Social tokens are the next new thing to come onto the digital scene. They too, are a type of art. But there is one main difference. Social tokens are fungible. NFTs are not.
So what does “fungible” mean? If something is fungible, it can traded for another asset like it. For example, trading a car for a car. NFTs are “non-fungible”, meaning they are unique and there is nothing else like them that can be used for trade.
Each can be an investment, just not the same type.
Macro expert Raoul Pal says he’s diving into investments that he describes as “utter insanity” because they are part of the next big trend.
Writing in a new blog post, the former Goldman Sachs executive says that he’s dipped his toes into the non-fungible token (NFT) market with his purchase of a Bored Ape.
According to Pal, NFTs like the Bored Ape Yacht Club (BAYC) collection are the beginning of a new trend of social tokens, or crypto assets representing shares in communities.
“My view is that the future lies in social tokens and that was the way forward. You start with NFT communities (the Thousand True Fans model) and then built out a social graph. I had heard about the potential social token around BAYC so that got me focussed, outside of the glamour of the news flow.”
The Real Vision CEO says that he thinks social tokens will be eventually integrated into many different facets of society and economies. Pal also says that Bitcoin (BTC) could also be boiled down as a social token, just with a different community and different features.
“I BELIEVE in social tokens as Universal Basic Equity and the future of culture and community, municipalities and charities, of business models and economies. After all, BTC is just a social token with unique attributes and all of these social tokens work for the various models of digital sovereign states, which is where I think we are headed…
I don’t think social tokens are get-rich-quick schemes but get rich slowly IF the community builds utility that has long-lasting value. Build utility, a vibrant, growing community and some quantifiable scarcity and you WILL build value over time, and everyone can participate – either via investment in the utility token (as deferred future utility) or by adding value to the community and being rewarded in tokens. The brand or creator is on an equal footing. All incentives are aligned.”
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