2020 was the year that many entertainers faced the first major dilemma of their career in regards to monetization. What was the dilemma?
COVID-19 greatly reduced the ability of entertainers to make money because the pandemic resulted in the shuttering of the venues where entertainers earn their money. For instance, many musicians were forced to cancel shows because the concert venues closed or had too many restrictions on the amount of people that could gather in one location.
This led to many celebrities using something mostly used by niche communities in the crypto community – social tokens.
Anyway, this article will explain what social tokens are and why celebrities have started flocking to them en masse in 2020 and 2021.
What Are Social Tokens?
As mentioned in the prior section, social tokens are one of the newer trends in cryptocurrency. Sadly, the understanding of social tokens for most people rarely goes beyond a simple buzzword.
For the sake of brevity, social tokens are tokens released by a community/organization or individual for use on that platform or with that individual. In that sense, social tokens are very similar to a utility token.
An example of a social token released by an individual would be an artist releasing a token and then requiring clients to pay them in that token. This obviously gives the token some value as it adds demand to the token. Individual social tokens have not really caught on beyond small, niche examples and individual tokens released by extremely influential celebrities.
The other, more common, example of social tokens are those released by a community. In this case, a community will release a token that must be purchased in order to access certain community benefits like hidden Telegram channels or voting rights.
In both cases, you should view social tokens as a sort of paywall for certain features of either a business or the services offered by an individual.
Those are the very basics of social tokens, which should help explain why celebrities have recently begun embracing them.
Here’s Why Celebs Are Using to Social Tokens
So, celebrities have been embracing social tokens recently because of COVID-19 and the effects of the pandemic on their monetization strategy, but how exactly are they embracing them?
Typically, a celebrity will launch their own social token with certain perks attached to the token. These perks could include memorabilia, meet and greets, exclusive content, and other exclusive perks not available to the general public.
Again, these perks are only available to token holders as a way of creating demand for the token. Lil Yachty, Akon, and Ja Rule all announced social tokens with exclusive perks for holding the token.
Social Tokens vs Traditional Membership Model
Social tokens have a few benefits over the more traditional membership model that relies on fiat currency. But the benefit really boils down to one thing – control.
Social tokens give the content creator much more control. For one, they are not at the whims of a platform or membership SaaS. The social token creator can make any decisions they want about membership tiers and the exact perks of the social token.
The other benefit of social tokens is that censorship is not nearly as big of a problem. This is especially true for social tokens created for more controversial niches such as the adult industry. Social tokens do not have to worry about payment processors banning their account for inappropriate content, which has problems, but most in the cryptocurrency community are for less censorship not more censorship.
Now, social tokens are not without their drawbacks. The biggest drawback of social tokens, in our opinion, is that purchasing the tokens is a much more complicated process than buying a membership or perks with fiat currency. The typical process for purchasing a social token involves either trading cryptocurrency for the social token or purchasing the social token with fiat currency. Additionally, a social token is usually an ERC-20 token stored on an Ethereum wallet.
We admit this isn’t a complicated process for younger people, but it can be problematic for those that are not particularly tech savvy such as older people.
Industries Ripe for Social Tokens
It’s our opinion that social tokens, and cryptocurrency in general, will eventually make its way to every industry. However, it does fit with certain industries and niches more than others.
Social tokens have already seen some level of success in the music industry, but we are of the opinion that social tokens will be extremely popular in the eSports industry. The reason is pretty simple – those that follow eSports are almost always tech savvy by nature of playing video games and eSports is one of the faster growing industries.
eSports is also in the unique position of being a nearly perfect fit for social tokens. Just think of a famous eGamer offering fans the ability to play together online, private lessons, or other unique benefits only available in eSports because the nature of eSports is already online.
To summarize, the music industry has already shown that it will work with social tokens – expect social tokens and NFTs to completely take over that industry. Social tokens will spread outwards to other industries such as eSports and other online content creators.
Basically, any industry that has a user base that heavily relies on the internet to consume content is perfect for social tokens.
That’s it for why celebs have been using social tokens over the past year. COVID-19 has obviously been a disaster, but it has brought about a new digital age and the introduction of cryptocurrency to a larger subset of the population that previously would never have any exposure to cryptocurrency.
We fully expect more and more celebrities to embrace social tokens as the first pioneers begin to make a decent amount of money from social tokens.