Tokens are the new websites

Tokens, both fungible and non, are like websites: digital primitives that can represent almost anything. Not just money or art, but code, game items, access, whatever people dream up in the future — the atomic unit around which a new era of the internet is organized.

We’ve seen the NFT craze. When people figure out the fan tokens’ potential, it’ll be the following commerce tool awaiting mass adoption. In India, Bollycoin just launched three days ago, and more than 3 million tokens were bought within 24hours.

Although it can be argued that it was marketed as (ERC721 tokens), but on the site, there is a verified contract which is a "Coin" (ERC20 token). People bought it even though the primary utility is to buy an NFT.

So, What are Fan tokens?

Fan tokens are similar to NFT's. NFT is registered in a blockchain by creating a single token that can ever exist. Fan tokens can be minted by increasing the supply from 1 to 1 million / billion / trillion allowing more people to exchange with more liquidity.

But how can fan tokens help, and what does it mean for the fans?

Fans are incredibly passionate about the people, brands that they support — They invest a lot of time, money, and energy into following. Despite this, interactions and connections are limited. Fan tokens are set to change this and enable new monetization opportunities.

Currently, to support and engage your favorite influencer, you might purchase a Youtube subscription which 30% goes to youtube, where you get access to few fancy emojis, maybe a few private streams, and maybe connect with them via zoom call if you take the highest subscription. If you want to support a brand, say a sports/esports team, you buy merchandise or donate to the brand.

This is just a one-way transaction, and essential Fan tokens help people turn purchases into assets that are more liquid and exchangeable. (NFT’s are illiquid assets)

Fan tokens progress as a commerce tool

Fan tokens first started creating a buzz last year (2020) in June, when FC Barcelona jumped on the bandwagon with the launch of their fan tokens.

The tokens were sold out in a couple of hours, earning a whopping $1.3 million. Taking inspiration from this success story, many other football teams followed suit. This has helped muster a new wave of fan support, providing sports clubs with additional revenue streams.

The hype over fan tokens was boosted as PSG released a new fan token in 2021 as a part of Messi's "welcome package." But there's a lot more to it than just that.

Currently, fan tokens can be purchased through Socios and Bitclout.

In socios, you'd have to partner with the platform to get your token listed. And they expect you to have a particular influence to be listed. Hence, a democratized tool doesn't exist for anyone to create a fan token.

You could also tokenize yourself and launch your fan token via bitclout. But bitclout token metrics customization is limited, plus the project has a shady start (Just my opinion); check out the two tweets below and make your own opinion.

We at Higin are looking to build a product feature that enables anyone to launch their token and participate in the future of commerce in three steps.

Step 1 — Token design: Give a name, ticker from which people can find your token and upload a token logo.

Step 2 — Token Metrics: Mint a fixed cap supply token like Bitcoin or mint a reissuable supply as and when you get traction. Mention the decimals — Several times the token can be divisible.

We are also enabling Founding rewards when someone's purchases your fan token. A percentage of that gets allocated to you as a founding reward. Settings this value too high will deter buyers from ever purchasing your token, as there will also be a transaction fee from the Decentralised/Centralised exchanges from which your fans can get tokens.

Follow the best practices while listing your token,

A token with a fixed number, fewer decimals, and fewer founding rewards will be rated as a SAFE buy to your community.

Similarly, a token with an unlimited number, higher decimals, and higher founding rewards will be rated as a RISKY buy to your community.

Step 3 — Compliance and generate: Go through the compliance agreements and mint your token( A sample compliance has been listed in the below image with more to be added). A gas fee and transaction fee in the Higin platform may be applicable.

So now that you have your fan token, What can you do?

They are unlimited possibilities of what you can do. Here are few examples:

1. You could provide exclusive NFT's that can be purchased using your fan token, or you could even make NFT's in Higin's NFT marketplace only accessible to the highest token holders.
2. You could provide exclusive perks like merchandise and private content if you're an influencer or a brand; you could provide exclusive merch to the token holders and make your token the medium of payment.
3. You could help fans govern your day-to-day decisions, and if you're a streamer, people can vote through fan tokens for your stream time, designs decisions for your channel. / If you're a brand, designs for brand merchandise, locations/timings of the matches.

Here is an example from one of our esports IPs, A CODM streamer invitational that we organized earlier this year, where we asked people to vote for streamers by simply signing up,

We got around 33k visits from just two days without paying anything to google/FB ads by just using the streamer's influence. ( Total 2.5M+ reach across all socials, Check out the complete report here)

Fan tokens will open new innovative engagement tools, and we at Higin are aiming to democratize these tools, similar to how WordPress democratized launching a website in the previous decade. Looking forward, I think fan tokens will be the "website," a must-have for brands and influencers to maintain and grow a personal brand.

If you're interested in knowing more about how fan tokens work, check out our whitepaper for more details.

If you are a game developer, esports player, or streamer and would like to partner or connect with us, please DM us @metahigin or join our discord. We would love to connect with as many as possible and learn how to make better products that make a living from gaming a viable career option, thus improving financial inclusion and wealth distribution.

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Sitaram Kakarlamudi
sitaram@higin.in