A decade since it first came out as a research paper, blockchain and the crypto industry have diversified and started to make their presence felt in several domains. A quick review of the digital economy today to find out what is the most talked-about blockchain-based innovation today is most likely to bring up tons of interesting articles about social tokens.
Here, we’ll help you gain better insights into the below topics:
- What are social tokens?
- How do social tokens work?
- What are the benefits of social tokens and how does it help a business?
- Closing thoughts
What are social tokens?
These tokens are seen as the next evolutionary dimension for the crypto industry wherein the traditional focus on currency value for every crypto coin or entity is making a paradigm shift to become a more inclusive ownership entity. In other words, these tokens allow influence or services from a person, brand, or community to be tokenized as cryptic entities similar to cryptocurrencies.
Today, most influencers, celebrities, and businesses rely on popular media or internet-powered services to monetize their skills or services. What happens in this scenario is that the medium or platform that they leverage for delivery takes a part of their earnings, exerts control or pressure on their skillset to come up with content or service lines that the platform deems is more monetizable and in most cases has control over followers and the data in the system. This type of token came into existence to eliminate this barrier and bring forward a new principle of ownership in the digital economy.
How do social tokens work?
Imagine a talented singer or motivational speaker or a new business being able to create a club of loyal followers to whom relevant content or services can be directly offered. This is exactly what such a token can achieve. These content creators and brands can launch their social token and share it with their most loyal followers. And the benefits are bi-directional. Token owners get a pre-defined level of ownership in this new ecosystem that they gain access to and over time, the value of these tokens may increase as per the demand that the ecosystem can generate
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In other words, this type of token works like company stocks as well. The difference here is that not everyone can buy the token, but the creator can decide who gets to avail of the tokens and what would be the service delivered for each coin value. However, fans or followers having the tokens may be able to exercise voting rights to make an influence on the creator’s content schedules, get access to private content, and much more.
What are the benefits of social tokens and how does it help a business?
Business brands can leverage these tokens to create an autonomous service and sales ecosystem that does not require external support. This comes with a lot of tangible benefits.
Let us explore a few of them:
Reward Loyalty
Just like how airlines, hotels, and credit card companies run successful loyalty programs, brands can leverage these tokens to set up their custom loyalty business framework. They can reward users for transacting or doing business with them by gifting them their tokens which have tiered redemption programs. Consumers who own the tokens can redeem further services depending on their token balances and also be empowered with a sense of ownership of the business’s service catalog.
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Secure Exclusivity
This type of token is built over blockchain thereby making it impossible for fraudulent transactions to happen with regards to token ownership. This helps brands create an ecosystem for their business where only genuine fans or consumers are likely to participate in transactional experiences. This improves the chances of monetizing their services by catering to an exclusive list of clientele who have a high affinity for their offerings.
Tokenize Assets for Easier Sale
Tangible business assets for example products or goods that are physical can be tokenized into their digital avatars and traded within the business’s mini-ecosystem of loyal consumers. Consumers do not have to undergo hours or at times even days of manual intensive paperwork, verification, validation, and other lengthy procedures before getting their hand on the products they love. With a social token system, all information, certificates, and authoritative support elements of a physical asset are offered as a digitized token. This token serves as a seal of ownership and trust about the real-world value of the products sold.
Attractive Capital Investment Route
Budding entrepreneurs and business brands can leverage the social token ecosystem to create a pool of their own tokens which investors can buy into. The value associated with each token can be explicitly enforced thanks to the immutable blockchain technology lying underneath. What investors or token owners own, how they can exercise their rights, and up to what extent can they exercise them can all be pre-defined, agreed and contractually embedded within these tokens. There is no need for external agencies to settle disputes as autonomous enforcement of contracts prevents investors from getting duped or subject to fraudulent experiences of losing money even if the business is doing well.
Closing thoughts
These tokens have immense potential to redefine the way companies can generate targeted business opportunities. Enabling them to build a decentralized and secure ecosystem that caters to only their genuine customers or fans will ultimately result in long-term growth prospects which directly influences the value of their respective token. Get in touch with us to learn more about how the digital economy is embracing this type of token and how your business can take a successful shot in the social token space.
