Digital assets known as NFTs (Non-Fungible Tokens) are non-transferable. A unique object is not difficult to make but making it genuinely one-of-a-kind is another matter completely. A common flaw of NFTs is their ease of duplication. Authenticity cannot be independently verified. The fungible tokens will be explained in this article.
What Exactly is a Wen Token?
Every Discord server has its own unique version of it. When will a token be distributed to the members of the community by a certain project? In the case of a $2 billion NFT project like Bored Ape Yacht Club, this topic becomes much more pressing.
When a non-fungible token collection is launched, it’s exciting to watch a community form around it. It’s tough to keep track of everyone’s cats, particularly if they’re all quite wealthy. A means to bring them together and harmonize their interests would be ideal. Why not do everything on-chain? Maybe with the aid of a cryptographic token?
This is why NFTs have a fungible future. Managing a community only via the use of unique tokens is proving difficult for the several NFT communities that have sprung up in the last year. In principle, community-created fungible tokens become quite appealing. It’s a comfort for them that there’s the social token world, which consists of a variety of streams of tokens centred on a certain community.
The Argument Of Non-Fungibility
It’s been a long time since we’ve seen any new information on social tokens here. Jeff Wilser has put together a fascinating look at the genre in this interview. As a brief recap, this is how they’re meant to work: Spotify’s algorithm can recommend a potential new artist to you if you’re looking for new music. You’ve listened to their music tens of thousands of times, and you’ve started attending their live performances and purchasing merchandise. Eventually, the musician becomes well-known and begins winning Grammys and making appearances on shows like “Saturday Night Live” and “SNL.”
A social token’s “Taylor Swift Hypothesis,” as it’s been dubbed, may be applied here. In order to test the hypothesis, consider adding a token to the previous situation. That artist might be Taylor Swift, and what if she released $SWIFT in the first days of your adoration. You may have amassed a sizable amount of $SWIFT, watching Taylor Swift’s fame increase in fiat money terms. A new Atlantic piece by Index Ventures investor Rex Woodbury discusses the Swift Hypothesis.
Let’s take a closer look at why some NFT proponents feel fungible tokens for groups are a failure. As GMoney, the cartoonish half-monkey/half-man collector of NFTs puts it: Fans get tokens from a creator who has a supply of tokens. The value of the tokens increases as the producer produces more valuable work. However, in order to achieve these advantages, the creator must keep selling tokens to their supporters on a regular basis. This results in a dwindling supply of tokens for the creators, which discourages them from increasing the value of their work.
Rebuttal To The Social Tokens
Let me just say right now that I have a personal stake in the success of social tokens. The Rally platform enables esports broadcasters, singers, and producers of all kinds to issue their own tokens to their audience. I’m an advisor. Additionally, Seed Club, an accelerator for social token businesses, is where I’m a contributor and investor.
Unfair incentives are a serious accusation in the crypto world, and it’s easy to see why. To that end, I went to Seed Club founder and social token innovator Jess Sloss for a stinging retort to GMoney’s monkey business.
Sloss informs me that “social tokens are superior equity.” You, the reader, should know what he truly meant by that before your phone the SEC hotline for unregistered securities offers. NFT tokens, on the other hand, are less expressive than fungible tokens for a community. While NFTs are effective at generating cash and forming new communities, they are less adept at maintaining existing ones. Tokens of social standing come into play here.
They have not given any thought to their long-term survival as a community. Sloss believes this. There must be a way for more nuanced cooperation throughout the governance stack to be rewarded.
Paying core members for development or editing labour, for example, may be necessary. It may be necessary to generate more funds without diminishing the quality of current creative efforts. It may also be necessary to allow users to cast their votes.
Sloss uses the startup analogy to explain it: The idea of a “fungible token” makes perfect sense when there is a community of admirers who want to build something greater and broader than the work of the artist.
“In essence, you have a bank account and a cap table to work with. In the context of the community, the fungible token symbolizes the cap table that can be used to pay individuals as well as to raise money for investment. If you’re minting fresh NFTs and giving them away, or if you’re holding bags of NFTs, you can’t perform any of those things with an NFT. There will be a time when you’ll become trapped.
This might be a look into the future of an NFT community that uses a new token as a means of communication and coordination. Another example is Sloss’s work on SquiggleDAO: For generative art and Chromie Squiggles, in particular, the $SQUIG token allows holders to vote on how the DAO’s resources, including $8 million in USDC it obtained via selling $SQUIG to significant investors, may be used.
This Is Fungible’s Joy
Is there anything else a social token may be used for? Sloss points out that I’ve made a mistake: The term of art presently is community tokens or community distributed autonomous organizations. At Seed Club, he claims he is witnessing an increase in the number of founders of Web 2 companies who are interested in investigating the possibility of distributing ownership of their businesses through a decentralized autonomous organization (DAO) (the third cohort had Pussy Riot and other notables). It’s becoming clear to them that they’re developing on a technology stack that will soon be obsolete and will have a hard time competing with a Web 3 version of their product,” he added. “The creation of DAOs is in a state of an explosion right now.”
According to Sloss, the most popular use cases for DAOs are those that help students learn about Web 3.0. A few of his more notable examples are “welcome to the gorgeous female metaverse,” the DAO Masters, and the Crypto-Culture-Society DAO. He’s particularly optimistic about a token given out by the industry periodical Water and Music, which encourages its readers to do research on the intersection of music and technology.