Social tokens are on the rise, but what are they and how can they fit into an advanced investment strategy?
The Key Functions and Features of Social Tokens
With the growing popularity and proliferance of social tokens, the digital asset landscape continues to evolve. This specific type of asset allows creators and brands to connect on a deeper level with fans and investors, while also monetizing their influence.
Put simply, a social token is a format of digital ownership, underpinned by blockchain technology.
Experiences, services, access to the provider and even a share of revenue stream are all elements that may be on offer as part of a token. An investor who owns a token can then resell it in the future.
How Social Tokens Can Fit into an Advanced Investment Strategy
The unique characteristics of social tokens and their potential for growth mean they are emerging fast as a new asset class within advanced investment strategies.
Diversification is a fundamental of strategy, and the opportunity offered by social tokens to diversify beyond the “traditional” digital assets and cryptocurrencies is growing in appeal for investors.
The community-driven value is another element that makes social tokens stand out, and also distances them somewhat from the broader digital asset market movements.
And the potential for returns as demand increases with the expansion in reach and popularity of a creator or brand also make social tokens an appealing option to some.
The descriptions provided above are all based on publicly available information, and as such cannot be considered as financial advice or encouragement to invest. Sources of information used in this post include Investopedia and CoinMarketCap. All transactions involving digital assets involve certain risks, which you should familiarize yourself with prior to any investment.