CryptocurrencyIt was basically a blockchain-based solution designed as a means of international payment, asset and value transfer, and store of value. With the development of blockchain technology over time, the adventure of crypto money, which started with Bitcoin (BTC), moved much further with ‘smart contracts’ over time and started to offer a new experience with decentralized financial tools.
Social tokens (social tokens), on the other hand, stands out as a crypto asset that is growing rapidly in the crypto ecosystem and has a high potential to fill an important gap.
What is Social Token?
Social tokens; It stands out as a kind of crypto asset that a brand, community or an individual (such as an influencer or artist) can use to make money, collect donations, and support. Social media already hosts many artists, influencers, NGOs and foundations, and even acts as an intermediary for support and donation collection. When intermediaries that offer regular or one-time payments such as funds and donations are added to these social media platforms, we cannot say that this sector is not very new.
Social tokens come into play at this point and bring the ‘decentralized’ feeling underlying blockchain to this sector.
Social tokens come in two types: ‘personal’ and ‘creative’ tokens. These crypto assets are decentralized and secured by the blockchain. Its basic working principle is considered indistinguishable from crypto assets such as Bitcoin and Ethereum.
These tokens belonging to individuals or creators are actually a kind of ‘labor’ item that emerged as a result of the merger of money with the crypto world and has the potential to change the forms of labor. These social tokens can also be used as a way to reach a community. From this point of view, social tokens can be evaluated on the blockchain network like a ‘membership card’.
Although social tokens are pushing themselves to trend in late 2021, they’ve actually been around for a long time. For example, a platform called ‘Seed Club’ stands out as an incubation center for social tokens. A platform called Fyooz has a marketplace for social tokens. The Rally project, on the other hand, was built as a companion platform that enables token development and initiation and design of loyalty programs. BitClout; A platform that allows users to buy, trade or sell cryptocurrency based on celebrity reputation.
How Are Social Tokens Different From NFTs?
NFTs, which are popular in the cryptocurrency world, actually work as a player tied to the social token category. Social tokens and NFTs The fundamental var is the ‘interchangeability’ of assets. NFTs are known to mean ‘immutable tokens’ and therefore each NFT is unique. Social tokens are exchangeable.
Social tokens have a value like a currency, BTC, ETH. From this point of view, another FIAT currency or a cryptocurrency corresponding to each social token is always clear and subject to change. But with NFTs the situation is different and the value of an NFT table is unique and unique. From this point of view, it is relatively difficult to exchange because its value can vary according to the person and demand.
To put it simply, social tokens are a utility that provides all investors who invest in these assets with the same benefits, privileges, rights for a piece of art or a piece of music. NFTs, on the other hand, help an artist own the unique rights to a work, and everyone’s right can be unique.
How Social Tokens Work
A talented artist, influencer, comedian, theater actor, etc. person or persons can create a community with the help of social media. These communities, which are usually created through social media channels, can be taken to the next level with social tokens in the blockchain world.
For example, an artist, by publishing their social token, can both avoid using a center while getting their support, and offer unique content to their supporters. The person or people who believe in or want to support that artist can also support them by purchasing these tokens at an early stage. Depending on the popularity of the artist and the strength of the community, each social token that will be released may increase in value over time. As the community grows, more tokens can be issued and the value of the token increases.
What are the Benefits of Using Social Tokens?
Due to the fact that social tokens are located in the blockchain network, they can be constructed very differently and by providing a feature such as a ‘loyalty card’, a bond between the supporter and the artist can be established, increasing both sided incentives.
In addition, the presence of social tokens on the blockchain helps make all transactions transparent and non-intrusive.
Investors who support the artist can both access special content and make an investment while providing support.
The share of social tokens in Web 3.0 technology, which aims to eliminate or reduce centers, may be much more than expected.
Social Token Examples and Future of Social Tokens
Social tokens started to increase rapidly and started to be created by famous people and artists from many countries. For example, Greg Oden, who was previously in the NBA, published his token named ODEN, while the Friends With Benefits (FWB) team, which was formed by certain experts, released the token called Jump into Web 3.0 (JUMP).
The future of social tokens is very positive by many. Real Vision CEO Raoul Pal thinks social tokens will be the next big trend for cryptoassets and it could become a trillion dollar industry in 5-10 years.
“(Social tokens) The biggest thing I’ve ever seen, we all know how big crypto is, but within crypto, community tokens will change all business models,” Pal explained.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.