NEAR Protocol and Social Tokens: Is 2021 The Year of Social Tokens?
In crypto, constant innovation is a privilege that is easy to forget. As Bitcoin has demonstrated with peer-to-peer value transfers, and Ethereum has demonstrated with decentralized finance, new forms of tokenizing assets, building crypto-denominated protocols, and writing smart contracts results in the frequent possibility of creating something entirely new and valuable. Like Non-Fungible tokens, Social tokens are a new and quickly emerging asset class in crypto that has garnered serious attention in recent months. Many have even said that 2021 will be the year of Social Tokens. What does that exactly mean?
Define Social Tokens: The tokenization of value tied to a specific person or groups of people, and written into smart contracts.
To date, tokenization has largely encompassed assets: In DeFi this refers to certain financial assets, while for NFT’s this relates to things like content, art, music, and so forth. But with Social Tokens, what is tokenized is access to a specific person or community. Specifically Andrew Steinwald, explains the following about Social Tokens:
Personal Tokens: “Personal tokens are created by individuals and often used to exchange forms of labor. For example, a graphic designer will do one hour of work if paid 100 of their social tokens. In this example, the individual drives the token’s value by performing a service.” (Source)
Community Tokens: “Community tokens are generally used for memberships or communities. For example, creators will launch a community token that users must acquire in order to gain access to private Telegram groups, Discord servers, newsletters, etc. They are also given as rewards and thus incentivize behavior within a community. For example, a community could launch a competition where participants compete to create the best infographic and then token holders vote on the winner.” (Source)
That is to say, that social tokens, unlike other forms of tokenization, center upon the accessibility or services of a particular person or community, pre-defined in the token contract. For many, the concept may initially be somewhat difficult to wrap their minds around. But Social Tokens represent a new frontier of the gig economy, and perhaps new life for industries like media.
Source: Forefront, 2020 in Review.
The Future of Freelance Work: Issue tokens for yourself that are predefined about when you are available, how many hours of work a token encompasses, and what kind of work can be traded for the token. Allow any individual to purchase your token, and thus pay for your services – either up front or as needed. As a single freelancer becomes more known, popular or valuable, the demand for the token will equally increase due to limited supply.
Access to Special Communities: Clubhouse is a new audio-based application that is invite only. Similar communities in crypto, could allow access via a social token. These communities may range from high profile newsletters, to entire media outlets, to niche groups of like minded people that want to guarantee buy in from other users. Social tokens effectively merge commitment to a group by requiring a ‘buy-in’ up front.
2021: The Year of Social Tokens?
In Forefront’s comprehensive review of Social Tokens, they ask whether 2021 will be the year that social tokens go mainstream. The creator economy or ‘passion’ economy as it was originally known, is already becoming popular:
Messari estimated in October of 2020, that Social Tokens – fully diluted – were valued at close to $200 million USD. In 2020, bigger investment names like Fabric and a16z jumped on board social token platforms like Rally or Roll. Altogether, such trends have led many to speculate about what kind of value and opportunities social tokens might unlock in the years to come – and if truly 2021 will be the year of social tokens?
Social Tokens and NEAR Protocol: A Sign of Things To Come?
In the short time since Mainnet Launch, NEAR has already garnered a reputation for being a hub for non-fungible tokens, artists, and content creators. Social tokens, in many ways, are a natural next step. MintGate is a current project in the Open Web Collective that holds the promise of incubating a home for Social Tokens on NEAR.
According to Forefront, Mintgate is described as “a platform for building tools to empower the creator economy.” With a leading vision “to reinvent value creation by giving creators an easy way to monetize their content with social tokens. We turn any online content into exclusive rewards.”
Mintgate seeks to inaugurate ‘permissioned-tokens’ as a form of accessing content, and creating new value streams for creators. Beyond only permissioned tokens, Mintgate will also offer individuals the ability to launch their own social tokens for themselves, their content or their community.
“This means if someone wants access to your blog, article, design board, video, album, website, or software they need to hold your social token or any other ERC-20, NFT or multi-asset token you specify.” (Mintgate.App)
Ultimately, social tokens are an emerging asset class with an untested frontier ahead. While expectations remain high for the year, it is still unclear exactly how much adoption social tokens will garner, and where in the niche market things might go mainstream.