Social Token, with the rise of the Creator Economy, has attracted widespread attention in the crypto circle. However, most users’ understanding of it only stays at “it is a coin”, which is not much different from other coins, and they have never thought about what problems social tokens solve and its underlying logic. If we want to fully understand the underlying logic of social tokens, we need to start with a closed-loop chat for value realization.
Ever since commodities can be traded in currency, economists have begun to think about the mysteries of pricing. And “value” is generally referred to as a general expression of the relative prices of goods and services.
Economists have different theories for defining value. From the “intrinsic value theory” based on the value of the objective object to the “labor value theory” based on the amount of social labor input required, there are also the “exchange value theory” based on the subjective consciousness of both parties advocated by the Marxist school. The “monetary value theory” in which price is the only criterion for value judgment, the “right value theory” which is separated from the practical value theory and labor value, and the “subjective value theory” in which customer demand is the subjective criterion and the marginal effect is the leading factor. “Marginalism”, different theories define “value” from different dimensions.
All things need to go through three steps to realize the value of the closed loop: the creation, transmission and capture of value.
Value creation, transmission and capture
The creation of value is that the ontology of value generation is invested in corresponding production capital to generate and output value through different interactive activities, and value transmission is to transfer value from the production end to the end user through the carrier, and the final value capture determines the distribution of the final value effect. .
From the perspective of value creation, the value creation of individuals is divided into two categories. One is to independently realize value creation through its own resources and using individuals as operating entities. The second category is through joining the organization, giving play to the relative advantages of individuals, cooperating with other individuals, and pooling resources to maximize efficiency.
With the advancement of technology, isolated islands of information and resources have been gradually opened up, and resource utilization has been greatly improved, which has also made personal value creation more feasible. The Internet platform aggregates humanity’s “most scarce resources”, attention, and provides a platform for individuals, so that personal value creation channels are no longer limited to the traditional realizable skills, which also open up a new economic market: creators economic.
From the perspective of value transmission, the value production side will price the value carrier based on the market, and the user side will judge the value of the carrier from a subjective perspective and decide whether to exchange value. Take the creator economic market as an example. Value carriers are no longer limited to physical objects and face-to-face interactions. The carriers that creators can give value have more choices under the blessing of technology.
From the perspective of value capture, each value exchange includes different participants, which are generally divided into the production end, the middleman, and the end user. The value captured by each party in each exchange process is different. In the creator economy, the production end is the value creator, the middleman delivers value to various platforms and service providers, and the consumer end is the terminal for the ultimate value exchange. These three parties will eventually capture value to varying degrees.
The value creator needs to pass the value to the end user through the value carrier and finally exchange value to cover the cost of value creation, and all parties involved in the process complete value capture.
However, in the world of Web2.0, this closed loop is restricted to varying degrees. As Naval said on Twitter, the Internet in the past was a temporary loophole before we knew how to build an open social protocol. So what are the problems with the creator economy built on this loophole?
Creator economy built on loopholes
From the perspective of value creation, the current value creation model is extremely limited. Creators can only export the value created within a fixed period of time in a specific way, and value recipients can only exchange value in a specific way. For example, the anchor can only reward fans in a platform-specific way when the broadcast is launched. For example, short video or text creators can only create value with a specific output carrier, and the recipient decides whether to value according to the value produced in a single time. exchange. Therefore, value creation individuals cannot release value in an all-round way, and the market cannot discover and capture continuous value.
From the perspective of value delivery, first of all, the created content will be subject to official review and supervision, and not all value can be completely delivered. Secondly, most of the value transfer needs to be attached to another carrier. According to CBINSIGHTS statistics, most creators need to rely on cooperation with brands to deliver value and complete value capture, which also increases the resistance to value discovery, and the initial cold start cost of creators is extremely high. At the same time, affected by the value delivery platform, value creators need to cater to the platform’s tonality in order to maximize its value delivery efficiency.
Image source: CBINSIGHTS
From the perspective of value capture, centralized middlemen have captured the most excess value. Taking Douyin as an example, the Douyin platform draws as much as 30%-45%, plus other intermediaries, and ultimately the value captured by the creator is squeezed by multiple parties. Only the direct value exchange between the value creator and the value user can ensure the optimization of the value capture of both parties.
The application of blockchain technology, the protocolization of the platform, and the tokenization of individual value creation may be able to solve these problems.
Social tokens will reshape the value of the creator’s economy and achieve a closed loop
The advantages of realizing intermediaries in a decentralized network in the form of a license-free agreement should not be necessary for friends who understand blockchain technology. In a permissionless environment, the value can be completely transmitted, and there is no risk of rent-seeking for value creators and users. The information in the domain of all participants can be used in different protocols without resistance, and the agreement can be completely in accordance with the participants. Change in demand for democratic iteration.
The essence of individual value creation tokenization is actually the issue of personal minting or issuing personal credit. We will call it social tokens for the time being. First of all, social tokens allow the value created by value creation individuals to be continuously priced by the market, which means that value creators can judge whether the value created by them is effective (whether the value is accepted by the market) based on the price of social tokens. The subjective judgment on the value created by the creator can optimize the resource allocation of the creator. Secondly, social tokens add liquidity to value, which makes individual value creators an investable target, and because value creators continue to create value, this also makes social tokens an equity asset. When social tokens represent individual rights and interests, then the imagination of the practicality of social tokens is unlimited. At the same time, social tokens allow value creators to obtain early funding. The early cold start cost can be perfectly solved by issuing social tokens, and the market will make preliminary judgments on the value of value creation and select high-quality targets. Finally, social tokens can extend the audience to the world. Compared with the fragmentation of the regional resources of the Web2.0 platform, social tokens integrate global resources and can capture value across regions.
So why should social tokens use blockchain technology? As Haseeb, a partner of Dragonfly Capital, said, for Satoshi Nakamoto, Bitcoin actually has no choice. A decentralized technology must be used to realize Bitcoin, so blockchain technology is also available. Before Bitcoin, many people have tried to issue non-sovereign electronic currencies (DigiCash, E-gold, and Liberty Reserve), but the final result was officially stopped. For officials, the stability of the financial system is the most important thing.
For the open economy of Web3.0, the rapid development and iteration of technology will gradually make up for the loopholes in the past Internet era. Naval predicted in the same tweet: Initially, the Internet is used to transfer data, then it is used to transfer scarcity (Bitcoin), and then it is used to transfer computing resources (Ethereum and other public chains), and what follows will be Transmit social identities and social graphs.
Social token track
There are already many on-chain protocols trying to issue social tokens, such as Roll, Rally, Fyooz, MeTokens, Zora, Coinvise, Calaxy, and 27s. However, the issuance of social tokens is only the first step, which only completes the capitalization of value, and its practicality needs to be realized through different application scenarios. In the end, social tokens may be able to become commodities with practical value, capital assets with investment value, and a medium of exchange with monetary value.
Theory of value (economics)：https://en.wikipedia.org/wiki/Theory_of_value_(economics)
Why Decentralization Isn’t as Important as You Think：https://haseebq.com/why-decentralization-isnt-as-important-as-you-think/
Self-Issued Credit: A Monetary Solution：https://www.corbettreport.com/self-issued-credit-a-monetary-solution/
The Creator Economy Explained: How Companies Are Transforming The Self-Monetization Boom：https://www.cbinsights.com/research/report/what-is-the-creator-economy/
The Personal Token Revolution：https://medium.com/@bramanathan/the-personal-token-revolution-754e3fe0987e
New Trends in 2021: List of 7 Social Token Issuing Platforms: https://www.theblockbeats.com/news/21408
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/on-how-social-tokens-will-reshape-the-creator-economic-market/
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