TOKEN-GATED COMMUNITIES - WHAT IS IT ABOUT?
Will token-gated communities become a big deal in the future?
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🥞 PANCAKES WITH CHOCOLATE CHIPS: Everything about token-gated communities
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TOKEN-GATED COMMUNITIES: WHAT IS IT AND WHY IT'S IMPORTANT?
“Token-gating” - what is it about?
Token-gating is becoming a popular new way to restrict/control access to exclusive content, monetizing it by using NFTs and/or other tokens. So, if we’re talking about community, a specific token becomes just like an access key to it.
For better understanding, imagine any situation in your life, where you had to pay a certain amount of money to access any content. So that’s what token-gating is, you just pay with a specific token. And, as an access key, the token allows you to enter a community and proves that you belong here. That is the key difference between traditional payment for entering any content and token-gating.
And why is it important, then?
Because traditional communities are full of spam and random users/members. That doesn’t add any value or trust in such a community.
On the contrary, the token-gated community is “made of” members, who truly care about the value and product that the community creates.
What are the benefits of a token-gated community?
Actually, being in a token-gated community is beneficial for both creator and consumer.
So, benefits for creators:
Creators have control to decide who can access their products;
Creators can generate income from secondary sales;
Creators align incentives with customers.
Benefits for consumers:
Doesn’t have to pay repetitive fees (e.g. subscription fee);
Consumers own the asset that the community creates (in other words, token-gating turns product from consumable to commodity), and can sell it later → make profits.
How does the token-gated community work?
It’s quite simple, actually. The creator of the community creates the rules, and the consumer has to own this specific token in his / hers crypto wallet; it helps to verify that the person actually belongs to this community because the token is linked to a specific smart contract (which is an unchangeable agreement between the creator and consumer, written on the blockchain for good).
Few examples of token-gated communities that I like:
Developer DAO - it educates about WEB3 building;
Water & music - builds a guide to the music business;
LinksDAO - a community for golf fans;
PROOF - community for NFT collectors and artists;
The Krause house - for basketball (and NBA) fanatics.
Few examples of tools for token-gated communities that I like:
Collab.land - specific gate access to Discord and Telegram;
MintGate - builder for NFTs and token-gated content;
Rally - Platform for creators and communities to build their digital economies;
Bildr - Web3 tools, templates, and building blocks;
Discourse - Open-source forum software.
What are the risks of token-gated communities?
In the future, it’s possible that some people will face the struggle with financial accessibility. Meaning, tokens might grow in value, so it will be harder to buy them.
Also, since token-gated communities are just in the infancy stage, it could face some technical issues while developing.
What are the opportunities/predictions of token-gated communities?
Token-gated communities will create and curate content together;
Token-gated communities will collect and invest together;
In the Metaverse, there will be token-gated spaces;
Token-gated operating systems will appear;
Token-gated communities will create various options for their consumers, for example - voting.
Of course, these are just speculations. Time will show if this actually happens, right?
Owl’s takeaway: even though accessing content by paying money is not a new thing, token-gated communities are creating a different type of value. It is favorable for both creator and consumer, and it builds more trust. Why? Because members actually care enough to invest in the product or service they truly believe in - otherwise, they wouldn’t buy specific tokens and wouldn’t join the community. So for me, a token-gated community seems like a really great way to communicate with people that genuinely believe in your project/product. Even this newsletter could be a great token-gated community in the future. What do you think about such an idea?
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Disclaimer: This newsletter is strictly educational. None of this information is intended to be financial advice. Always do your own research and act responsibly with your profits.