What are Social Tokens and How Does It Work?


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What are Social Tokens and how does it work

Cryptocurrencies may be under pressure, but the industry is still strong. For example, social tokens are a crypto phenomenon that is slowly but steadily gaining traction.

These tokens are based on tokenizing a person’s or community’s reputation. While this is not a new concept, it is now receiving a significant boost from blockchain technology.

But what exactly are they, why are they on the rise, and why should you care about any of this? In today’s guide to social tokens, we’ll cover everything.

Let’s get started.

What Are Social Tokens?

Social tokens are a type of blockchain-secured digital ownership that allows creators, influencers, and brands to monetize experiences or services; this ownership becomes an asset that can be resold and may increase in value.

For instance, if Janice has a large social media site following and wishes to establish a membership community, she could sell a social token that grants specific rights (i.e., access to hangouts with Janice, live Q&A sessions, etc.). Janice can sell the social token, and the buyer will receive these benefits.

That token, however, can be resold as an asset. Janice could even stipulate in a digital contract that she gets a percentage of the resale. As Janice’s brand grows, so will the value of the benefits her social token provides.

You can also monetize with token gating on an SDLC Network. Try it!

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NFTs vs. Social Tokens

Social tokens work similarly to non-fungible tokens (NFTs), utilizing blockchain to create a distinct ownership model. The distinction between social tokens and NFTs is that NFTs monetize a digital items, whereas social tokens monetize the creator.

NFTs are useful for monetizing digital artwork community, whereas social tokens are helpful for monetizing services or experiences.

A digital artist, for example, may decide to monetize their work by creating NFTs. They could, however, monetize their brand further by issuing a social token that grants holders access to Q&A sessions or art lessons. (Read more about What is NFT and How It is Important for Creators and Businesses?)

What Are the Benefits of Social Tokens?

Benefits of Social Tokens

Now that we’ve defined what a social token is let’s take a closer look at why they’re a crypto innovation that brings numerous benefits to the industry and its communities:

Community Advantages

Token holders can gain access to private chats and forums, exclusive collectibles, early access to content drops, and share not only the latest news about the brand awareness of influencer they follow but also vote on group decisions such as who should be hired as a community manager or how to manage the common treasury best (if one exists).

Content Co-Ownership

The emergence of social tokens eliminates the role of centralized authorities with content control and the ability to censor or limit creativity and set rates or even demonetize creators. As a result, token holders are gaining control of the online world’s creator economy. In exchange for crowdfunding the creation of a specific piece of digital art, they co-own content in the form of NFTs.

Passive Income from Co-Ownership

By funding a brand or person, social token users can co-own NFTs that may be resold several times and receive a sale cut each time. Similarly, content creators could use smart contracts to establish royalties and forecast future earnings when their NFTs change hands.

Ethical Monetization

Instead of relying on donations through platforms such as YouTube or Patreon, which may take a cut of creators’ transactions and earnings, fans may have an economic incentive to help their favorite creators succeed if they know their money is going directly to their accounts. But on the other hand, it is a more transparent and equitable way for creators to earn a living.

Confidence Vote

Fans can show their loyalty and ongoing support for their favorite content creator’s career by holding a social token. The token’s value will rise as they become more popular and its profile increases. The more tokens purchased, the more money is bet on a creator. For example, an aspiring musician can issue a social token that allows their fans to invest in their career while also profiting as their fame grows.

Increased Revenue Control

For creators, social tokens are a valuable way to connect with their audience and a profitable new monetization avenue that not only means higher earnings but also more control over them.


Because a social token runs on a blockchain, it is virtually impossible for a network to be hacked or for fraudulent transactions to occur. Holders can be confident that their tokens are genuine (and that their digital ownership rights cannot be challenged), while creators and businesses can be convinced that they are engaging with true fans.

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How Do Social Tokens Work?

Platforms that build social tokens on top of blockchains, such as Ethereum, create them.

Social tokens are frequently traded on platforms such as Rally, using a model similar to cryptocurrency. Because they have value, you can buy and sell them just like any other digital asset. Global Coin Research (GCR), Whale (WHALE), and Julien Bouteloup are some well-known social cryptos (JULIEN).

Social tokens’ popularity stems partly from the desire to eliminate the middleman. In a typical Web 2.0 environment, social media platforms such as YouTube, TikTok, and Facebook take the lion’s share of fees from creators and brands, potentially reducing the successfull content creator’s potential income. Similarly, social platforms exert control over brand followers while providing no tangible benefit.

Social Token Types

Personal tokens and community tokens are the two main types of social tokens. Because content creators are constantly coming up with new ways to use such tokens, you may come across new terms like “participation tokens” and “social platform tokens.” These are sometimes described as distinct types of social tokens that do not fall into either of the two main types listed at the start of this paragraph.

Here’s an overview of each one to help explain.

Personal Tokens

Personal tokens, also known as “creator tokens,” are created by individuals to monetize themselves and provide privileged services to their followers. Anyone, including celebrities, artists, athletes, and the general public, can make personal tokens to help advance their careers or notoriety.

Before blockchain and the creator economy, music legend David Bowie used asset-backed securities, known as Bowie bonds, to advance his career. Holders of the Bowie Bond were promised a 7.9% annual return on the royalties earned from streaming David Bowie’s music for ten years.

Nowadays, well-known artists are providing similar incentives by launching social tokens on the blockchain. For example, André Allen Anjos (better known as DJ RAC), a Grammy Award-winning artist, introduced RAC, the social token of the racOS platform, in 2020. As a result, token holders can benefit from various benefits, including exclusive music playlists, token airdrops, and access to the artist.

French entrepreneur Alex Masmej tokenized himself by selling ALEX to crypto enthusiasts. This aided him in raising the capital required to launch his social platform in the United States. Aside from other benefits, token holders will receive a portion of Masmej’s future earnings for the next three years.

Tokens of Community

Organizations or groups of people create community tokens or community coins to market their respective brands to followers. Token holders, like club members, can enjoy exclusive benefits reserved for that specific community.

These benefits are similar to those provided by personal tokens but may also include governance rights and a share of the company’s revenue.

A decentralized autonomous organization, or DAO, is primarily responsible for creating community tokens. Unlike the creators of personal tokens, the organization in charge of a community token already has a large following, making marketing strategy more accessible.

For example, when CoinDesk launched its DESK token in 2022, it promoted it at its much-anticipated annual Consensus festival, which attracts thousands of members. To express its appreciation, CoinDesk distributed DESK tokens to attendees at Consensus 2022. These tokens could also be used to purchase items at the event.

Another example of a community token is WHALE. It derives value from rare and valuable NFTs in the WHALE Vault art collection. The value of the stored selling NFTs has increased from $500,000 to more than $70 million since the project’s inception in 2019.

The increased value has directly benefited WHALE token holders. Members can rent and buy NFTs from the Vault and access exclusive Discord channels, events, and giveaways.

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The Participation Tokens

Participation tokens are occasionally referred to as a subcategory of community tokens. These tokens can be obtained by participating in the development of a project. For example, the KAI token from TAIKAI is an example of community engagement. Universities and organizations can use these tokens to reward contributors who want to help create various types of projects.

TAIKAI also encourages students, freelancers, and startups to develop projects and submit proposals. KAI tokens and prizes are awarded to the best bid. In addition, KAI tokens are awarded to backers and experts who contribute to the project.

Another similar initiative is Friends with Benefits. The FWB token brings artists, creators, thinkers, and Web 3.0 enthusiasts together to work on various projects. Successful teams are rewarded handsomely for their efforts.

Token holders are also rewarded for creating a condensed version of the content that other members can pay to access.

Social Platform Tokens

Platforms that support the creation and trading of social platform tokens distribute them. The rally, TryRoll, and BITCLOUD are examples of social platform tokens.

Rally is a popular social token platform that allows individuals, celebrities, and organizations to create their own social and non-fungible tokens (NFTs). RALLY has gained tremendous momentum since its inception, resulting in a market capitalization of more than $8 million in just a few years.

The only disadvantage of the token is that it can only exist on the Rally network because Rally is a sidechain of the Ethereum network (What is Local Bitcoins, Ethereum and Altcoins).

TryRoll, on the other hand, allows users to create an ERC-20 token that they can then share with others on various platforms. It also provides custodial Ethereum wallets that can send social tokens to any address that accepts ERC-20 tokens. TryRoll, on the other hand, is not the most accessible platform to use and has a high network fee.

What Is the Importance of Social Tokens?

At first glance, creator tokens appear similar to an online service subscription. Many platforms, for example, already provide exclusive content from their favorite creators and early access to events.

Social tokens, on the other hand, are about owning a piece of the community and the content marketing rather than simply gaining access. Holders of social tokens have exclusive rights that were previously unavailable to them.

Social tokens are also a novel way of becoming more involved in communities and developing deeper relationships with content creators such as comedians, musicians, crypto artists, and others who share similar interests.

Several companies dedicated to token development and launch are making waves in the social token space, including Bitclout, Rally, and Steem. There are also other projects, such as Fyooz, that run a token marketplace.

The Evolution of Social Tokens

Making a social token is similar to creating your online forums. However, it’s unlike anything you’ve seen before because it allows content creators and token holders to collaborate to build brand value.

Instead of engaging followers via social media, content creators are more likely to use a social token to allow everyone to benefit from community engagement and potential price increases.

Furthermore, social tokens will be around because they have a lot of value and utility. Consider the word WHALE. The token’s market value has increased faster than the underlying NFTs on which it is based. Similarly, Rally has already established itself as the leading global platform for anyone to create social tokens easily.

Bottom Line

Social tokens may appear to be an odd concept in a world where creators and businesses already have great ways to monetize themselves.

But the idea is interesting and very relevant now that Web 3.0, the next version of the internet, is coming out with the goal of connecting people more directly. As a result, social tokens are poised to become a valuable asset in this new economy of ownership over people’s digital presence and creations.

For the time being, they’re more of an experiment than a standard practice. However, that could change shortly as more publishers, influencers, and online communities jump on board and create social tokens, attracting and building large followers.

Because social tokens are directly associated with the person or brand for which they are named, there are risks associated with their value.

On the other hand, they give us a chance to rethink how we make content and interact with our communities, which means that everyone gets more great value.

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