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Things have moved fast in 2020 as the DeFi boom has heralded in new and easier ways of launching tokens. The latest craze is the emergence of community or social tokens which have surged in popularity alongside non-fungible tokens (NFTs) in the third quarter.
A social or community token is one that is connected to an individual or group of people as opposed to a finance protocol or collectible. They differ from the slew of DeFi liquidity farming tokens that have appeared over the past few months and are built around an ‘ownership economy’ principle with the premise that a community will be more valuable tomorrow than today.
Creators, influencers, and celebrities can monetize their work as a non-fungible token (NFT), while supporters can give something back to show their loyalty.
Crypto research firm Messari has taken a deep dive into the burgeoning social token market which has surged to a combined fully diluted market capitalization of over $150 million.
“We’re currently in the early stages of this movement, but individuals are leading the charge with the top-five personal tokens accounting for nearly $200 million in fully diluted market value.”
WHALE Token Dominates
The research took a look into the most popular community tokens noting that WHALE, a social currency with a value underpinned by the world’s most valuable NFT collection, is the largest with a portfolio of $1.4 million.
The token was launched by an NFT collector called ‘Whale Shark.’ It now has 3,443 NFTs in the portfolio, with a $90 million fully diluted market capitalization reached at the end of September.
To foster growth, the WHALE community introduced NFT liquidity mining by partnering with artists to create unique collectibles that are added to the Whale Vault and can only be purchased using WHALE tokens.
Whale also operates a storefront on the peer-to-peer NFT marketplace OpenSea. Assets on the platform can be denominated in WHALE rather than USD or ETH.
NFT Market Milestones
In addition to community tokens, NFTs in general have made a massive impact on the crypto industry over the past three months.
The success of the Rarible liquidity mining incentive has been one example of how an NFT marketplace can generate wealth and volume by incentivizing DeFi farmers to buy crypto art and collectibles in order to earn RARI tokens.
Dapper Labs’ NBA Top Shot was also a resounding success, selling out all of its NBA Finals Moments cards and collectibles within hours of launching them earlier this week.
MEME is another success story that started out as a joke but has since become a legitimate project, utilizing liquidity mining by requiring users to stake their MEME tokens in exchange for earning unique NFTs.
The industry has a lot of room for growth, as DeFi expert Camila Russo explained in her latest Defiant newsletter. Russo added the fact that BlockTower has announced plans to invest $10 million into the NFT sector over the next six months.