It is no longer a secret that social tokens have entered the crypto market and are beginning to make waves. Social tokens, also known as tokens, backed by an individual’s, brand’s, or community’s reputation, are gaining traction. Some believe they could be the next big thing in the crypto world.
It is a method for internet groups or celebrities to monetize themselves in ways other than traditional means. The use of social tokens to satisfy the need of artists to find new ways to monetize their work during Covid-19 has undoubtedly catalyzed this increase in interest.
A brief history of social tokens
Before digging more into the subject, it is worth remembering that David Bowie made the first attempt to directly monetize his work in 1997 when he issued an assets-based bond protecting the profits from his previous record. Mike Merill, a 30-year-old part-time entrepreneur who wanted to sell himself on the open market, made the second try in 2008.
However, as technology evolved, various firms and individuals released ICOs that generated coins for projects in the mid-2010s; they were promising ventures, but their off-nature and doubtful legitimacy harmed their image. The social tokens are more proof of the internet’s progression from Web 1.0 to Web 3.0, where users may build their own content.
Social tokens explained
The need for artists to discover new methods to monetize their work has undoubtedly accelerated growing the interest in social tokens. Over the last decade, platforms ranging from YouTube to Spotify have grown in distribution capacity and increasingly compete with their own original content.
This might motivate creators to create a media that allows for Direct-to-Consumer interactions, allowing them to communicate with fans on their own terms. Aside from that, they may be distinguished by three categories of tokens, also known as personal, community, and social platform tokens.
- Personal: As the name implies, these tokens are produced by persons who issue and manage them.
- Community: These are used to acquire membership or access the services and goods provided by communities; the value is determined by the community.
- Social platforms: Platforms that support the issuance and trade of social tokens are known as social platforms.
Aside from their significance, social tokens have three primary applications that may be used:
- Purchase: Fans and enthusiasts may now purchase tokens for access to the features that come with the social token.
- Exchange: The coins can be used as a kind of payment.
- Investing: Because the quantity of tokens is limited, increased demand raises their value. Fans may redeem coins as an investment, while producers can potentially get pay-outs to supplement their income.
Social token platforms
In terms of social token initiatives, they are more than anyone can imagine. Some platforms may provide social tokens and operate independently. Still, QUID Token, Solana’s first social SPL token, is the most liquid digital asset on the Solana blockchain, second only to SOL itself. How can they accomplish this liquidity?
All initial liquidity given by the QUID Token Foundation in any of QUID’s liquidity pools will be locked in perpetuity, and all liquidity fees generated from the pools will remain and accumulate in the pools forever. Accordingly, whether QUID moves up, down, or sideways, its liquidity will improve with each trade.
Furthermore, QUID’s ever-increasing liquidity makes it an excellent store of value for holders and the best utility and social token for developers wishing to use a local currency in their DeFi and other decentralized applications.
Another example is the Roll network, which mints branded digital tokens unique to the online presence, letting users own, control, and coordinate the value produced by users across platforms. It is sometimes referred to as branded tokens social money.
It uses the Ethereum blockchain to manufacture each token following the ERC20 standards. Using the Ethereum blockchain, people may create social money managed by them and their community rather than the network.
STEEM is a social token introduced in 2016 by commercial operation and was the first app to launch on the Steem blockchain. Steem coins are native cryptocurrency tokens that operate on the blockchain. Smart Media Tokens may be created by web application developers as native digital assets to offer incentives for users to engage in the platform and help it flourish.
Why do the Social Tokens matter?
The point with social tokens is that they are an original approach of rewarding producers whose work entertains, educates, or informs others. Creators may adjust their engagement with followers in this way, and fans can put a monetary value on their dedication.
With the blockchain, start-ups can more easily identify and reward their greatest followers. Similarly, with token-related feedback, creators may customize their work to increase connection and community. The function of each social token differs based on who produced it and why.
It is a new form in which artists, creators, and others may deliver more happiness to their audience while also giving themselves a new source of money.
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