Why Simple Token will be the Stripe of Branded Currency

In the early days of banking, banks printed their own bank notes. In the mid-1800s, there were thousands of different types of money in the U.S.

Similarly, we are moving to a world in which companies, brands and apps will have their own currencies. These branded currencies won’t just be to make purchases. Instead, they will confer rewards, incentives, and status and to help their customers interact with each other in meaningful ways.

It’s only a matter of time until Starbucks issues StarBucks.

A few years ago, I wrote about about the future of branded currencies and the opportunity for companies to create gift economies around social currencies.

Today, the evolution of blockchain, cryptocurrencies and asset-backed tokens makes this vision possible in a whole new way.

Just as the Internet enabled companies to turn audiences into communities, blockchain will enable companies to turn communities into economies.

Last month I came across the work of a company called Simple Token.

The founders were running an online community called Pepo in which members share travel tips. The Pepo team wanted to create incentives and rewards for people to like, post and share their stories.

Many apps like Pepo have gamification systems in which points are given out for contributions to the community. But these are quite simple and can’t be cashed in for anything outside the app.

The Pepo team found themselves caught in the paradox of a gift economy. Members want to be rewarded for their contributions, but didn’t want money to detract from the sense of community.

The team realized that an asset-backed token could solve this problem. By creating PepoCoin on the blockchain, simple points could become smart contracts. As a branded token, PepoCoin would maintain the sense of community. Meanwhile, connecting PepoCoin to Ethereum would mean that users could monetize their contributions.

Branded tokens would enable the community to move back and forth between the gift and market economies without compromising the reciprocity of the community (which happens when you pay people directly for user-generated content) or exploiting the work of its members (like many of the big social platforms).

The problem is that initial coin offerings are complex and expensive. The Pepo team wanted to focus its energy on the community, not on creating and managing a currency.

It’s similar to what many e-commerce companies faced before Stripe. They didn’t want to have to build a whole payments system. They just wanted to take the payments and focus on their business.

That’s when the Pepo team had their epiphany. If they had this problem, many others would to. Instead of building a branded token just for Pepo, they would build a platform for any company to create a branded token, and use Pepo as the first test case.

In effect, they would become the Stripe for branded currency — a simple way for companies, apps and brands to create new forms of engagement and new business models based on reciprocity, exchange, and reward.

Fast forward, and Simple Token has reached its first milestone of

• being able to issue branded tokens and
• manage the exchange of those tokens inside the Pepo app.

https://www.youtube.com/watch?v=-SxJ8c1Xh_A&t=330s

Other partners looking to create branded tokens are signing on. They fully subscribed their pre-sale. And the public sale of tokens starting November 14 is getting a lot of well deserved attention.

I am honored to be working with the Simple Token team as a member of their advisory board and to begin incorporating the Simple Token platform into my work helping companies design their own microeconomies.

P.S. For more on branded currency, read my Medium article about Starbucks and the future of loyalty programs here.

P.S.S. Wouldn’t it be nice if the Claps on Medium did more than just make authors feel good and push their articles to the front page?

Medium has thankfully avoided advertising, but the paywall is imperfect at best. Branded tokens have the potential to transform Claps from gestures of appreciation to real currencies in a microeconomy.

I’d love to see Medium build out Medium Claps on Simple Token. But in the meantime, just go ahead and Clap below.