Eric Siu breaks down two types of social tokens: personal tokens that let fans invest in creators' earnings, and community tokens that unlock exclusive access and voting rights. He uses Lil Nas as an example of how a musician's token value could spike with fame, and shows how SWAG tokens work for merch and governance. Tokens align incentives so holders profit when the brand succeeds, turning them into motivated promoters.
Today we are going to talk about how social tokens will affect marketing. But before we do, my name is Eric Siu and I have a portfolio of different marketing businesses and I'm here to help level up the world. So let's go ahead and get started. So social tokens in the world of crypto, let's define— there's really 2 versions right now. You have personal tokens, right? That's number one. And you have community tokens. So let's take a look at my screen over here and there's a good thread. From Jess, and he says that the term personal token is used too broadly right now. And then Kermin and Alex are not the same as Karma and Jam. So getting clear definitions on this is important. And so Alex and Kermin, so these are kind of two individuals over here. So I'll kind of highlight these. So these guys are Alex as an example. He tried to raise $20,000 to get a trip to work on crypto stuff in San Francisco. And he was basically saying, hey, like, I'll do some services for you. I will spend hours of time with you. I'll maybe even tweet something for you or I'll give you special access to a newsletter that I have. So in this scenario, an individual token, okay, is a personal token is where you can basically— you're kind of enlisting the services of someone. And in some cases, you can even do an income share agreement, meaning that Let's say someone's coming out of college and you invested in them and they say, okay, for the next 3 years, I will promise you, um, you know, up to $100,000 of my, of my earnings. Right. And that's kind of doing an income share agreement. So these things are— the space is still very nascent right now, but I'm just kind of giving you an idea of what the possibilities are. Okay. Now, community tokens are a little different. So you have JAM and KARMA. Okay. So, you know, community tokens might give you access to special Discord channels or Telegram channels. Or they might give you access to special events. But, you know, it's really being a part of the community. That's what really drives the value. Right. So, you know, you can call them community tokens, you can call them brand tokens. But at the end of the day, they all kind of fall under this social token umbrella. OK, so that means if I'm Nike or if I'm Coca-Cola, as an example, I can probably have a social token that's available. Those companies are a little too big. Let's use maybe like a startup as an example. You can have tokens, right? And basically the tokens will become more valuable if more people are talking about it, if more people are, if there's more utility for them, right? So if we go back to my screen over here, we could take a look at this example. Okay. So this is an example of Lil Nas. I'm not even sure if I'm pronouncing that correctly now. That's how old I'm getting. But he launched a token called Nas back then and created, created, well, this is a hypothetical, hypothetical example. So let's say he created 1,000 tokens, each worth $100. Right. And so you can see in the very beginning before he had his big hit, you know, maybe they're really not worth that much. Right. Market capitalization is about $100,000. But after his big hit, so let's say he did, you know, say he said, hey, give me $100,000 to invest in marketing, you know, this song Old Town Road. And, um, well, you know, if you do that, then I'll give you access to a private Discord server, maybe a 10-minute FaceTime and backstage passes. And so, uh, maybe they all get a, you know, kind of a 20% share of streaming royalties, right? So it's a really good deal. And so then he blows up. So in 2020, he blows up. So then now the price goes from $100 per token to $1,000. And now the market capitalization is now, you know, a million, right? And then maybe afterwards, you know, it goes even higher. And it goes to $10,000 and then the market capitalization is $10 million. So this is an example of what a personal token might look like or a brand token might look like. And so, you know, that's another example. Now, here's an example of a community token right here. So this is a SWAG. OK, so SWAG is a multifaceted social token focused on the SWAG community. Carlos Gomez, the founder of SWAG, stated with, with SWAG, the goal has always been to cultivate and expand that passion. They're this weird intersection between crypto, culture, community, and collaborative creativity. A lot of C's. So here's what they do. If you get, if you get a swag token, you get access to a swag drop. So it could be like merch drop, you know, grants for community-initiated projects, access to special creations they might have. So, for example, NFTs, you know, community tokens. Right. So again, maybe it's special events or maybe you have voting rights for these events. Right. Kind of governance tokens, right? Proposing and voting on SWAG community actions that actually ties in directly with governance tokens. Right. So you have a— you have more of a say. So soon holders at least 10,000 tokens are able to propose voting actions. So, you know, there's a lot more. If you own a token, you're incentivized to kind of do well for the token, talk about the token as well because you want it to go up in value, but also because you want to participate. And there's an element of status as well that goes into this. Right. So what does this mean? What does this imply for marketers or marketing in general? Tokens or, you know, tokens, social tokens in general are going to be an element that I believe will be included as we move into this kind of decentralized world. Right. And so, you know, you can have big companies like Coca-Cola, which, you know, from a legality standpoint, might be harder to launch these tokens because they might get in. There's just a lot more red tape around these. But look, if you launch a token, you're basically going to get a lot of brand ambassadors, right? And you're going to get an army of people supporting you and you're building this kind of ecosystem inside. You're built— I mean, you're building a freaking currency, right? And if your brand becomes more valuable, then the currency becomes more valuable and you can get more people that they want to participate in the upside and maybe they want to sell the tokens later for kind of maybe for their own personal use. But incentives are much more aligned now because now people can participate in your upside. And they can also— they're much more incentivized to, to, uh, to help market you and speak highly of you. And you're incentivized to do a good job for them because you want to make sure that the community stays vibrant. And your reputation is at risk if you kind of decide to make this a money grab. And, um, that's just ultimately not a good long-term play. And so what this does is it forces not only the creator to think long-term, but it forces the community to think long-term as well. And Charlie Munger likes to say, show me an incentive and I'll show you the outcome. And I think social tokens are a great way to get started with that. So let me know what you think in the comments below. Do you think I'm full of baloney or do you think this is a good— this is going to be a big piece of marketing in the future? I certainly do. Don't forget to hit the subscribe and the bell button and don't forget to hit the like button as well because it helps us grow. All right. So that is it for today. Don't forget to check out the other bits of content over there and we'll catch you later.
