How Social Tokens Are Helping Influencers Build their Own Blockchain?

Social tokens are helping influencers by increasingly being used in online blockchain communities

Social tokens aren't creators' first efforts to directly monetize their work. In 1997, David Bowie issued Bowie Bonds, an asset-based bond that securitized the income from his earlier albums, paying 7.9% annual interest over the decade to 2007. Prudential Financial paid $55 million for these celebrity bonds. In the mid-2010s, some companies and influencers issued initial coin offerings (ICOs) that raised crypto for projects. ICOs were a promising idea, but their one-off nature and dubious validity tarnished their reputation. The crypto world is going through a transformative chapter that is bound to revolutionize how the internet works and how online communities interact, and social tokens are at the heart of the latest inflective developments. These days social tokens are helping influencers to build their own blockchain.

Their rise comes at a time when transactional frameworks, such as Web3, are gaining popularity, especially among crypto enthusiasts.

Social tokens support the democratization of social networks by enabling brands. Social tokens help influencers and businesses to create and monetize their own online communities using blockchain technology.

Daniel Nagy, vice president of Swarm — a decentralized data storage and dispensation firm — spoke to Cointelegraph regarding the new token class, stating that social tokens had significant disruptive potential.

"If done right, they can take communities to the next level, and it's only a matter of time before we see more innovation in this space, most likely related to DAOs or GameFi, combined with ideas around so-called 'soulbound' tokens," he said.

"Right now, the space is still in its early stages, and experimentation is key, but as adoption grows, social tokens can become the next bridge to non-crypto users and bring blockchain further into the mainstream, similar to what NFTs have done."

He also highlighted that the tokens would be especially impactful for burgeoning companies that are still in their growth phase due to the need to capitalize on a loyal fan base.

What are the Benefits of Social Tokens?

Unlike crypto tokens, social tokens in Web3 mainly derive their value from the reputation of the content creator, and from the exclusive benefits that token holders receive in the form of engagements and experiences.

For instance, upcoming artists can launch a social token to offer a highly personalized experience to their followers. When the followers buy the token, they contribute to funding the artist, and receive exclusive benefits such as early access to music albums, the opportunity to engage in live Q&A sessions, invitations to special events, and private meetings. As the value of the token rises, both the artist and the follower benefit.

From a business perspective, social tokens in Web3 can prove a goldmine. For startups, they're an ideal source of funding and improving fan engagement. For well-established businesses like Coca-Cola and Apple, it's a perfect opportunity to enhance brand value by giving token holders early access to privileged content and new products. Since the amount of tokens is limited, rising demand increases their value.

People often think that brands can achieve similar results through a subscription service. While this is true to a certain extent, social tokens hold monetary value, which can increase substantially with time. In addition, users can exchange them among themselves or give them to others. This tangible nature makes them different from typical online membership schemes.

Social tokens for building Blockchain

When deciding to use social tokens for building blockchain, there are many considerations that need to be made before you actually get to the building process. Below you can find a list of just some of those considerations you should research prior to getting your project off the ground. Keep in mind that while they are numbered, they may not be in the order in which you should work on them. That will depend on your project and your situation.