and ensure that they can retain value as part of a limited collection. Artists and content creators may use social tokens as a way of incentivizing fans or rewarding them for being loyal.
Social tokens also allow artists to stage digital giveaways and promotions or they may be used to release special content, limited behind-the-scenes videos or exclusive promotions.
Some artists even use social tokens as a way to grant access to exclusive digital spaces or communities like Discord. By using social tokens, content creators can drive their popularity and gain recognition for their work, while building a long-term fanbase.
The three most common ways that social tokens are used are:
- As an investment: fans and followers may buy social tokens as an artist becomes more popular, making the tokens rise in value.
- As a medium for exchange: By securing investment in the form of social tokens, artists can fun their latest album, video or project.
- As a form of access: Creators can use social tokens to reward followers with access to exclusive digital spaces, communities, groups and more.
Social NFTs explained
NFTs, or non-fungible tokens, are another innovation within the crypto and blockchain space that has caught the imagination of creatives. NFTs are non-fungible and this means that they are not interchangeable, every NFT is therefore unique and has its own value.
This is a key difference between coins and NFTs and is the reason behind the huge NFT art rush as it enabled art collectors to curate original 1 of 1 artwork while the wider market could assign value to them.
Cryptocurrencies on the other hand, like ETH, Bitcoin and Cardano, are fungible and this means that any two coins from the same cryptocurrency have the exact same value. This is similar to traditional currencies – 1 British pound has the same value as any other British pound in circulation. Cryptos have the same principle; 1 ETH is worth the exact same as any other ETH on the blockchain.
The distinction is important in the context of Social NFTs. Social NFTs are driven by the same kind of ideals that underpin Social Tokens like value, fairness and inclusivity. Social NFTs are collections of NFT artworks that are unique and which each has a different value. One of the most famous Social NFTsis the Bored Ape Yacht Club (BAYC) collection.
The BAYC is a collection of 10,000 digital artworks of apes and is owned by investors, art collectors and NFT enthusiasts around the world.
What are some of the best Social Tokens available?
Social tokens are still such a new entrant to the world of blockchain and crypto that their staying power and popularity are still being determined by the wider market. Here is a list of some of the best current Social Tokens in 2023.
Remember, like any other form of investing, if you want to trade or buy Social Tokens, it is critical that you do the required research so that you understand how and why values may rise and fall.
RLY is built on the ETH blockchain and allows artists, creators and creatives to create their own digital economies. Rally is an ETH sidechain and has been built for simplicity and flexibility.
Whale is one of the most interesting social tokens out there are is backed by The Vault space – a collection of rare NFT pieces valued at $115m. $Whale is pegged to The Vault and has a total of 10 million social tokens. The Whale Social Project revolves around the purchase, sale and collection of rare NFTs and means that the value of $Whale may rise and fall in line with the value of the collection held in The Vault.
SWAGG is a social token driven by community collaboration and creativity and is used as a community-based currency on the SWAGG network. Community members can buy merchandise, be in line for product drops and get access to the exclusive SWAGG House.
How are Social Tokens created?
Social tokens are built and created on other blockchain networks and are not individual currencies themselves. Social tokens can be created as sidechains on an existing blockchain like Ethereum and creators generally tend to choose a flexible blockchain that is easy to manage and that offers a low cost per transaction as well as fast processing times.
Where can I learn more about Social Tokens?
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Keyword: What Are Social Tokens?