Community Tokens, their Role in Governance and Utility in Platforms
Community tokens have commonly been used to reward early members of popular decentralized projects and communities. When the same tokens are offered to the public at a price, this simultaneously makes them valuable for token holders. Markets decide henceforth how valuable or not the tokens become, depending on the projects undertaken and the value created by the said community.
Governance tokens hold voting power as to the future direction taken by the community organization. As such, depending on the number of tokens held, each user can cast votes of varying gravity to contribute to a community matter. This way, holding governance tokens could be a powerful way to get your voice heard in a decentralized community.
The best part about decentralized platforms is that the community ultimately decides what projects are perceived to create the most value for everyone. Unlike read-write Web 2 platforms where only a few shareholders benefit from the value accrued, community tokens now allow for this value to accrue to every decentralized token holder equally. Every community member is therefore incentivized to provide the most value to the community so that overall value grows.
What are some benefits to holding Community Tokens?
Community tokens can be used to offer holders subtle perks such as early product releases or exclusive access. This provides efficient channels for early product testing and a chance to carve out spaces for the project’s most enthusiastic fans.
Governance tokens are effective ways to determine the direction of DAOs and other decentralized platforms; better than a board of 10 who determine policy directions.
Community tokens give customer-facing brands direct access to their most loyal fans without needing to go through middlemen like agents or centralized social media platforms. This way, these brands, and individuals can figure out ways to deepen these existing relationships further.
Community tokens can be incredible stores in value for holders who believe in the community vision. Depending on which projects the community votes to work on, community tokens can accrue value differently depending on the scenario.
Community tokens provide the holders to contribute the most value to the decentralized platform. Besides, knowing that token value grows with the number of holders automatically turns every holder into an evangelist. Free marketing for the tokens.
To wrap this up, the community tokens space is projected to turn out even bigger than DeFi. In the not too distant future, every organization might run as a DAO, with community tokens fueling the growth. Exchanges are also very unlikely to turn down from listing a token that provides real value and that has a growing list of token evangelists backing it.
Community tokens will also change customer-brand relationships in interesting ways, especially for consumer-facing brands, corporations, and personalities. On the broader scale, community tokens are effective ways for users to earn and hold direct value for their contributions into the decentralized platform of their choice.