In our recent post, we did a deep dive on one of the hottest trends in crypto: social tokens. To review, a social token is a blockchain token which is sold or issued by a content creator. The social token is a smart contract between the holder and issuer, entitling the holder to certain privileges or access. Social tokens usually offer exclusive experiences, such as early access to new content, membership in an exclusive group or chat, or meet-and-greets with the creator themself.
But before we can talk about social tokens and social NFTs, we need to talk about the precise definition of “tokens” and “NFTs.” A token is the base unit of a blockchain network. Bitcoin and Ether, the two best-known cryptocurrencies, are both tokens you have probably heard of. Tokens are the tradable element of blockchains which you can use to invest or make purchases, but they also underlie the function of the blockchain ledger. The mining or staking of tokens is what powers the blockchain as it executes transactions and records them immutably. (Check out our articles on consensus and token distribution for a more detailed explanation of these concepts.)
Cryptocurrency tokens like Bitcoin and Ether are fungible. That means they are completely interchangeable with each other, and each individual token has the same value as any other. Traditional fiat currencies are fungible too: every dollar has the same value as any other dollar. NFT stands for “non-fungible token” meaning each token is different and unique. That’s why NFTs are often used for art -- you wouldn’t just trade a painting for any other painting right? You might end up trading the Mona Lisa for a kid’s arts and crafts project! Here we get at the most important difference between regular tokens and non-fungible tokens: regular tokens are completely interchangeable, whereas NFTs are unique.
Now that we covered that, the difference between social tokens and social NFTs is pretty easy. Social tokens are fungible, with each one the same. That means they usually all carry the same privileges, access, or benefits. Social NFTs can be completely unique, so that each one entitles the holder to different things. This can make for really intriguing marketplaces, where NFTs are valued differently in accordance with the benefits they offer. However, this can change how the tokens are perceived. Some social token holders view their tokens as investments in the career of a content creator. As their profile rises, so does the value of the tokens. If they want to bet big on that creator, they buy more tokens. While social NFTs are still attached to the creator, it matters exactly which NFT you get and the benefits it offers, meaning a slightly different approach for collectors and investors.
Let’s take a look at some of the biggest social NFT collections around:
If you spend any time in the NFT community, it will not be long until you see a Bored Ape. The Bored Ape Yacht Club (BAYC) is a collection of monkeys and one of the most popular NFT collections. Lifetime trading volume for the collection is above $500 million and individual Bored Apes have sold for nearly $3 million!
There are 10,000 Bored Apes available, each with its own expression, style, and accessories. The uniqueness of each one is enabled by non-fungibility, and causes certain Apes to be more valuable than others. The token attached to each Ape functions as your membership card to the Yacht Club, a members-only metaverse for Bored Ape owners. Features include “The Bathroom,” a graffiti-wall for members and an arcade game. The BAYC Discord has 13,000 members and their Twitter community is one of the strongest. The community effect is enhanced by the many famous and important people who own Bored Apes. Basketball legend Steph Curry has popped into the BAYC Discord and many other NBA stars have aped in as well. The Apes even got a write-up in the New Yorker. Bored Apes are one of the most valuable NFT collections, second only to CryptoPunks.
Marketing and business guru Gary Vaynerchuk launched his social NFT collection VeeFriends this year to “test, learn and understand everything about” NFTs. There are 10,255 VeeFriends with designs hand-drawn by Vaynerchuk himself. The NFTs are tiered by the privileges they offer, and those that offer the most valuable access to Vaynerchuk are scarcest. Experiences include mentoring sessions, wine tastings, and even a fishing trip! Every VeeFriends NFT gives the owner free admission to the annual VeeCon meetup through 2024. The VeeFriends social aspect is also enhanced by an active Discord. With VeeFriends, “the token is the key that unlocks you into Gary’s world.”
Afterparty was launched in the hopes of building a decentralized “creator economy” for Web3. The platform is built on a Polygon sidechain and allows creators to easily mint their own social NFTs for their fans with an emphasis on events. Purchasing tickets to a live event requires Creator Coins for both the creator and Afterparty, rewarding the artist and keeping the platform afloat. Afterparty launched quite recently in June, so it is still in its infancy. However, the platform is launching NFTs to expand beyond events into a wide range of content and experiences. This is one of the most exciting aspects of social NFTs: the ability to bring creators and fans closer together.
The aptly-named Social NFT is a dedicated marketplace for social NFTs. The platform is built on Binance smart chain and links directly with creators’ social media accounts. This means their existing content can effortlessly be minted as NFTs. Popular creators can easily leverage their existing fanbases by linking their accounts to the platform. The proprietary SNFT token is the currency for purchases on Social NFT, and also used for governance and powering the network. Can you imagine the resale value from snapping up viral tweets or Instagram posts before they are big? Social NFT provides the profitability and provenance of NFTs for the wild world of social media.
Social NFTs allow content creators to connect on a deeper level with their fans, and give normal people access to their favorite celebrities. This relationship allows creators to sidestep networks, streaming services, and social media sites to retain more control over their work and the revenue it generates. This is one of the amazing decentralizing effects of blockchain technology and a hallmark of Web3. Social NFTs also allow like-minded people to easily build communities around the things they love. Are you going to buy any social NFTs?
Pontem Network is building the premier experimentation network for Facebook’s permissioned Diem Blockchain. Hopefully our technology will introduce Facebook’s huge audience to NFTs, as well all the other amazing aspects of crypto. Stay up to date with everything Pontem by subscribing on Medium, following us on Twitter, and joining our Telegram chat.
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