What is a Social Token?
It’s the currency of the NFT communities.
If you are in an NFT community, you’ve likely come across a social token and wondered how people can give you crypto for free. You probably received that token for free by engaging with the community in some way (attending a live steam or being active in chat). It’s one of the more revolutionary ideas coming out of crypto because it helps you earn money from actions you take on the internet. The actions you can earn money from are the same actions you would take on other websites and apps for free!
For example, if you went to a news website and read an article you could earn a token. If you have ever commented in a Facebook group, you could earn a token. These social tokens actually equate to real money because of how they are set up.
Check out the current top social tokens here.
How Creators Set up Their Social Tokens
The creator of the token will have a community of some sort like a blog, a Discord Server or even Twitter followers. They will then create an ERC-20 cryptocurrency, which is exchangeable for ETH. ETH is exchangeable for cash. When they set up their token, the ERC-20 cryptocurrency, they say how many tokens will be available to the community. Each token that is given out or bought will have a higher value than the one before it. So as more tokens are given out to the community, the more valuable the token becomes.
How You Can Earn From Social Tokens
There are a few ways you can earn from this concept:
- Performing an action in the community where they give you a token and immediately exchange that token for ETH and then cash.
- Hold on to your token you have earned so the value goes up as more tokens are given out. Then, exchange that token for ETH and then cash.
- Some of the Social Tokens will give you access for things to buy with it, so you can essentially get different things for free.
- You can buy a token at a price you think is lower than the growth of the community. For example, you find a community that has content that you love and you think other people will like that content too, you can buy into the token early. As the community grows and earns more tokens, the value of the token you bought early grows.
If you’ve received a tip of a social token in Discord, follow these instructions to move your tip to a wallet, where you can exchange for cash.
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