Social tokens — or tokens backed by the reputation of an individual, brand, or community — are gaining traction and some believe they could be the next big thing in the cryptocurrency community.
But what are they, and why are artists, musicians and social media influencers rushing to tokenize their efforts in order to gift, or sell them, to followers?
Social tokens are a little different to the slew of DeFi liquidity farming tokens that have appeared over the past couple of months. They are built around an “ownership economy” principle with the premise that a community will be more valuable tomorrow than today.
Creators can monetize their work as an non-fungible token (NFT), or social token, and supporters can give something back to show their loyalty. Influencers minting their own tokens to offer them as rewards, or sell them for additional revenue.
Cooper Turley from Audius explained in Bankless today:
”Social tokens provide a means of not only sharing financial upside with their favorite creative but also enables tiered, tokenized access based on active contributions.”
For example, artist Laura Driskill runs a popular Instagram channel and produces Autonomous Sensory Meridian Response (ASMR) videos to aid in relaxation and sleep. She has now created her own ERC-20 social token called TINGLE for her followers to buy in exchange for further interaction or purchasing merchandise.
Grammy award winning artist RAC, aka André Allen Anjos, has just announced a token created with Zora, a platform for artists, creators, and brands to craft their own markets. The token will be distributed to subscribers of various associated platforms and used to unlock access to various perks and exclusive content. RAC stated:
“Crypto enables communities to capture the value they create instead of being monetized by preexisting platforms and $RAC is an active experiment pushing the envelope on these primitives.”
A startup based in New York called Roll has taken things a step further by offering to mint Ethereum-based branded digital tokens, or “social money”, for influencers and creators.
There are around 160 social tokens currently offered on Roll and the number is growing as everyone from rappers to NBA stars to entrepreneurs experiment with this latest method of monetizing content and incentivizing community loyalty.
Tokenomics vary depending on the objectives of the creator but they all have one thing in common; participants all have financial exposure and share in the growth.