While cryptocurrency phenomena like Bitcoin, DeFi and NFT are being discussed on a daily basis across all walks of life, a whole new class of tokens have also seen a rise to prominence. Social tokens, which are blockchain-based tokens used to connect entertainers or social media influencers with their followings, are showing us exciting new ways to access and monetize content creation across digital media platforms. These so-called social tokens have increasingly been developed and used for some years now but are now catching the attention of many thanks to improved utility and ease of access.
From Merchandising to Minting
Slapping on your brand to daily life items that people can use is an age-old tactic of promotion. T-shirts, coffee mugs and stationery are just a few examples of how brands create a merchandising system that not compels people to buy the stuff, the stamped logo creating value.
While this is a time-tested method of keeping customers (and fans, when it comes to media celebrities) connected and feel loved, times are changing. You can brag to your friends about your experience of attending the last Backstreet Boys event while you sip your java from the official BSB coffee mug you bought during the concert, but that’s pretty much all it can do for you. The mug will not appreciate in value (unless it is of a very rare kind) and will not help you get cheaper tickets or better seats next time.
But what if there was a way to further reward this kind of loyalty? This is where blockchain and cryptocurrencies come in to change the whole scenario.
Brands are increasingly tapping into the crypto-verse and launching their own custom tokens. Be it a music band, sporting league or even banks, everyone has a chance to launch crypto tokens to capitalize on their brand following, and many have been doing so for some time now.
Designed to offer different benefits to their users, this type of token has become easier to develop thanks to larger adoption and crypto acceptance. Another advantage for them is the ability to directly interact with fans and customers, bypassing intermediaries that would otherwise not only slow down the process but eat into profits.
Social tokens have given firms, bands and anyone the ability to capitalize on their following, creating communities that are geared towards accessing offerings easily.
How Social Tokens Work
Social tokens are more than just digital merchandise. Instead of merely having merchandise, fans or users holding these tokens are empowered through two channels:
- Loyalty: Fans get to prove their loyalty towards the brand by buying their tokens. Their commitment is rewarded in many shapes, including exclusive access to new services, the ability to meet like-minded people on the platform and interact with the brand, as these tokens would serve as “qualifying tickets” or even currency to access these loyalty benefits.
- Financial: Apart from the ability to tap into the fandom, social token holders gain a lot in terms of financial potential. Other than immediate cost-saving benefits of discounts on purchases or preferential rates, users can also speculate on increasing demand for these tokens and can sell them on the free market for a price higher than what they paid for them.
Brands have huge benefits from using social tokens too. Built on blockchain technology, token holders can purchase products, services and other merchandise directly, without the need of going through other merchants or middlemen. With the supply chain cut considerably short, this results in higher profits for the brands. Often, social tokens return some of these profits or savings to their users as well, making it a win-win situation for both the brand and their following.
The best part? Social tokens can be used in any way like ordinary cryptocurrency. People can spend these within the social ecosystem, hold on to them as value rises, or further leverage their value by using them to provide liquidity to decentralized finance (DeFi) services and products, earning a share of revenue from those. In the field of collectibles or memorabilia, even non-fungible tokens (NFTs) can be turned into social tokens, allowing people to digitally manage ownership of rare items, events and memories.
While some may argue that social tokens have nothing concrete to offer at large, relying on temporary hype and influence of brands, technically, they are not much different from any other crypto token. And, much like Bitcoin in the beginning, these tokens have little to back them other than the social acceptance from its users that assign a value to them. So why should engineered social tokens be any different?