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Is There Any Potential in Social Tokens?
A Shift In The Social Paradigm
Crypto is all about community. You could say that it is the glue that holds the entire space together. What makes these communities so special is that they are changing the idea of how organizations have traditionally been viewed. Community – for better or worse, but often better – takes precedence over corporate interests.
There are communities that are built around projects, and there are communities that are built by influencers. Both have led to the emergence of one of the biggest anticipated trends of 2022. The trend that I’m referring to is the introduction of social tokens into crypto.
For the uninitiated, social tokens are fungible tokens that brands, influencers, and communities can use to monetize themselves. They give supporters, members, followers, and fans the ability to purchase services or gain access to different communities. Social tokens can also be used to reward members and contributors of communities through airdrops.
To understand the benefit and potential of social tokens, it is important that we cover the landscape of social media and influencers.
The Landscape Of Social Media
In 2022, the backbone of anything requiring digital interaction is social media. It has been reported that there are 3.78B social media users worldwide. That is a 920M user increase from 2017.
It is estimated that there are 233M social media users in the US.
This number actually grew from 2020. The growth wasn’t significant, but it was growth nonetheless.
However, social media platforms like Tik Tok and Twitter did see significant growth among GenZ and Millennial users.
Though most of the growth can be attributed to the crisis we’ve been plagued with for the last two years, it is to be noted that a good majority of the crypto community resides on Tik Tok and Twitter (especially Twitter).
It is important for us to review the landscape of social media when it comes to crypto – especially when discussing social tokens – because the two sectors are pretty much intertwined.
Along with the growth of social media, we’ve also seen the rise of crypto influencers. Influencers in the crypto space are not a new phenomenon, but their impact has grown significantly throughout 2021.
The Rise Of Influencers
Influencers are typically public figures with large followings. In the mainstream markets, we’ve always seen the use of influencers to market products. Influencer marketing can be traced back to the 1950’s and 60’s. Though not as prevalent – primarily because of the lack of digital communication – it did exist.
Before the rise of social media, companies would take the traditional route of reaching their audience through huge ad campaigns. Those days are long gone. Companies have chosen to target their audience through the use of influencers, and with good reason. If we look at the influence that YouTube creators have over their followers, it’s easy to see why traditional marketing is taking a backseat.
It doesn’t just stop there.
In crypto, there are two types of influencers (content creators also fall into the influencer category):
Value Add Influencers: These are influencers that truly have their followers’ best interests at heart. They also use their influence to contribute to the overall growth of the crypto industry. They are quick to identify projects or other influencers that could be harmful to the crypto community. They also focus on educating their tribe rather than manipulating them.
Value Drain Influencers: These can also be considered parasites and/or vampires. These are people that build a following and community for the sole purpose of draining liquidity from their followers through manipulation. This can be in the form of shilling rug pull projects for pay or promoting products that can be harmful to newbies for a fee… or even creating their own token and rug pulling the community.
Now, I’m not saying that Value Add Influencers are immune to making bad calls. This is crypto, and even the most promising projects can turn out to be duds or rug pulls that even the most veteran crypto enthusiast can fall victim to. The difference is the intent. A Value Add Influencer will always be forthcoming about any risks associated with the projects they support. They also do not shy away from admitting mistakes.
Morning Consult conducted a survey of 2.2k investors, and 29% said that they use social media to learn about cryptocurrency. Depending on how you look at it, this can be equally intriguing and terrifying. While it certainly has its risk (discussed later) the trust and use of influencers will not die down anytime soon.
As the use of social tokens continues to grow, you will certainly see more influencers take advantage of the opportunity to independently monetize their communities without having to worry about corporate interference (YouTube, Facebook, Instagram, etc).
However, only the most trustworthy deserve to reap the benefits of the utilization of social tokens.
Social Tokens In 2022
I hope that the picture that I’m attempting to paint is starting to become more clear.
Content platforms, like YouTube and Facebook, have the ability to control how creators distribute their content, while social tokens allow creators and influencers to go direct-to-consumer.
One project that is making it possible for influencers, creators, and artists to offer social tokens to their communities is Rally. Rally allows creators to:
Create their own branded tokens with no experience.
Integrate them into their platforms.
The best thing about Rally is that you can perform these actions without paying any fees.
Another project that is leading the charge in fan engagement is Chiliz. Chiliz has partnered with different sports teams and organizations to give fans the capability of:
Buying and trading branded tokens of their favorite teams through the Chiliz.net exchange.
Use the Chiliz token as an alternative payment for products. Services, and experiences.
Vote in team surveys and polls.
There are other projects that exist as well. I will refrain from listing them all – as to not unintentionally shill. The two projects above are only meant to be taken as examples and not actual endorsements.
So far, social tokens sound great, but what are the pros and cons? Let’s discuss those now.
The Potential Risks
Just like any other coins or tokens, social tokens can be wildly volatile. While positive volatility is one of the main selling points to newbies, negative volatility can be a killer.
These tokens can also be susceptible to whale manipulation.
In conjunction with whale manipulation, liquidity can be rugged by bad actors. Tokens also aren’t immune to being hacked.
Most of the risks listed aren't unique to this new frontier. However, it is important to always highlight any potential pitfalls.
The Potential Benefits
YouTube does share a percentage of this revenue – around 55% of ad revenue – with creators. However, YouTube still has the ability to demonetize creators. Spotify also avoids paying royalties by driving traffic to the original content.
The ability for creators, influencers, teams, etc to offer their own social tokens offers a certain immutability that creators desire. It also gives them a way of earning and keeping 100% of their revenue – aside from paying taxes.
In theory, the ability to offer social tokens could incentivize creators to provide real value to the community and help combat paid shilling of horrible projects and/or products.
Social tokens can also help the growth of the entire crypto space. As teams and influencers integrate social tokens into their offering, more mainstream fans will be exposed to the industry. Think of it as an unconventional onboarding process.
This could also lead to the creation of new decentralized social media platforms.
You’ve seen the statistics surrounding social media, the breakdown of social influencers, and the potential benefits and risks of social tokens. In the end, what does it all mean?
It means that the collective behemoth called social media is continuing to grow – especially with the introduction of the metaverse. Right now, creators, teams, influencers, and organizations have the ability to create value for their tribes while receiving value in return.