In early 2018, I started writing about NFTs because it was the first time I wanted to download a wallet other than just speculate on tokens in decentralized exchanges. The bull market just hit its peak, and over 90% of MetaMask users were trading tokens on EtherDelta, trying to snipe the latest ICO that hit the market, not too different from NFT whitelists in the last bull market.
The question that was constantly on my mind at the time, along with others, was “what is going to make crypto cross the chasm into the mainstream?” Blockchain gaming seemed to be the obvious answer, since gaming had large impacts on previous paradigm shifts in technology.
If you weren’t around in 2019 and I told you how many users used the most popular decentralized application , you wouldn’t believe me. MyCryptoHeroes, a game built by a small team in Japan, had ~3800 users as the top decentralized application in crypto. This was less than three years ago. OpenSea only had ~600 users around this time. EOS was gaining traction from other popular blockchain games like EOSKnights, but suffered validator collusion.
We all know what happens after that.
There’s been a renewed interest in social tokens over the past few months because of the rise in NFTs. This post is both a reflection of social tokens over the past year and how the rise of NFTs can shape the future of social tokens.
Currently, social tokens are valuable because of tokenized programmable access. If you hold 55 Friends with Benefits (FWB) tokens, you can access the private discord that has some of the top creative talent in crypto. Tokenized programmable access became popular in the summer of 2020 with a discord bot called Collab.Land which let any token community (ERC721 or ERC20) create their own token-gated discords. This led to some innovative use cases like token-gated discord for Neolastics, ESSAY holders, and more.
I have a social token called $JAMM which I tried using for a token-gated newsletter. At the time, it cost about 100 tokens ($50) to read the newsletter each week. While this led to better price discovery for my content, I wasn’t able to realize any of the value from the content that I wrote and it even limited the distribution of the content because it was behind a token paywall.
In summary, while tokenized access was the first type of social primitive that showed the potential of tokens, it alone lacks the ability to create meaningful sustainable social token communities. Here are the problems it suffers:
In traditional social networks, our feed is created from scratch based on who we follow, who we interact with, and what we post. Eugene Wei’s famous status-as-a-service essay was the holy grail of social media, describing how participants behave in new platforms. Status was the scarce asset, and participants did work to earn the scarce asset and accrue social capital.
This model is now being flipped on its head as we enter a stage of decentralized social networks. There are no new users in decentralized social networks, and everyone is a participant
Decentralized social networks are unlike traditional social networks in that they’re interface agnostic. There isn’t a “town-hall” or “place of gathering” where attention is funneled through. Attention is split up between interfaces, but the sum of attention across all interfaces on the decentralized social network is greater than if it was a centralized platform.