<aside> 🌱 Last time we spoke about DAOs and how they have the potential to empower communities through decentralised ownership and control. This time we're going to talk about Social Tokens, the tool many DAOs use to do this.
Not sure what a Social Token is and what it means to you? Lets explore it together 💜
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While the official definition of a Social Token is still being defined as we continue to find utility and use cases for them, we believe Social tokens are a tool for cooperation and coordination, which create value through an individuals or communities interactions and reputation.🤙
This social capital, generated around the Social Token can be used as a means of exchange beyond pure financial value. A way to align incentives and encourage shared behaviours and well as reward collective value creation which would often go unrewarded. 💸
Examples of Social Tokens could be;
<aside> 🎨 An influencer launching a Social Token to their most loyal fans - whenever fans create fan art, the holders of those tokens get exclusive access to content created by other fans.
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<aside> ⛔ A community token-gating entry to their Community discord, so that not anyone could enter.
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<aside> 🎙️ A Creator giving out a token through their new album drop, which allowed listeners to vote on their future products or remixes.
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Social Tokens are deeply connected to unlocking the Creator and Ownership economy, while the Creator Economy has existed ever since the creation of the internet, Social Tokens are a way to supercharge the often unrewarded time, energy and authenticity creators and communities generate through their actions and reputations.
You can think of these examples as ‘money plus’, as in addition to the financial incentive of having the token, tokens have the potential to include ownership, control, recognition and status.
Still, not all individuals or communities will want their social tokens have or want utility, there are a few emerging categories of token. Creator Tokens, Community tokens, Brand Tokens and Personal Tokens.
A Creator Token might allow for access to a future gig or vote on a future album, whereas a community token may allow for a profit share of future revenue. A Brand Token might be used a Web3 loyalty card, and a Personal Token might allow you to vote on someones life decisions. What you'll be able to do with tokens is completely up to you, however much like DAOs, the purpose, mission and intentions of introducing a token will define your Social Token.
For Protein, we’re interested in Community Social Tokens as a way to create and distribute value, ownership, control and recognition in a fairer, more transparent way.
Let’s explore ways in how Community Social Tokens create value which goes beyond speculation:
<aside> ❓ Governance. As we saw in our last article on DAOs, governance is key to the momentum, structure and organisation of decentralised Communities. Social Tokens can be used in the governance process to make decisions within a community, using the tokens to ‘vote’.
Social Tokens can either have governance utility built in, or communities can ‘mint’ another specific governance token designed for decision making.
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<aside> 🔑 Ownership For Communities, Social Tokens can be thought of as a share of equity in the collective whole, so when the whole value of the community increases, so does your share.
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<aside> ⛔ Access Communities can use tokens to create exclusive access to channels, spaces, content and events. We’ve seen examples of this done for online and in real life events, and creates a barrier to entry where members have to have a social or financial stake in being part of the community.
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<aside> ✨ Rewards for value created Communities can use social tokens as a reward for behaviours which add to the collective value of the community. As we saw in ‘What is a DAO’, there are often small tasks which become the glue of communities which often go unrewarded and unrecognised, Social Tokens are a way to reward this. Communities can also set bounties for projects, where members can complete the community set briefs in order to receive the reward.
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<aside> 🏆 Recognition Tokens can be used as a means to recognise early adoption and value added to the collective whole. This can be done through ‘tipping’ or rewards like NFT badges and granted roles. This recognition can also have utility to unlock content and spaces through token holdings.
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The question of whether these tokens are ‘real money’ comes up a lot. Whether these can be used to buy things like pay bills, pay rent, buy an ice cream... 🍦
Ultimately it comes down to the design and utility of the tokens and how the Community wants to use them. Currently due to a lot of legal uncertainty around Social Tokens, it is normal that Social Tokens primarily start as a means of ownership or a tool for access, giving them clear utility.
<aside> ⚙️ Utility here means the token has a use for people outside of pure financial speculation.
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However because of the nature of decentralised Communities and Web3 technologies, once someone has a large amount of tokens there is nothing to stop holders of the tokens creating liquidity on an exchange for the token.
*Liquidity would allow for other members to start trading and exchanging the token for other assets (*This is something we’ll explore in a later article)
<aside> 🌱 For Protein, the $PRTN token, is used as a tool for access, ownership and coordination for people and ideas to grow. It is not intended to be traded or as a means of financial payment.
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