“Creators often struggle to capture the value they create on social media platforms and beyond. Social tokens may change that equation and offer other advantages.”
If you only have a couple of minutes to spare, here’s what investors, operators, and founders should know about social tokens.
- The term “social tokens” might not mean what you think. Often, social tokens are assumed to be a fungible currency that relates to an individual. Think $RON coin for football player Ronaldinho. This is just part of the story. The social token category includes NFTs and currencies used by groups.
- Running an economy has benefits. Starting a social token can be an excellent way to raise financing. It can also turn followers into investors and align a group around a common cause.
- New tools have made tokenization easier. Platforms like Coinvise, P00LS, Rally, and Strata have made it easier to create a social token. These products help with definition, distribution, and management.
- Liquidity can be hard to come by. A true economy requires a market. Social token projects often struggle to create sufficient liquidity given the upfront capital needed. As a result, even popular social tokens may not be available for trading.
- Composable economies will unlock innovation. The social token movement opens the door for new financial interactions and organizational structures. We can expect creator ETFs, decentralized record labels, and even short calls. “