You’ve heard of cryptocurrency and digital coins – but what about social tokens?
Social tokens, a.k.a. community coins, can be a valuable tool for upgrading your marketing campaigns and are only just beginning to generate some serious attention.
Imagine, for instance, your website and blog wanted to offer a premium subscription. You could give customers the option to buy a social token for access to exclusive content and premium-only groups.
Today, I’m going to discuss exactly how social tokens could influence the marketing world.
Single Grain enables us to increase our impact without increasing our headcount
Single Grain enables us to increase our impact without increasing our headcount
What Is a Social Token?
A social token is one kind of blockchain token, along with NFTs and cryptocurrencies, that serves as a contract with special access or royalties when it is sold to someone by a content creator. Social tokens are sometimes referred to as community coins, personal tokens and creator coins, and are secured by the blockchain and decentralized, just like Bitcoin.
Throughout the years, I’ve built an active portfolio full of different marketing businesses and discovered a number of interesting tools for advertising as a result.
Social tokens are just one such example. These tokens come from the concept of cryptocurrency, so it’s little surprise that as demand for cryptocurrency and NFTs rises, social token interest increases, too.
There are two versions of social tokens available right now:
- Personal tokens
- Community tokens
To better understand how personal social tokens work, let’s take a look at a scenario with a character named Alex.
Imagine Alex is trying to raise $20,000 to go on a trip to San Francisco where he can build his cryptocurrency portfolio. He might offer to do services for people, consult with professionals or give them special access to a newsletter he offers. To access these services, all you need is a token. A single personal token equates to enlisting the services of someone.
In some cases, you can even do things like income share agreements (ISA). Think of an ISA as similar to a student loan, except that “you pay for your higher education after graduating and finding a job, not while you’re still enrolled. You then pay a fixed percentage of your salary over a certain period or until you reach the amount you’re required to pay back.”
So imagine that someone comes out of college and you invest in them. In exchange, they might promise you up to $100,000 of their earnings. You would purchase a kind of “token” from the person with your investment, which you can exchange for income later.
Are Social Tokens the Same as Cryptocurrency?
Examples of Personal Social Tokens in Practice
Social tokens aren’t actually the first example of a creator’s attempt to monetize their work in a new and interesting way.
David Bowie famously released a solution in 1997 with Bowie Bonds – the asset-based bond that securitized the income from previous albums. In the middle of the 2010s, some influencers and companies also issued initial coin offerings to raise crypto for projects.
Right now, I’m starting to see a number of examples of social tokens in action. Lil NAS, for instance, launched a social token named “NAS.”
Imagine, for instance, you had created a thousand of these tokens, each worth around $100, before Lil NAS had his first big hit. They might not be worth a lot to begin with, but as interest in Lil NAS increased, the value of the tokens would, too. For instance, Lil NAS could ask for hundreds of thousands of dollars in investment in exchange for a token that allows users access to backstage passes.
Ultimately, people are buying more than just the “token” per se; they’re investing in the value of the person, and the idea that the demand for their tokens will increase over time.
It’s similar to investing in cryptocurrency with the idea that you’ll eventually be able to sell whatever you buy for a higher amount later on. The case of Lil NAS is an excellent example of what a “personal” token might look like – but what about a community token?
Social Tokens and Community Tokens
Community tokens work a little differently. Content creators are largely using “community tokens” as a method of reinforcing their personal brand and building their fan base. Most frequently, fans buy tokens, but some artists will also give them away to loyal fans, like musician and record producer RAC is doing with his community token $RAC.
Community tokens give exclusive benefits to fans with token access. You might get access to a special discord channel, for instance, or you might have initial access to a special event. Ultimately, you’re buying into a “community” and showing your support. I’ve even seen some creators offering different levels of tokens which come with various benefits.
Another term for the community token is the brand token.
For instance, Nike or Coca-Cola could give away community tokens to people who want to be the first to know about a new set of sneakers or a new beverage. As with cryptocurrency, because the amount of tokens is limited, rising demand increases their value.
Social tokens are often ideal for start-ups because they encourage initial investment from fans, and get people engaged with your business.
Examples of Community Social Tokens in Practice
Take a look at the “Swag” finance website and you’ll see a great example of a community token:
Swag tokens are multi-faceted social tokens focused on the “Swag” community. The founder of the company, Carlos Gomez, says that the goal of Swag is to cultivate and expand passion in the world of crypto culture, collaborative creativity, and community.
If you get a swag token, you get access to a “swag drop.” This “drop” can include a wide range of things, such as NFTs, project access or links to special creations being made. You can also get “voting rights” for the community, which allow you to determine exactly what kind of incentives are available, and what the overall community does.
So, if you have more tokens, you have more of a say than other token holders. You can even propose voting action with 10,000 tokens. What’s more, because the value of the token increases as interest in the community increases, you’re encouraged to get people talking about the token as much as you can.
Some types of community social tokens might include:
- Access: Fans can simply buy tokens for the access they provide. For instance, holders of Lil Yachty’s coin or token will get handmade boxes and gift packages from his mother.
- Exchange: Tokens, like cryptocurrency, can be used as a medium of exchange. Instead of the tip jars provided by PayPal and Venmo, which take a portion of earnings, fans donate a token to show their support of the creator.
- Investment: With a limited token supply, you can rest assured that the value of your coins will increase over time. Fans can eventually redeem coins and treat them as an investment.
Using Social Tokens as a Marketing Tool
So, what does all this mean from a marketing perspective?
This is something I’ve heard a lot of people asking about recently. I really think social tokens are likely to be an element included a lot in the modern decentralized world.
You could have big companies like Coca-Cola stepping into this region, for instance. However, from a legality standpoint, it might be harder to launch these tokens because of all the red tape around a bigger enterprise.
Alternatively – and I think this is where a lot of the opportunity will lie – you can launch a token as a start-up company instead.
Basically, launching a token as a start-up means you get a lot of brand ambassadors talking about and building your brand.
You’re going to end up with an army of people supporting you, and you’re building this kind of ecosystem around your organization, essentially from the moment you implement your token strategy. It’s basically like creating your own currency to support your brand.
Kind of like selling stocks or shares in your business, as your brand becomes more valuable, the currency becomes more valuable, too. The more interested people are in your company, the more they’ll be able to participate in the community you’re developing, or invest in you and the services you can offer (in the case of personal tokens).
Whether you’re building a personal brand or a business, you’re essentially giving people a way to get involved with the growth of that identity – outside of buying your products and services straight away. People can benefit right away, such as from access to special features only available to token holders, and they can also benefit later, from selling your tokens.
Will Social Tokens Transform Marketing?
Social tokens provide creators with a valuable way to reach their market like never before. You immediately engage your audience and make them feel special with something that’s unique to them, such as access to a special feature or a forum only those customers can access.
Issuing social tokens also encourages your audience to help your brand grow, because they want the value of their tokens with you to increase over time.
Ultimately, you’re helping to encourage word-of-mouth marketing and genuine customer loyalty, even before people buy your products or services. At the same time, you’re incentivized to continue growing your brand and delivering a great experience to your audience because you want to make sure the community continues to thrive.
I believe this will force the creator to think long-term, then force the community to think long-term at the same time. As Charlie Munger likes to say, “Show me the incentive and I’ll show you the outcome.” I think social tokens are a great way to get started with that kind of marketing.
Social Tokens and Web 3.0
A quick word on the relationship between social tokens and web3:
Web 3.0 (also known as web3) is the third iteration of the Internet that interconnects data in a decentralized way to deliver a faster and more personalized user experience. It is built using artificial intelligence, machine learning and the semantic web, and uses the blockchain security system to keep your information safe and secure.
The difference in internet iterations is:
- Web 1.0 is a read-only web where people can read information written on websites.
- Web 2.0 is a read-write web where people can read and write content on websites and applications.
- Web 3.0 is a read-write-interact web (powered by artificial intelligence) where people can read, write and interact with content, including 3D graphics, on websites and apps.
Web 3.0 is all about interactivity and decentralization, and social tokens are basically a product of this since they connect the content creator directly to the buyer.
A New Era for Social Tokens
Both in their personal and community format, I think social tokens have a lot to offer. Countless personalities have already begun working with these tools, and I think the number of interested parties will only continue to increase.
If you’re looking for the best way to monetize your creative business, then a social token could be the perfect thing.
This topic originally appeared on our Leveling Up YouTube channel, where you can find tons more videos on all things digital marketing, like SEO, content marketing, NFTs, web3, paid media, email marketing, growing your business, and much more!