What are social tokens and how do they redefine value in the creator economy?
Social tokens are digital assets issued by creators to monetize their content and engage with their fan base.
They exist on smart contract blockchains and can be used to access special community-oriented services.
Social tokens are redefining value in the creator economy by providing a new way for creators to receive compensation and engage supporters.
What are social tokens?
Social tokens are a type of digital asset issued by creators, such as artists, musicians, and influencers, to monetize their content and build a Web3 ecosystem. These tokens are not exclusive to high-profile celebrities; any individual or brand can use social tokens to engage with their audience.
Social tokens provide a novel revenue stream for creators and provide benefits and loyalty acknowledgments to their fans. The goal of social tokens is to benefit both the content creators and their fans as the creator's popularity grows.
How do social tokens work?
Social tokens exist on smart contract blockchains such as Ethereum, Polygon, or Solana.
Before a creator launches a social token, they typically promote it to their fans. When the token hits the market, anyone can acquire it on various platforms. Social token holders can store them in a compatible digital wallet and use them to access special community-oriented services.
For example, some social tokens allow holders to visit private chat groups or access exclusive merchandise. Social tokens may also double as "governance tokens," empowering community members to vote on upcoming projects and changes.
The three main types of social tokens
Although social tokens are a new phenomenon, issuers have already developed three primary categories of use.
Creator tokens, which are linked to one person and grant fans access to exclusive content.
Community tokens, which are used for decentralized governance and allow holders to participate in decentralized autonomous organizations (DAOs).
Platform tokens, which aim to encourage participation on certain platforms.
Are NFTs the same as social tokens?
While NFTs and social tokens share many similar features, there are important differences between these digital assets. Most significantly, NFTs don't trade 1:1 on the digital asset market. Since each NFT has a unique blockchain address, they are considered "virtual collectibles" rather than digital currencies.
The exchange rate for an NFT isn't as clear-cut as for a fungible social token. NFTs can represent any form of digital media, while a social token will always be a digital asset with a clearly defined exchange rate.
Why are people using social tokens?
Social tokens provide companies and individuals with a new way to receive compensation and engage supporters. They help individuals and companies offer rewards for their community’s support, allow fans a voice in the online community, and provide a steady compensation flow for creators. As a fan community grows, early adopters could receive acknowledgments for their loyalty.
However, like many digital assets, the legality of social tokens is unclear, and they may be a prime target for digital asset scammers.
