Creating Social Tokens: A Comprehensive Guide

Social tokens are digital assets issued on the blockchain that a creator, brand, or community can use to monetize themselves and reward their token holders. With the emergence of decentralized finance (DeFi), social tokens have become an efficient way to create tokenized communities that incentivize users to engage, and be rewarded for doing so.  Here, we’ll provide a comprehensive overview of creating social tokens, from the initial planning stages to the launch and beyond. 

Table of Contents:

I. What Are Social Tokens? 

II. Planning for a Social Token Project 

III. Choosing the Right Platform for Your Social Token 

IV. Developing & Launching Your Social Token 

V. Benefits of Social Tokens

VI. Post-Launch: Managing Social Tokens &  Growing Your Social Token Community

VII.Conclusion

I. What Are Social Tokens? 

Social tokens are a type of cryptocurrency that allows brands, individuals, and communities to collaborate and share digital ownership. The token issuer often establishes benefits for the holder of the tokens. These benefits may include exclusive content, community resources, access to events, experiences, rewards, and voting rights. Consider social tokens as a membership pass, but on the blockchain.

With social tokens, creators, brands, and communities have new abilities to monetize their content and engage with their fans in a way that rewards them for participating in their digital economy. 

The value of a social token usually depends on the issuer's worth and the benefits provided. 

 Generally, social tokens are not linked to financial gain and do not signify legal ownership of the issuer. “Creator coins,” “Community Coins,” “Personal tokens,” “and Brand Tokens” are  phrases sometimes used interchangeably to describe social tokens.

Here is a list of the types of social tokens: 

Community Tokens

Community tokens often are created by a collective group that centers itself around shared mutual goals and vision. They are usually used to give members of the community access to exclusive rewards, such as discounts, voting power, and early access to products and services. Community tokens can also be used to reward members for their contributions to the community. 

Brand & Fan Tokens

Brand and fan tokens are often associated with companies looking for a new way to engage and monetize customers. The line between brand and community can seem blurry, but one distinction is that brands use tokens in a way that looks like a loyalty reward system. A good example would be the rise of professional sports teams that have launched fan tokens. Fan tokens are a way for sports teams to capitalize on their brand and reward their fanbase.

Creator Tokens

Creator tokens are tokens created by content creators to reward their fans and incentivize them to support their content. These tokens can be used to unlock exclusive rewards, such as early access to content, discounts, and other rewards. These tokens are typically used by content creators, such as YouTubers, musicians, Twitch streamers, and podcast hosts, to reward their fans for their support.

II. Planning for a Social Token Project 

Before launching a social token project, it is essential to create a plan that outlines the project's objectives, roadmap, and budget. This plan should include things like the economics of the token (such as the supply, circulation, and rewards), the target audience, the marketing strategy, and the legal considerations. Additionally, one must take into consideration the platform that the token will be launched on and the team involved in the project. 

What Does the Issuer Need to Figure Out While Issuing Social Tokens?

Issuing social tokens has become an alternative way for businesses to raise capital and incentivize engagement. But how do you know if issuing social tokens suits your community and fans? Issuers should consider a few key points before jumping into the token market.

The first thing everyone should consider is their potential token holders. Most social tokens are successful because they have a clear mission and community behind their mission. Some of the most successful social tokens have come after establishing a loyal customer or community. So, before you consider issuing a social token, you must first understand your community, fans, or customers. If you believe a social token can provide more value, it’s time to move to the next step. 

After agreeing to launch a social token, the issuer must determine the utility they will provide their holders. The utility of the token is a crucial decision as it will play an essential role in determining the value of the token. 

Listed below are some ways in which social tokens can provide utility. 

  • Access: Fans may buy the tokens simply for the access they provide. The idea of feeling a part of an exclusive and resourceful community is a critical value that social tokens enable. Types of access can include exclusive events, NFTs, discounts, and more. 
  • Engaging a Community: Social tokens as a reward can greatly incentivize engagement within a particular community. Members can be rewarded with social tokens for labor, community management, promotion, and interaction amongst the community. $MOONEY and $GCR are examples of social tokens that have been used to reward their members for contributing to their community.
  • ‍Self-Governing a Community: Social tokens can be used for community governance, allowing token holders to participate in crucial proposals and decisions. This type of democratic participation has been seen in DAOs — which often require a set amount of tokens to vote and make decisions. The CULT DAO sets itself up so that the top 50 holders of dCULT are the only ones allowed to make proposals to the community.

Also, the token issuer must consider the number of tokens they want to distribute. Luckily, some platforms will help you with this step. 

Finally, issuers need to consider the legal implications of issuing social tokens. Each jurisdiction has its own set of laws and regulations that must be followed, so it’s important to consult with a lawyer to ensure that the token sale complies with local laws.

III. Choosing the Right Platform for Your Social Token 

When creating a social token, one of the most critical decisions is to choose the right blockchain/platform. Selecting a suitable blockchain is crucial because it will ensure that the token is made quickly, securely, and smoothly. Different platforms may be more appropriate depending on the type of token being made.

For example, one of the most popular types of social token structures is an ERC-20 token, a token launched on the Ethereum blockchain. Ethereum is a decentralized platform built on blockchain technology and allows users to create tokens compliant with the ERC-20 standard. This platform is popular due to its decentralized nature, making it secure and reliable. Ethereum also has a large and active user base, making it an ideal platform for launching a token.

In addition to Ethereum, many other platforms are available for launching tokens. For instance, many Fan Tokens have been launched on the Chiliz platform. The Chiliz platform is a sport and entertainment-focused blockchain-based platform that allows users to launch Fan Tokens. These tokens are designed to represent a club, team, or organization and are used to reward supporters with exclusive benefits. Furthermore, the Chiliz platform provides users with various tools and services to help them successfully launch and manage their tokens.

Another popular platform for launching social tokens is the Binance Smart Chain platform. This platform is built on the same blockchain technology as Binance and allows users to quickly and securely launch tokens. Additionally, Binance Smart Chain also offers a range of

decentralized applications (dApps) that can be used to manage and interact with tokens.

Furthermore, the platform also provides users with a range of tools and services to help

them launch and manage their tokens.

Lastly, Rally is a platform for creators and their communities to build independent digital economies. The platform allows existing influencers to monetize their content, allowing their fans to earn rewards. 

IV. Developing & Launching Your Social Token 

Luckily for many creators and communities, many platforms will develop the social token for you, which includes setting up smart contracts, testing the code, and launching the token successfully.  But, with so many platforms available, how do you know which is right for your project? Let’s look at some of the most popular platforms for launching social tokens and discuss the factors you should consider when deciding.

  1. Rally: Rally is a platform for creators and their communities to build independent digital economies. The platform allows existing influencers to monetize their content, allowing their fans to earn rewards.
  2. Roll: Roll is a free app that lets you earn and redeem social tokens with your favorite creators. The Roll network mints branded digital tokens unique to your online presence, allowing you to own, control and coordinate the value you create across platforms.
  3. Chiliz: The world's leading blockchain and fintech provider for Sports and Entertainment. Chiliz has developed the Socios.com sports fan engagement platform built on the Chiliz blockchain infrastructure & uses $CHZ as its exclusive on-platform currency.
  4. P00LS: P00LS works with creators and brands to issue social tokens, the currencies of their creative universe. P00LS assists creators and brands to deploy their social tokens on the Ethereum blockchain, an open-source protocol. P00LS enables engaged communities to earn social tokens for free by showing up to token drops and completing specific incentives designed by creators.
  5. Cultos: Cultos enables brands to bring rewards, loyalty & influencer marketing to web 3. The platform enables a brand or team to select any desired actions available from API’s for a mainstream social media channel, as well as offline engagements such as purchasing brand merchandise or attending brand-sponsored events.

No matter which platform you choose, launching a social token can be a powerful way to reward your most loyal supporters and provide exclusive access to content. By carefully considering the factors discussed above, you are better prepared to choose the right platform for your social token.

V. Benefits of Social Tokens

Social tokens offer a variety of benefits to both holders and issuers. Here is a breakdown of some of these benefits in detail. 

The issuer of Social Token:

Growing With Community 

Social tokens are a great way to grow alongside your community or fans. You can use social tokens to share success with your fans and community through exclusive access and rewards. Token holders are now incentivized to see the community, brand, or creator succeed. 

Monetization 

Creators and communities can more fairly monetize their offerings, as there is no intermediary, which means they can retain their artistic control. Additionally, social tokens open an opportunity to engage with a new audience. 

Incentivizing Engagement 

Think of social tokens as a loyalty reward program. Social tokens as a reward can greatly incentivize engagement within a particular community. Social tokens can give brands/communities or creators a deeper alignment with their fans. 

Self Governing a Community 

Social tokens can be used for community governance, allowing token holders to participate in crucial proposals and decisions. This type of democratic participation has been seen in DAOs — which often require a set amount of tokens to vote and make decisions. 

Holder of Social Token: 

Token Gated Content & Resources 

Owning social tokens can provide holders with different types of exclusive content & resources. Depending on the token, holders of social tokens can access token-gated content such as exclusive events, information, NFTs, discounts, and more. 

Exclusive Network 

The idea of feeling a part of an exclusive and resourceful community is a critical value that social tokens enable. Communities such as BANKLESS DAO, Friends With Benefits & Global Coin Research Investment all have extensive and resourceful communities that can change your life. 

Rewards & Earning 

Members and token holders can be rewarded with social tokens for labor, community management, promotion, and interaction amongst the community. Simply, token holders can be rewarded proportionally for their work in the community. 

Voice & Voting Power 

Imagine being able to have a say in your favorite project or team. Social tokens can be used for community governance, allowing token holders to participate in crucial proposals, decisions, and voting power.

VI. Post-Launch: Managing & Growing Your Social Token Community 

Once you’ve launched your social token, the work doesn’t stop. Now it’s time to execute the roadmap you made in the beginning.  In the post-launch period, you must continue to be transparent with your token holders to build their trust. By communicating with your token holders and executing your roadmap, you showcase that you are a project to be trusted. If you fail to do this, you risk losing your token holders and damaging your brand.  Additionally, take the time to listen to your community and understand their needs. The more you nurture your community, the more likely your members will continue to help you succeed. 

Along with communication, other tasks include monitoring the token's performance. The process of managing social tokens can be challenging, and you need to be able to track the number of tokens, wallet holders,  their value, and the transactions associated with them. Fortunately, there are several tools and platforms that can help you manage your social tokens.

CrowdPad

Crowdpad is a tokenized community-building platform for the everyday creator. Creators can launch their own token and have access to tools to engage and rewards their fans. 

Coinvise 

Coinvise is an open platform on Ethereum where creators can launch a social token & build a tokenized community. The tools can be used to airdrop tokens, design lockups & create quests. 

Bonfire 

Bonfire is a website builder that enables creators to create unique digital spaces to share exclusive content, curate intimate experiences, and engage directly with your fan

These are just a few examples of tools and platforms that can help you manage your social tokens. There are many more out there, so make sure to do your research to find the best one for your needs.

VII. Conclusion

Creating a social token is a complex process that requires a deep understanding of the underlying technology and the legal and regulatory considerations of launching a token. This guide provided an overview of how to create social tokens, from understanding the different types of tokens to executing the token sale. By understanding the different types of tokens and the process of creating tokens, you will be well prepared to embark on your token journey.

At PurpleTrader, we make discovering and buying community tokens simple. 

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