Social Tokens, Crypto-gated Communities

One of the emerging trends of 2020 has been “Social Tokens”, where people issue their own tokens for various purposes, some of which seem to border on securitizing the self. Colin Harper has written about how personal tokens raise red flags ¹, and those are all valid concerns, but as he notes they do not seem to be preventing many people from launching this kind of token.

Some examples:

• Frenchman Alex Masmej, 23 years old, recently raised $20,000 on Ethereum by tokenizing himself. Now he wants his investors to vote on his life choices - Coindesk ²

• FC Barcelona’s Token Sale Hit $1.3M Cap in Under 2 Hours - Coindesk ³

• Lil Pump Is Doing a Social Token Called PumpCoin - Coindesk ⁴

• Rapper Lil Yachty Sells Out Social Token in 21 Minutes - Coindesk ⁵

When established entities with large followings like Barcelona FC start experimenting with using tokens to promote engagement, it starts to seem likely that this kind of token will be the first contact many people have with blockchain technology.

There’s an app (tryroll) which allows anyone to easily mint their own tokens and suggests they start offering services in exchange for these tokens.

There’s a platform (fyooz) which invites readers to “Become a token”, complete with big flashy image promoting the concept to “Monetize Your Fame”, there may be some brainwashing attempt going on there so be careful not to get sucked in. At fyooz, token generation is a more bespoke affair and is more for people with fame to monetize, like Lil Yachty.

A new and interesting trend I noticed in relation to “Social tokens” is the private Telegram channel which requires a balance in some token to access. Private groups and “paid groups” are not new of course, and are notoriously the domain of con artists, but the token-secured Telegram chats are an interesting development that seems to be working for some communities. “Access” is one thing that anyone can sell, and there are tools now which can tie that access to a token, thus providing a practical feature of that token which can be delivered in an observable and ongoing way. In the process this kind of barrier can make community management much easier as it makes the group less accessible to casual trolls and attaches a real cost to an account.

These private channels seem to be central to the appeal of a number of social tokens in this optimistic overview ⁶, along with promises about shares and airdrops which are probably not binding in any meaningful way.

Restricted access to a discussion channel is also part of the premium offering for popular DeFi news source The Defiant, and I guess we’re going to see this kind of pay for access media more and more, in the crypto space and beyond. The ad-supported model is tough, so people are keen to move away from it, and a “freemium” model with some public offering and more for a fee is popular in other domains, like gaming.

One of the drivers of much analysis and reporting in the cryptocurrency space is edge. People value information that allows them to understand market phenomena better or faster than other participants and make the right moves at the most advantageous times. This kind of information can often fetch a good rate in the market when sold as a club good.

Any kind of paywall is however creating a huge barrier to many people who could otherwise benefit from an information resource. Levelling the playing field is one of the crypto aspirations I like, it’s good that more people can learn about this stuff more quickly and that they don’t have to invest money up front in resources to help them. There would be something sadly ironic about a crypto commons that is publicly recorded and accessible through distributed ledgers, but where the best accounts of what’s going on and how it works are behind paywalls.

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