The Succession Of Your Social Money Is Bound To Your Tokenomics Model
So, you got your own $fancy Social Money to roll with your digital community. Sure, Roll‘s issuance model will pretty much subject all SMs under the same umbrella (fixed supply, rate of release etc.), and that brings us to the question: why isn’t your Social Money as successful as your friend’s, or your rival’s SM?
If you’re not sure what Social Money is, don’t panic. Relax, and take a moment to read our previous article on the matter before scrolling further.
Most of you would think that it’s a matter of networking. Maybe your rivals got like 10k followers on Twitter, so the activity involved with their particular SM might be higher than yours, having barely 100 followers on the same platform.
The truth is that might play an insignificant role, but it is not the determining aspect of your own SM’s success.
To understand how successful SM works we must dive into the concept of tokenomics, or token economics, or simply algebraic math.
The modeling strategy of a medium of exchange
Let’s say you have a digital product or service you’re offering to your network through your SM model.
Is your SM used just for that particular product or could your followers have a broader list to choose from when considering spending their stacked $fancy?
Is the analogy between your product’s price in terms of $fancy, and the rate of $fancy released to your community mature enough?
For example, if you offer an NFT for 10,000 $fancy, but you give your network only one chance to get 100 $fancy from one single event, how you’d expect them to get that NFT?
Then you should analogize whether your distribution model is well-organized, meaning that it incentivizes your community to participate in various events, under various circumstances, and in various times of the day, week, month etc.
So, if you have listed an NFT for 10,000 $fancy, you should think of who would be eligible to eventually purchase it and under what terms. Is it only super-committed fans that would get into every single event you throw just to lick every tiny drop of $fancy spilled, over the course of time may be finally able to purchase that NFT which might be by that time irrelevant or simply not so ‘fancy’ anymore?
Organizing your Social Money in the following sense:
It should be obvious by now, that I am selling an NFT for 10,000 $fancy. >.< How long would it typically take for someone to gather that amount of $fancy?
Would I create daily events where I give 500 $fancy, eventually giving the chance to a fan who’s been committed for 20 days to purchase the NFT?
Would I choose to spoil 5k $fancy in weekly events that some of my not fully-committed users, but still occasional followers could join 4 times/month and get a chance for their favorite NFT?
Eventually creating a well-thought tokenomics model is the only way to the succession of your Social Money and it is all up to you and the quality of the services you’re offering through your SM.
If you barely create events and you expect your followers to somehow magically earn $fancy, you’re obviously deluded.
On the other hand, if you give away 100 $fancy per month for a prize that requires 10k $fancy, then chances are your followers won’t be even interested to begin with the interaction.
Same goes for if you never do events and suddenly drop an event that gives 100,000 $fancy to one ‘lucky’ winner who would practically buy your one NFT off the market and then will be left with 90k $fancy no one needs as there are no other products you could redeem with $fancy.
Over the past week, I’ve been following the Social Money-oriented NFT scene intensively and I can say that I’ve found barely a couple of projects with serious tokenomics strategies behind the scenes. The rest are excited crypto-folks who find this concept as a ‘free and easy way to create your own crypto’ but are not really willing to spend some time figuring out what their SM is meant for and how exactly it’s gonna work for their respective communities.
Finally, something equally if not more important than your tokenomics model, would again be the quality of the products and/or services you offer. Sometimes a good product might force people to work hard for that ‘daily-login’ or ‘repost’ scenario, while in other cases a mediocre product that won’t inspire many wallets into owning it, could be left in the shelf even if it costs 100 $fancy.
I really suggest following Connie Digital (danky.art) on Twitter, and monitor how he rolls with his own Social Money (HUE) to get a basic feeling of what a good tokenomics model is based on.
Please feel free to comment on your favorite SM use-cases/strategic models in the section below, as I really wanna learn more about this intriguing field of digital assets.