How to Leverage Social Tokens for Long-Term Growth

2020 experienced a marked acceleration in the issuance of social tokens, with a wide range of groups and individuals issuing their own tokens to supercharge their communities. For those new to the term, social tokens are used by individuals or groups of people to help coordinate and reward work that contributes toward a community’s goals. Given its potential to distribute value more efficiently and better align interests, it’s become crystal clear to me that these types of tokens will have a huge impact on community building going forward. While it’s an incredibly exciting time for community builders, the playbook for properly implementing a social token is still a work in progress. Among all the social token experimentation taking place, it’s also become clear that community builders need to be aware of speculators and the role they will play in your community once a token is introduced.

Ingredients for a Strong Community

With the rise of social tokens, we have a new tool that did not exist before: a way to share value and success with a group of people who contribute toward a community’s goals. On its face, this sounds incredible and gets me hyped about how anyone from any corner of the world can share in the value creation of a community they care deeply about and contribute to. Creators can now activate and empower their fan base by allowing them to participate in their rise to success. A mission-driven community can now attract and further incentivize passionate members to help build it into the best version of itself. We are at the dawn of a new era where any community can allow members to share in its success and I expect social tokens to become a critical piece of infrastructure going forward.

The Role of Speculation

If a significant amount of your community is composed of members who are just in it to make a quick buck, you will be sorely disappointed with how your community evolves.

Speculators are best known for being genuine about primarily one thing — making money as quickly as possible. Don’t let the genuineness of your community suffer due to members who don’t care that much about your mission.

Promoting Long-Term Commitment Through Vesting Schedules

It’s also important to consider additional tools that communities can use to promote a committed member base. Transitioning decision-making to a community goes a long way toward empowering members to stick around for the long term, and the JAMM community is an important example of how one can do so. What started out as a weekly Substack newsletter by founder Brian Flynn, has transformed into a community with a social token ($JAMM) that rewards members for contributing toward its mission of exploring the intersection of creators and crypto. Since all unissued tokens are held in a Gnosis Safe (a wallet that requires multiple signatures to execute a transaction), the community votes to allocate how tokens are distributed every month in service of its mission. Also, tools such as Superfluid and Sablier allow for continuous programmable cash flows that can reward members for specific actions in real-time (such as for help with running a live Discord event, or time spent moderating a community-sponsored virtual panel), making the act of rewarding members who add value to a community as tangible as possible. The design space for building a sustainable community is constantly evolving and there will be many ways to ensure long-term buy-in, in addition to vesting schedules.

Sustainable Communities = Stronger Communities

This post was first published on Forefront. Follow me on Twitter at @chris3collins as I continue to document my journey into social tokens.

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Chris Collins

Head of Biz Ops at Foundation // prev Principal at Human Ventures. @chris3collins — chocovc.com