Web3 movement is rapidly changing the internet game, sweeping traditional data ownership and value patterns.
Social tokens have been on the rise since 2020 and are among the innovations stemming from the web3 revolution, as they offer content creators, artists and businesses new ways to access financing and interact with communities. Whether it be writers, artists, musicians, or thought-leaders, creatives are coming up with more and more uses for social tokens, creating societies where everyone can participate.
While large content platforms enjoyed increased traffic and and stronger positions with the advent of COVID, many creatives have been limited in their ability to monetize their work. As well as raising funds for a good cause, social tokens prompted with the hope more interaction models would be open, both for them and their communities.
Social tokens— fungible or non-fungible crypto-assets which underpin social applications and interaction—have been around since 2020, but they took off in popularity when artists such as Alex Masmej, a young french entrepreneur, sold its own $ALEX token for thousands of dollars allowing holders to freely define his daily activities. Another example is the Bankless token, a specialized media that tokenized member badges giving them access to perks. In a world where tokens are already forming the foundations of the next digital economy, we are likely to see dozens of projects leveraging social tokens in their own way.
Despite every centralized platform having its own advantages, these platforms tend to stand between creators and their communities, locking them in with control on value flows. The looming innovation with social tokens will help creators regain power over their work by baking value and community interactions into code (Smart Contracts).
The potential of social tokens is endless, but many spill into four main "families" with distinct objectives and characteristics.
Community tokens allow groups to organize around common objectives. They are often well suited for decentralized autonomous organizations (DAOs), both to reward contributions to the community and serve as a governance token. Applications include informal clubs, media platforms and social networks.
The Steem Power (SP) token is one example of a community token geared to paying creators for the quality and reputation of their content.
Creator tokens can be thought of as fan club coupons, where fans are given multiple benefits and have access to specific content. Companies like BitClout, Roll and Rally have created tokens that allow fans to invest in creators' success. If a fan buys a creator's token, they'll reap benefits too if that creator becomes a superstar.
Personal tokens are issued by individuals looking to leverage their reputation, time or skills. Alex Masmej, mentioned earlier, was one of the first to create a personal token by introducing a revenue-sharing agreement with holders. Digital product designer Matthew Vernon also created a personal token named "BOI” which can be redeemed for 1 hour of design work.
Brand tokens are social tokens that are backed by the reputation of a brand, an individual or a community, generally working as loyalty point systems. Today, the benefits of a brand owning its own social token are numerous, encompassing everything from engaging customers to increasing loyalty, sharing value, and ultimately combating counterfeit.