Crypto Global

Social Tokens - Potential growth opportunities for brand companies?

Apr 27, 2021

After DeFi and NFT, the next level of Web 3.0 is paving the way with Smart Money and Social Token. In this newsletter we would like to explain what social tokens are.

A social token represents a fraction of the intrinsic value of a community, a brand or a person. For example, you can tokenize yourself as a person and have it monetized accordingly via a smart contract. In other words: an artist, athlete or influencer can bring out a token, which then brings something in return with it in some form and form. So it is a form of property economy that enables participants to deal with the growth path of the community and to have the potential to help shape this course as well. Probably the most obvious use of a social token is the reward mechanism: community members can buy tokens to support a token creator, or the creator can offer tokens as rewards for strong community members. Because of the reputation that the token creator has, one would like to be able to make money by quantifying the range with that token and ultimately making it tradable. In contrast to NFTs, where you make creative products, you want to use social tokens to interact with and build the community.

Social tokens undoubtedly have enormous value potential. However, such tokens are highly dependent on the market environment - the prevailing sentiment. As soon as the "relationship" with a token is out of whack and the token itself is the only one who rules over market sentiment, interest and engagement, we no longer think that it is a social token. It is then just a speculative asset that is likely to take the same path we saw with altcoins in the Bull Run phase in 2017/18.

Ultimately, we believe that brand companies or famous personalities now have the option to use social tokens either as exclusive community access or as perks and benefits for members only. We'll likely see a lot of new tools, platforms, and collaborative activities in this area soon.