A social token (fan token) is a blockchain token that is sold or issued by a content creator. A social token is a contract between a holder and an issuer that gives the holder certain privileges and access. Social tokens typically offer exclusive content or experiences from the creator.
Influencers can use social tokens they have released in two ways: to increase and encourage their fan community and to reward themselves for personal creative work. Some social tokens even offer royalties or a percentage of the creator’s income. Tokens are sold in secondary markets, where the price fluctuates depending on the demand for the issuer’s content.
Fans buy social tokens (fan tokens) to get the opportunity to interact and support their idol. It can be a closed party, a personal workout, a personal meeting, an autograph, a joint game on a console, merch, and much more. There are different levels of token ownership, opening up various exclusive benefits.
Social tokens are a broad category that also includes cryptocurrencies, non-interchangeable tokens (NFTs), and management tokens. Social tokens are interchangeable, unlike NFTs. However, some NFT collections offer social features that can sometimes make this distinction blur.
The Rise of the Influencer Economy in the World of Crypto
We live in the digital age and the age of social media when our worldview is largely formed from the flow of news and opinions from influencers. Brands have long shifted advertising budgets to content creators who promote products and services to millions of young subscribers on digital platforms. The media figures now create personal brands, and communities and monetize their products.
However, the ability of creators to monetize their products and receive a fair portion of their labor-intensive income has long been limited.
Social tokens have made it possible for content makers to work without an intermediary, independently regulate the cost of their products, while maintaining full creative control, and also offer special goodies to their fans or community members.
Such transparency in the economy is also supported by followers. People are more willing to pay directly to their idols, and not to third parties. Therefore, the market for social crypto tokens is also growing.
Since social tokens are issued in a limited number, growing demand increases their cost. The creator can add benefits for community members by attracting even more fans, and the naked eye can see how the segment is attracting more users
Types of Social Tokens
Social tokens mainly consist of three types: creator tokens, community, and platform tokens.
- Creator tokens are digital assets created and issued by individuals. They represent a stake in a person’s project, enterprise, or success. This is a tokenized representation of the reputation, skills, or work of a particular individual. It can be used to monetize content, skills, or time, and their holders receive some privileges.
- Community tokens are similar to personal tokens, but they are issued by communities, groups, or organizations. They represent a stake in group projects, ideas, or the success of an entire community. Holders of such tokens can also receive certain privileges, such as voting rights in a decision, access to exclusive content, or participation in community profits.
- Platform tokens: Some decentralized applications (dApps) issue “platform tokens” to incentivize participation on their website. Often, people use platform tokens to tip content creators, vote on governance proposals, or pay for products and services.
Important Social Tokens
Let’s take a look at some of the most famous and important social tokens in the crypto space.
Steem is a cryptocurrency that rewards users for building a community by hosting and rating valuable content for others.
Its main platform, Steemit, is a social network built around the Steem blockchain. The main concept of this social network is the development of a stable, well-protected platform for making money on content without any censorship. This feature attracts an increasing number of users, tired of unreasonable blocking on Twitter, Reddit, and Facebook.
There are three coins in the system:
- Steem. The main token of the platform is traded on cryptocurrency exchanges, available in exchangers, and has strong volatility. This coin pays part of the reward for activity in the project.
- Steem Dollars (SBD) It is a kind of stablecoin. It has a lower value threshold of 1 USD. This token also pays for the work in Steem. Since it has a constant course, SBD guarantees stable earnings for project enthusiasts even if the main token becomes much cheaper.
- Steem Power. The greater the user of these tokens, the greater his reputation, weight on the network, and profit. SP is charged 15% per annum. They can be bought for Steem and SBD.
One of the notable success stories in the Steem ecosystem is the story of @ned, also known as Ned Scott, the co-founder of Steem. @ned played a pivotal role in envisioning and building Steem as a platform that rewards content creators. His vision has attracted a vibrant community of users and content creators, positioning Steem as a leading blockchain-based social media platform.
In his blog post (The Story of a Successful Blogger), @ned shares his journey as a blogger and how it led to the creation of Steem. It serves as an inspiring example of how blockchain technology can empower content creators.
ALEX is a prime example of a personal crypto token that single-handedly attracted many people to the space. This token has attracted so much attention and has a very interesting history.
Its creator is Alex Masmej. Previously, he has already become famous for creating Showtime – a decentralized social network for digital artists. He raised $20,000 through “ALEX’s initial offering,” a method of monetary support for his move to San Francisco to pursue a career in cryptography.
The ALEX token is “a mix of a small revenue-sharing agreement and an IPO.” The revenue sharing agreement scheme itself is quite busy: 15% of all revenue that the creator of ALEX receives over the next 3 years (maximum $100,000) is distributed between token holders each quarter. The token also gives its owner the rights to 1:1 meetings, access to his network, and even manage some of his life decisions.
WHALE is the most successful social token to date. And now it is quite clear why this happened. The WHALE token was launched by WhaleShark in May 2020 and quickly became the dominant social token. It even reached a market capitalization of $30 million. Now WHALE is a whole ecosystem and community. Such successes are incredibly impressive, especially given the fact that the project began with one person. What distinguishes WHALE from other social tokens is that its value is supported by a large collection of non-interchangeable tokens (NFTs) that are stored in the so-called “Vault.” The vault contains NFTs totaling $1.4 million (as of September 2020).
As part of the project’s community-driven ethos, WHALE holders are entitled to special platform-specific benefits, including the ability to:
- Rent NFTs from The Vault
- Purchase selected NFTs from The Vault
- Purchase exclusive NFTs only sold for WHALE
- Participate in WHALE liquidity mining to receive rewards
- Purchase exclusive physical and digital WHALE crypto merchandise
- Vote in the project’s DAO and drive Whale community blockchain governance
- Access exclusive membership channels offering games, NFT airdrops, WHALE airdrops, networking opportunities, and lines of communication with WhaleShark
Future of Social Tokens
Social tokens are definitely changing our usual perception of social networks, taking us to the Web3. With them, we are approaching a greener system for content creators to interact with followers, making the latter co-owners or even partners in a digital product.
If we talk about personal tokens, then the function of creating and subsequently attracting a large audience makes the issuer himself a major figure in the market. However, how long the unique brand will last, and how long the influencer can hold its audience is a question.
Platforms like Steemit or WHALE seem more viable. The principle of economic participation attracts holders and crypto enthusiasts in the pursuit of a precious future of Web3. Enabling users to participate directly in a community or platform economy, thereby earning tokens for their activities, government involvement, or investment in the projects and communities they support – social tokens here will only strengthen the loyalty of community members. Also, social tokens are becoming an alternative means of financing start-ups and small businesses.
This sector of the crypto market is developing, and it seems that social crypto tokens are a solid step of a direct, but long bridge in Web3.