What are Social Tokens and How Do They Work?


Cryptocurrencies are changing the way that the current financial systems work. Many new financial avenues have either improved or completely changed using cryptocurrencies such as flash loans and cryptocurrency staking.

One such innovative solution to come out of the cryptocurrency market is Social Tokens. This article is going to discuss in detail what social tokens are and what are their various benefits.

What are Social Tokens?

The current world and lifestyle have put a lot of emphasis on social media and smartphone applications. There are many social media platforms where people can interact with each other, and many of these sites are hosted by a myriad of social media influencers and content creators.

These creators generate revenue by gathering a considerable amount of followership from their consumers. The sites that are hosting these content creators allow them to earn money based on the number of views or traffic they can introduce to their website.

However, some of the top content creation sites online, such as YouTube, Instagram, TikTok, and Spotify, can claim as much as 45% of the profits from their creators. Therefore, many of the users working on these platforms may feel exploited and suffer from monetizing their work freely. Social tokens are a solution to these issues.

They are used to incentivize content creators who are unable to have full control over their net revenue. Social tokens remove the middlemen from the mix for content creators because they are decentralized social media platforms.

How do Social Token Work?

Social tokens are used to monetize the individual brand or network reach of online content creators. These creators can earn as much revenue in the form of social tokens as much as they can exert their influence on social media websites.

These tokens are awarded in the same quantity for these creators following their total views or amount of ad interactions. Several industries have started to adopt them, such as Arts, design, Gaming, infotainment, culture, e-sports, digital marketing, and other online disciplines.

Social media tokens incentivize content creators to bring more traction to decentralized social media forums.

Social tokens have started to cross over with other types of cryptocurrencies, such as NFTs and other decentralized tokens. Another benefit of social tokens is that they can increase their price appreciation over time. They grant full control over their revenue to the content creators. They can be deemed as an important instrument to ensure free and fair market practices.

Most of these tokens are built and issued by DeFi protocols hosted on the Ethereum blockchain. They are issued by decentralized social media forums such as Rally, Whale, Julien Bouteloup, and Global Coin Research among others.

Origin of Social Tokens

The idea of a decentralized social media platform is not new. This notion has been around since the introduction of the Bitcoin blockchain 12 years ago. However, the first official social token was introduced as recently as 2020. WHALE is often attributed as the pioneer social token, and it was created and introduced by an NFT collector named WhaleShark.

Another Social token that has been ranked among the first projects in this category belongs to NBA tokenized contract that was introduced by Spencer Dinwiddie. He sold the tokenized contract for $34 million in 2019.

Since then, there have been several social token projects introduced, and they have contributed by granting greater autonomy to the social media creators who are associated with these decentralized social media platforms.

Types of Social Tokens

Social tokens can be classified into different types based on their functions and working models. Some of these types are mentioned as under:

Personal Tokens

Personal Tokens are issued by a particular channel, account, or creator. They are issued by the content creators to grant special privileges and incentives to their followers. They can be understood as special membership permission or VIP subscription options. They are created by online personalities, actors, politicians, comedians, artists, singers, and other forms of online influencers.

Personal tokens also grant freedom to these creators of deciding what benefits they want to grant their followers and how much the minimum requirement is set to access or unlock these perks.

By way of launching these Personal tokens, these influencers may also increase their value. David Bowie, a well-known name in the Music industry issued a tokenized cryptocurrency called the Bowie bond. The owners of Bowie Bond were promised a return of 7.9% per annum on all his music royalties that are generated by streaming services.

Another noteworthy, Personal token mentioned is RAC which was issued by Grammy-winning music artist Andre Allen Anjos. RAC holders enjoyed perks like access to exclusive playlists, airdrops, and personal access to the artist.

Personal tokens have been known to operate outside of the music industry as well. A French businessman Alex Masmej issued a personal token called ALEX by tokenizing himself. This token allowed the businessman to collect the required funds for his new social media platform.

In addition to getting many perks on his new social media platform operating out of the USA, the investors of ALEX tokens are set to receive a portion of his total income for the next three years.

Community Tokens

Community Tokens are created by a group of masses or members of an online organization that are interconnected with each other. They operate much like special entry options for a club or any other closed online community. The benefits of the community tokens can be very similar to the advantages that are offered by Personal tokens.

However, in addition to only income or other special benefits, community tokens also extend governance rights to their investors. On account of their nature, they are usually issued by Decentralized Autonomous Organizations or DAOs.

However, when a DAO issues a new Community token it already hosts a considerable amount of online followership. CoinDesk is a crypto news outlet and reporting platform; it issued a DESK token in 2022 at the annual Consensus festival.

The token was immediately introduced to the thousands of attendees. CoinDesk was able to get a head start with their tokens by organizing a free giveaway to the attendees of the conference who were able to make several purchases using their community tokens.

Whale, one of the first social tokens, is also a type of community token. The value of this token is pegged to some valuable NFT collections. This collection is called the Whale Vault. The estimated value of the Whale Vault has been estimated as high as $70 million.

The holders of the token have been able to benefit from the increasing value of this collection. At the same time, WHALE token holders also get access to special Discord Channels, events, and giveaways. The Whale tokens holders have become a member of an exclusive community that they can use to rent or purchase NFTs from the Whale Vault.

Participation Tokens

Participation tokens can be described as a further classification of community tokens. As visible from their names, these tokens can be automatically granted to the users who are participating in a particular event or partake in available subscription options.

The users may also earn Participation tokens to show their support or play their part in a given online project. One good example of a community token is KAI currency which is sourced from the TAIKAI community.

The KAI token is issued for freelancers, students, and other startups that are making their contribution to a new proposal. The top proposals manage to receive the highest amount of KAI tokens, and they can qualify for prizes. Meanwhile, the investors who are supporting these projects may also gain KAI tokens as rewards.

Another noteworthy community token is Friends with Benefits. This token is used to allow artists, creators, and other innovators to bring the FWB community together. The projects that win can earn the nominated prizes, and they may also share an edited version of the content that other members can unlock by purchasing the special membership.

Social Platform Tokens

Social platforms tokens are issued by decentralized social media platforms. Some of the biggest decentralized social platforms are TryRoll, Bitcloud, and Rally among others. These social media forums work in quite a similar manner as any other social media network.

The artists and other content creators who are contributing to these networks stand to earn a considerable amount of social platform tokens in the form of NFTs or other creating personalized tokens.

Rally has gained considerable traction on the network on account of earning $8 million within the span of a few years. Rally is a dApps that is hosted on the Ethereum network. Therefore, it can benefit the participants who are associated with the Ethereum community.

Another such project is TryRoll. It is also hosted on the Ethereum network, issues an ERC-20 token, and offers Ethereum wallet custodial services. However, TryRoll is reserved for users who can navigate through its deliberate complex user interface.

Advantages of Social Tokens

Here are some of the most visible and important advantages that can be attributed to social tokens:

Monetization Autonomy

One of the most visible benefits of Social tokens is granting a greater amount of autonomy to the content creators. On traditional social media sites, most creators are under pressure from the site owners for sharing a considerable portion of their revenue with them.

At the same time, most content creators do not own the content they have posted online.

However, with social tokens, the content creators do not have to share any portion of their income with middlemen between them and their subscribers.

At the same time, they have full control over their revenue stream and do not have to depend on increasing considerable followership or wait for sponsors to start making profits.

Community Interaction

Social tokens have removed the barrier of middlemen between content creators and their followers. Therefore, they have granted a unique opportunity and new methods for content creators and their subscribers to interact with each other.

At the same time, these content creators may also be able to incentivize their most loyal followers and fans by issuing specialized personal or community tokens. Such a community can come together to achieve a uniform task, such as a welfare project or other philanthropic pursuits, with greater success.

Assured Subscription

Social tokens are not just free subscriptions. These tokens have to be purchased by the viewers, and therefore they can be seen as a seal of approval or strong loyalty. Unless a content user is seriously invested in a particular influencer, they are not likely to make purchase their social tokens.

Unlike stocks or any other investment contracts, these tokens evaluate the price of a given social token based on the authentic interaction ratio using a smart contract. Therefore, the social tokens are bound to be a more reliable estimate of the online presence of a given influencer.

At the same time, the presence of smart contracts removes the need for any type of third-party facilitator or negotiator to settle governance disputes.


Social tokens are based on blockchain technology and they are also related to the projects that are hosted on blockchain networks. Therefore, these projects are protected by one of the most efficient security measures available online, which is based on encryption.

Unlike, Web2 sites and applications, these forums do not suffer from the threat of any possible attacks, and they are safe from the threat of data manipulation.

These sites are based on blockchain technology, and they may not need to depend on collecting personalized data to improve the user experience or earn revenue, much like traditional social media sites.

At the same time, they may offer exclusive wallet accounts to their users that come with state-of-art security protocols.

Shared Ownership

Social tokens have eliminated the need for third-party hosts for the online content that is contributed by the creators.

Therefore, these creators can now have full control and ownership over the material and work that they have generated. In this manner, social tokens have empowered the content creation economy.

On the other hand, some social token projects create unique interactive models between content creators and viewers. There are some instances where the users who are invested in the content creator may be able to enjoy the shared custody of a given contribution, such as NFTs or other artwork.

Since these co-ownerships are done through social tokens both content creators and their viewers can benefit from them.

Limitations of Social Tokens

Here are some of the noteworthy setbacks associated with Social tokens that should not be ignored;

Investment Risks

Social tokens are fairly new cryptocurrency models, and in their current form, they may be classified as unregistered securities. At the same time, since they have not been around for a considerable duration, it means that they are considered a risky investment. If a particular issuer of Social tokens undergoes any unfavorable changes, their investors can lose the value of the currency in a matter of small duration.

On the other hand, social token issuers are depending solely on their token investors rather than Venture capital firms. Therefore, these communities can be shaky as individual investors are unlikely to conduct the same amount of research into a new project on the same scale as a professional investment firm.

Regulatory Uncertainty

When it comes to social tokens, the lines for their regulatory clarity are still obscure. It means that they are vulnerable to any and every regulatory change in the future. On account of any major incident or any other type of government policy amendment, these platforms become illegal.

Such an unfavorable development can result in the overnight dismembering of the said community and the crash of the relevant social tokens. There are some cases, where these communities may be open to Lawsuits such as copyright infringement claims, liability concerns, and false advertisement to name a few.


The existing social media sites implement community guidelines and adherence to these rules. It means that the content creators on these sites cannot promote hate speech, or illegal activities, and refrain from any abusive or discriminatory behaviors. Some creators may view it as an attack on freedom of expression.

However, social tokens allow the creators full autonomy over their content. It can mean that they can spin out material that is uncensored and may be harmful to the public benefit. The node validators on these sites may be able to contain the spread of such communities.

However, creators with malicious intent can inevitably get away with posting unruly material on these sites to gain more traction by dabbling in controversial topics.


Social tokens are one of the latest innovations that have become possible on account of blockchain technology. The products have opened a new world of possibilities for all stakeholders in the content economy. However, they also carry a lot of limitations and drawbacks that should not be ignored. Developers are likely going to find new models and ways to rectify the current setbacks that will give a boost to such sites in the future.