CoinEx Institution | What About A Personal IPO? An Introduction to Social Tokens

What are social tokens?

Social tokens are tokens issued by individuals or a certain community. Investors can share the economic value of the issuing individual or the value of human resources in the issuing community itself by purchasing tokens. Through social tokens, you can invest in individuals and communities, rather than in a company or a project.

Types of social tokens

There are two types of social tokens: personal tokens & community tokens, which can exist in the form of ordinary tokens or NFTs. To begin with, let’s see personal tokens. As early as 2008, an American named Mike Merrill divided himself into 100,000 shares and set an initial public offering price. Each share would earn a potential return on profits he made outside his full-time job (though he were only managed to get 13 investors). Today’s personal social tokens have evolved into fan tokens issued by content creators, or DAO tokens with a certain purpose endorsed by personal reputation. Such tokens usually serve following purposes:

  • To influence the creator’s content through voting;
  • To share the creator’s income through the share of tokens held;
  • To simply support the creator. By this means, you will get some fan benefits (this model has been resisted by some fans because it does not require tokens but just traditional donations or membership mechanisms. What’s worse, tokenization may bring speculators).
  • To serve as a pass to the community, similar to a membership pass;
  • Incentives for community involvement.

Value capture of social tokens

Social tokens go in line with the blockchain spirit as they make the community more decentralized and the distribution of economic benefits from community development more transparent. Here is a simple example. The big guilds in World of Warcraft used to be just QQ chat groups, yet once they grew bigger, the value they created, such as advertising sponsorship, etc., went to the guild manager’s pocket, which was unfair to every participant in the community, especially to those early contributors.

  • A token serves as a symbol of the community, not a bonus point of a centralized platform;
  • Users can govern the community they like by holding tokens;
  • After a token has some liquidity, early contributors can enjoy considerable returns.

Quality small projects

There can be many forms of protocols for community tokens. If you want to be part of it, buying certain community tokens is not the only option. Here are some good small projects of social tokens for your reference.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store