TechMag
The fact that blockchain technology is having disruptive effects across various industries all around the world is no longer news. The elimination of middlemen is one of these revolutionary consequences, and it has been gaining traction and is on track to disrupt numerous industries. The media and entertainment business is likely to be the first to be disrupted by the concept of social tokens. Content developers have always been at the forefront of the media and entertainment industries.
The interaction between these creators and their audience, on the other hand, has always been mediated by third parties with a degree of artistic control. This means that content authors are not directly compensated for their efforts. Social tokens are useful in this situation. They are a unique type of bitcoin asset whose value is determined by the fans’ passion. Content providers are poised to establish their own economies as a result of the introduction of these social tokens.
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What Are Social Tokens and How Do They Work?
Social tokens are a sort of cryptocurrency centered on a group, influencer, or brand. It’s a method for internet celebrities or personalities to commercialize their work without the use of third-party platforms or agencies. The present social tokens aren’t the first time producers have attempted to sell their work in history. Davis Bowie introduced the Bowie Bonds asset-based bond in 1997 as a way to securitize the profits from his previous albums, earning an estimated 7.9% yearly interest for the next decade. Prudential Financial reportedly paid $55 million for these celebrity bonds, according to reports.
Content creators can now create and reward their fan base while also compensating themselves for the creative work they provide on a regular basis thanks to social tokens. Imagine going to a news website to read the news and being rewarded with a cryptocurrency token. These social tokens resemble genuine (fiat) money due to their design and setup. Because there are a finite quantity of these tokens, demand will be great, and the value will rise. Furthermore, the developer can incorporate more advantages for community members, thereby garnering more admirers.
The introduction of social tokens into today’s internet space demonstrates the internet’s evolution from Web 1.0 to Web 2.0, and subsequently to Web 3.0, in which users are curators of their own content. Social tokens, like true Web 3.0 goods, connect content creators and consumers directly. Because there is no intermediary in the transaction process, it differs from the concept of celebrity bonds.
How Can People Make Money With Social Tokens?
People can profit from these social tokens in a variety of ways:
- They can conduct an action within the community by giving them tokens, which they can subsequently swap for ETH and then cash.
- People can keep the tokens they’ve earned and wait for them to rise in value before exchanging them for ETH and finally cash.
- Some social tokens allow their holders to make purchases with them. Certain products are virtually free for holders.
- Someone can purchase a social token for a price that he believes is less than the community’s growth. For example, if you discover a community with content you enjoy and feel others would as well, you can invest in the token early. Your token appreciates in value as the communities grow and earn more social tokens.
With Social Tokens, Large Non-Fungible Token (NFT) Collections
There are a number of NFT collections that feature social tokens; some of the most well-known are:
Whale
The Whale is a social currency network backed by non-fungible tokens that are both real and uncommon. Holders of Whale receive a specified stake in Whale Shark’s non-fungible token collection. The whale shark is a powerful collector in the NFT market who has a number of valuable works. There are currently 10 million Whale coins in circulation, valued at $330 million fully diluted.
Melon
Melon is a one-stop store for social tokens and non-fungible tokens. It is the first and only NFT platform designed specifically for content creators and their audiences. Melon, although being a relatively new player in the NFT market, innovates by introducing a new category of NFTs called as viral NFTs. Melon has set itself apart from its competitors in the market by mixing social media virality with the scarcity provided by NFT technology. There are no restrictions on how creators choose to monetize their material on the site. Melon’s mission is to bring together the best social assets from across the decentralized web in a single, easy-to-use interface.
Rally
Rally is a platform that was created to let creators and their communities develop their own digital economies. Creators can create their own social token that promotes transactions, access, and more efficient economic solutions. It is intended to stimulate fan participation in the creator economy by rewarding them with social tokens. Creators can use Rally to provide their audience access to secret groups and exclusive content.
How to Set Up Social Tokens for Creators
A community in the form of a blog, forum, or anything similar will be required by the creator. Once that’s in place, the inventor can create an ERC-20 crypto-token that can be exchanged for ETH, which can then be used for cash. When the token is created, the creator must specify how many tokens will be available to the community. Every token given out or purchased will be worth more than the one before it. As a result, the more tokens that are distributed to the community, the more valuable they become. This will be an excellent way to entice more people to join the community.
Social Tokens and Their Applications
There are three main ways to use social tokens:
1. To Gain Access
Some fans simply purchase these social tokens for the benefit of having access to them. For example, a band called “Portugal The Man” offers fans who buy 10 social tokens access to the band’s audio library, text and video chats, and other perks. Lil Yachty’s coin also receives gift parcels curated by his mum.
2. Medium
The usage of social tokens as a medium of exchange is possible. Fans can send tokens as recompense for creators in place of things like “tip jars” on some websites that are mediated by Venmo or PayPal.
3. As a Financial Investment
Because the token supply is restricted, demand will increase, increasing the value of the tokens. When a result, one can purchase the token early and then exchange it for the monetary equivalent as the value rises. Creators, on the other hand, can use payouts to supplement their income.
Conclusion
In the NFT and crypto sector, social tokens are unquestionably a new frontier. They turn the relationship between creators and fans into a two-way street. Content producers may be confident that the genuine value of their work will be realized without the need for third-party intermediaries who perceive them as “tools” rather than deserving partners. We’re only witnessing the top of the iceberg right now; the full impact of these social tokens will only become apparent over time.
