COVID and Big Tech Burnout Are Pushing Social Tokens Mainstream
In 2020, COVID-19 forced creators, brands and artists to rethink their fan monetization and engagement strategies. Many turned to virtual engagements and live streaming. Others experimented with platforms like Patreon or tried to double down on monetizing their social media platforms like YouTube and Twitch. In our industry, it was social tokens that made the rare leap from crypto circles to consumer audiences.
Before this year, social tokens were an intriguing but mostly hypothetical alternative or additive way for creators, artists and brands to connect with their fan communities.
This post is part of CoinDesk’s 2020 Year in Review – a collection of op-eds, essays and interviews about the year in crypto and beyond. Kevin Chou is Founder of Rally, an open platform that allows creators, celebrities and brands to launch their own currency.
It didn’t take long for influential celebrities to see the value once the foundational tech was actually built. Akon, Ja Rule and Lil Yachty all announced tokens this year. The NBA’s Spencer Dinwiddie and Japanese superstar soccer player Keisuke Honda launched tokens too with esports and gaming seemingly on deck next.
Recently, Esports Insider noted, “esports is prime real estate for custom currency.” The diverse array of use cases that each of these social tokens offers is a testament to how far crypto has progressed when it comes to producing real-world usage and value instead of offering a solution for a problem that doesn’t exist.
The last few years have really taken their toll on creators who feel burned and burned out by big tech social platforms. It’s no secret that platforms rake in huge profits and often give creators the raw end of the deal. The rules are constantly changing and no matter how neutral a platform claims to be, there are always inherent biases behind their decisions to censor content. Creators can be deplatformed through unilateral decisions made by the platform, over which creators can exercise little or no control.
See also: Rapper Lil Yachty Sells Out Social Token in 21 Minutes
Instead of building a large platform’s revenue while only getting a small piece of it, creators are excited by the idea of using their own token to build their own economies and interact with fans on their terms, instead of on the whims of the platform. Blockchain takes the decision-making process out of the hands of large platforms and into the hands of creators and their fans and community members. It’s up to the creators and their communities to decide how the creator’s social token will be used and valued.
In some sense, celebrities have given crypto a bad name. In 2017, there were several influencers who hyped dubious token projects. Traders piled money into initial coin offerings with unclear roadmaps and ultimately little intrinsic value.
This year saw a shift towards actual value creation and control. Instead of just advertising an ICO, influencers are plugging social tokens into their existing community-building efforts. Some have deployed personal tokens on apps like Discord to enable token-permissioned chats and channels. By integrating tokens into their existing communities, rather than duping their fans into investing in third party token projects, these creators are adding value to their brands and proving the useability of cryptonomics.
It’s up to the creators and their communities to decide how the creator’s social token will be used and valued.
Perhaps if bitcoin’s bull run continues, we’ll see celebrities like Logic and Maisie Williams create their own currencies. But one thing is certain, the conversation will shift from what creators are launching tokens to what they are doing with their tokens, grading social tokens on their usability and utility.
Creators, artists and brands and their fans will need to keep their guard up against crypto projects offering pump-and-dump mechanisms for short-term gains that will ultimately be a detriment to their relationships with their fans. Instead, they will need to focus on the long term and partner with crypto projects that aim to build richer solutions to community management and monetization.
The coming year will be one of experimentation where influencers will tap crypto to engage their fan bases with token-permissioned chat, voice and video functionality. We’ll likely see a ton of new activity. Discord community servers will launch their own social tokens as well. Artists will explore tokenized meet-ups, crowdfunding, and we’ll likely see social tokens plugged into the decentralized finance (DeFi) community as collateral for lending/borrowing.
As more developers get in on the action, DeFi enthusiasts build out the financial infrastructure, and celebrities bring their fan bases into crypto, social tokens will go down in history as a bright spot of 2020.