In this article, I am going to talk about an emerging trend in blockchain technology that can disrupt pretty much every consumer-facing business.
This could be even bigger than cryptocurrency and decentralized finance or defi.
So what is this big disruptive force?
Well, it’s social tokens!
So what are these?
It’s a way of creating a token that is centered around a community where the token benefits the members of the community. It completely unlocks the possibility of how different people across the world can coordinate for a common mission within a community.
So whether that’s supporting their favorite content creator, participating in some sort of online community itself, or even patronizing major brands.
This could be a major game-changer that disrupts how you interact with pretty much every consumer-facing business on earth.
Why Social Token Is Next Big Thing ?
I watched an interview with Raul paul from the defiance. In this interview, he talks about social tokens. I want to lay out some of the points that he makes.
So the first point that comes out of his interview piece is that he thinks that social tokens can be even bigger than defi.
Now keep in mind who’s saying this. This is Raul, he’s the founder and CEO of real vision x, Goldman Sachs retired early, and so he, of course, has a very impressive list of credentials.
He also has a pretty impressive track record on identifying trends early and predicting where they’re headed. So one of the reasons that he thinks that social tokens can be bigger than decentralized finance or defi is because defi has the power to disrupt banks and financial institutions, but social tokens have the power to disrupt every kind of business, even outside the financial sector.
So why is that? Do you know why this a revolutionary?
They have a way to assign value to a community itself. Members of this community can get value from being a part of the community, not somebody outside getting value from this community getting bigger.
Types of Social Token:
Social tokens are being categorized into three food groups
1- Personal Token:
where you might have a token issued by a personal content creator, maybe like a Youtuber or you know, a social media, influencer.
2- Community tokens:
Community tokens are issued and controlled by a group often managed by a decentralized autonomous organization or DAO
2- Social platform tokens:
These tokens represent control over a platform that facilitates a social token issuance in exchange
Understanding Usage Of Social Tokens:
Let’s start small, with probably one of the most common use cases where people are trying experiments. Social token around, influencers or content creators. This could even be musicians as well.
So basically, anybody, where you have fans and these fans, can hold a token – and this token is part of your community. People having those tokens have special privileges within that community. The more people hold that token, the more valuable the token itself can become. So, if they’re part of your community. Let’s say you’re a DJ maybe people having social tokens get exclusive rights to early releases, maybe some input on some creative direction, special bonus, perks, and things like that all right.
Let's talk about a much bigger application of this Social Token:
What if Disney were to adopt a social token?
What would that look like? also, why would it be such a massive game-changer?
How Disney could use Social Token?
Well, think about it, Disney has about 3-4 billion people that are a part of its customer base, but they have a massive problem. They don’t always have direct access to these fans.
Let's say Disney wants to know something from their customer. So they will try to get back to their customers or get the word out to their customers. For this to happen Disney has to personally know their customer, rent them back from the social platforms that they’re a part of maybe it’s Facebook, maybe it’s youtube or googles
Disney will buy ads on these platforms to try to reach their customers again. Disney will pay for advertising to do this, but because they don’t have that direct relationship with their fans.
Social tokens can change this dynamic. If you have a social token then it represents part of being the Disney ecosystem. You can get that direct Access and now this token is the currency of the Disney world.
Disney is a massive brand and this currency can be used in a variety of places. You know it can be used for theme parks, it can be used for Disney merchandise. It can be used for films, and so that introduces all these new incentives for the fans to hold the token. They could get discounts. They could see a film early. They could get bonuses like a theme park. You do not have to wait in line.
As a token holder, you can get benefits from the ecosystem in a way that you couldn’t get before and this is why this is a social token is such a game-changer. Because as this community gets more valuable the token gets more value. This is more decentralized where the participants of the network can get benefits themselves, not just the issuer.
Social Token in Businesses, Tech Industry and Social Media Platform:
Facebook was trying to launch the libra coin they also renamed it to dm. Which is a stable coin, to power the facebook economy – and this is about 3.5 billion people and if they’re able to do this. Other tech and social media companies will follow, like youtube, Spotify. This changes how pretty much all network effect businesses work.
We see lots of network effect-driven businesses across tech. Uber, Amazon are all network effect-driven businesses. If they can issue a Social token, that’s a part of that community and they can introduce all these benefits. Like discounts, maybe special perks whatever if they get the incentive to hold this token and then that token actually increases in value and that value can go back to the participants of the community, not just the shareholders of the company. This is a massive game-changer.
So the biggest one is most likely regulatory uncertainty about how this is going to work. Particularly, financial regulators – and this is probably one of the bigger reasons that you’re going to see smaller players, leading the way whether it’s smaller companies smaller communities that have less to lose. Maybe, bigger companies that have a much higher risk tolerance for trying new things like this will also come to capture the market in the early stages.
It’ll be fascinating to see how this plays out, and so, if we can come over these regulatory hurdles and get clarity on what people can do in this space.
If people can crack that code and find a working model, then it’s very likely that the first person to do this sort of win that race is going to lead the way and set the stage for how other people can do. Lots of other people are likely going to follow suit. This is why it is such a big game-changer because pretty much any consumer-facing business, especially network effect-driven businesses can benefit from this. Not only this, individual members, who patronize those businesses and are a part of those communities can lead to just rapid growth, expansion and can take benefit from this.
This innovation can be way bigger than decentralized finance or defi, any cryptocurrency that we know today and that’s why this is such a major potential trend and a big game changer down the horizon.
I hope you’ve enjoyed reading this article. If you want to know more about the social token, crypto trends check out the upcoming article here.
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