Cryptocurrency and NFTs are the major players in the blockchain game. People are into crypto trading, NFT treating, collecting rare digital assets, decentralized financing, and many others. Blockchain is dominating every industry and web 3.0 is making the pathway for numerous opportunities. In that list, Social token development is getting its fair share of attention from creators, communities, and blockchain enthusiasts globally.
Wondering what is a social token and how are they different from Non-fungible tokens or cryptocurrencies? Non-crypto businesses are using these tokens to communicate with their community better. Here is a complete guide you must read on social token development.
Understanding social tokens
Digital content creators and artists are using NFTs as an effective way to monetize their creations recently. This is not only giving them an income but also a credit to their work. Though NFTs started getting the hype in early 2021, creators are moving towards social tokens after exploring blockchain technology.
People see social tokens as a way to eliminate the third-party barrier in monetizing their skills and content that also brings a new principle of ownership of the digital economy.
Social tokens are tokens minted on the blockchain which is of ERC 20 standard. ERC 20 tokens are fungible in nature, that is one token is the same and has equal value to the other. They are tokens that are minted on the blockchain just like NFTs and cryptocurrencies but they do not fall under these two categories.
How do social tokens differ from NFTs?
Let us say you are a creator with a huge fan base. You somehow want to monetize your special works by launching them to the fans with paid exclusive membership. You can do that with social tokens. These tokens are similar to membership cards to an exclusive community. This is a profitable way where non-crypto businesses can make use of blockchain technology.
When it comes to NFTs, they are unique tokens that do not have a token that is of the same value. But Social tokens are Fungible and can be exchanged. They are not similar to cryptocurrencies either, because the value of a social token increases only when there are new tokens come around. For example, if a celebrity is releasing a set of social tokens for one particular cause this month and another set the next month, the value of old tokens increases.
Types of social tokens
Blockchain technology is opening up a wide range of opportunities to non-crypto businesses through social tokens. A social token is a decentralized way how celebrities and businesses can reach the crowd eliminating the barriers created by social media today.
There are two types of social tokens, they are creator tokens and community tokens.
- Creator token- It is a token that is suitable for individuals who are celebrities, independent artists, and entrepreneurs. It is also called personal tokens. They are used to give exclusive content or service to a targeted community.
- Community token- This creates businesses and fandoms to give access to a closed community.
Community token development has already started surging in many places around the globe. Several communities are operating already like Swagg, FWB, Mork, etc.
How do non-crypto businesses use community tokens?
When a business needs a decentralized network for its operation, it is opting for blockchain technology. They develop tokens or coins on the blockchain as a pass for their customers to get the product or the service. This was restricted to businesses that have the necessity to use the blockchain. But now, this case has been changed with the emergence of the social token.
Social tokens or community tokens are premium access to exclusivity and can be used by non-crypto businesses. Their service or product need not be based on blockchain.
As mentioned earlier, there are communities that started using social tokens. An NFT community is using a social token where the community members can rent, buy, and sell exclusive NFTs from the vault. While this is not restricted to blockchain-based communities alone.
How do communities benefit from Social tokens?
When people get hold of a social token, they are not just putting their money on meaningless membership cards. This does not only open a gateway to premium content but also opens up an investment opportunity.
Just like other tokens on the blockchain network, the value of social tokens also increases when there is a surge user base or a limited number of tokens creating a demand for the tokens. Thus early buyers of the tokens can benefit by leveraging these tokens and earn a better price out of them later.
Communities can get access to community tokens through various means, that are not necessarily a direct buy in the platform. People can acquire social tokens in many ways like winning in a giveaway, purchasing a specific product through pre-order, etc.,
Key takeaway
As digital assets like NFTs and Cryptocurrencies are emerging, social tokens are already playing an important role in the blockchain ecosystem, with widespread adoption among artists and celebrities. Social Token development for your community on a futuristic approach will bring your exclusive community the best as it could with blockchain. As technology evolves, social tokens will accept by larger communities, such as large publishers or online communities centered on products or brands. Furthermore, they have enormous potential to reshape the way businesses generate targeted business opportunities.