Web3 Crypto is just as Fungible as it (isn’t)
Today, the crypto landscape is predominantly occupied by other technologies, such as Decentralized Finance (DeFi) and Non Fungible Tokens (NFTs), peaking at a mesmerizing $100 billion and $40 billion market shares respectively in 2021.
Particularly for NFTs, this application is no longer simply concerned with creating initial value and hoping that others ride the wave and perceive it to be the same. There are emerging applications in the space with hybrid implications (as in, real-world and virtual world) such as Afterparty, wherein being a proud owner of one of these digital pieces of art grants one access to their exclusive ecosystem.
There was also lots of buzz generated around IreneDAO, a collection of photos of an individual in various poses and associated memes which was meant to prove as an experiment that creators can also be decentralized, in the sense that they no longer have to depend on third-party platforms to monetize their work.
However, the common denominator among all of these projects is that they’re all dependent on the Non-Fungible aspect of tokenization. We at BitFans believe that there is also huge potential for Fungible tokens to bring about great strides in the creator economy. In this article, we tackle why we think that Community Tokens are the next big application in crypto. They are also oftentimes referred to as Social Tokens, Creator Tokens, or Fan Tokens.
What’s the difference?
While NFTs derive their value from being unique and scarce, Community Tokens are fungible, meaning that they are interchangeable and do not necessarily highlight exclusivity as the main selling factor. This simply means that while your NFT has its own specific value tied to it, Community Tokens can be traded at any time at the same quantity for the same price.
What about Social NFTs?
Social NFTs are a hybrid sub-application that involves granting the owner a certain level of access to a community, an event, a product, or more, depending on how its incentive system is designed. This is a bit more interesting, as it means that NFTs can be valued depending on what benefits they offer.
What gives Community Tokens the edge?
Community Tokens are essentially virtual loyalty cards tied to a business, brand, organization, or individual. Just like Social NFTs, these tokens provide a level of access to various perks in an ecosystem. However, different from NFTs, they are fungible which means that volume matters. The more Community Tokens are held by a member, the more benefits they can receive based on how the token is designed. Essentially, this is where fungible and non-fungible diverge .In this case, it doesn’t matter where you get these Community Tokens from, in stark contrast to NFTs where you need to obtain an exact token to receive the value that comes with it.
What are some applications of Community Tokens?
Respective communities and individuals are developing their community token ecosystems for various reasons. Community tokens are crypto tokens developed and disseminated by individuals or communities. The objective of each community token is completely dependent on who and why it was developed.
For example, one could utilize Community Tokens in order to create more exclusive online groups, where ownership grants individuals access to them. SWAGG is an example of a token that utilizes this application, by requiring an individual to purchase 10,000 tokens to gain entry into their ecosystem.
An influencer or an individual can also use Community Tokens to identify their most loyal fans. Setting up this digital ecosystem allows them to align with what their supporters want from them, which could be a wide range of things such as one-on-one calls, online gatherings with other fans, exclusive, behind-the-scenes content, and many more.
So what’s in it for the fans? As exciting as exclusivity and perks sounds, there obviously needs to be something that ties this all in together, right? Correct. Perhaps one of the more intriguing aspects of this emerging application is the fact that for the first time ever, relationships between creators and their fans becomes a two-way street.
Previously, supporters were limited to things such as commenting on a video, leaving a like, subscribing to a channel, or purchasing their merchandise. This of course leaves them craving for more, which is where tokenization comes into the picture. Owning a certain creator’s token would mean that fans now also gain exposure to the upside of their brand. Thus, these tokens not only grant fans with an unprecedented level of direct access to their favorite creators, but allows them to grow alongside their creators as their community does over time.
The importance of the token increases as the community expands. Unlike NFTs that are one of a kind, more community tokens can be minted and issued to cater to one’s growing ecosystem!
Advantages of Community tokens
At a whim, platforms today like YouTube and Twitch can issue a ban that could lead to one losing access to their supporters .Tokenization essentially decentralizes a creator and their community. This means that they’re no longer dependent on particular platforms for them to gain access to their audiences.
2. New Interactive Experiences
Community Tokens bring unique ways to interact with creators. They can gain voting rights for fun decisions, gain entry into communities, or even RSVP into exclusive in-person events!
3. Can work alongside NFTs
Community Tokens and NFTs may be on the opposite sides of the coin, but that doesn’t mean that creators need to choose one or the other.
What’s the outlook for Community Tokens?
The most significant barrier to mass adoption is that the vision of crypto coins is still unknown to multiple. When a person does not understand something, they cannot be expected to support it. Regardless, this concern will vanish when community tokens are widely acknowledged and received by communities and enterprises, which we are already seeing today .They’re going to play a massive role in the Creator Economy for years to come. Businesses all over the world have recognized the power that tokenization brings for their organizations, and soon, individuals will too.
Based on value growth, these tokens are created on the “ownership economy” principle. BitFans, through its Creator Launchpad, enables one to mint their Community Tokens, issue them to fans through an offering, and begin to design incentives around them. In the coming years, we will see many creators leveraging this and growing their ever-present global communities to unprecedented heights.