Unbundling social token economics, governance, and access

So, what types of tokens should be used for which community purposes? As with most things in life, the answer is: it’s complicated! Each DAO needs to evaluate what type of community they are trying to build and determine the right combination of assets for economics, governance, and membership. But, generally speaking, we think it makes more sense ... See more

So, what types of tokens should be used for which community purposes? As with most things in life, the answer is: it’s complicated! Each DAO needs to evaluate what type of community they are trying to build and determine the right combination of assets for economics, governance, and membership. But, generally speaking, we think it makes more sense ... See more

Whether fungible or non-fungible, social tokens in DAOs usually represent three different but overlapping roles:

-Membership & access

Governance rights face similar challenges with both fungible and non-fungible tokens: ownership naturally tends to have a power-law distribution so the question becomes: what do you do about whales? This recent essay by Vitalik paints a clear picture for why this will become an increasingly problematic issue for DAOs, both in terms of incentive mis... See more

Economic valueGovernance rightsMembership & access

Membership & access can be managed with fungible and non-fungible assets, or any combination of them. Ultimately though, access becomes increasingly non-fungible or loses meaning.

Should all three of these roles be represented by a single token? Which of them are a better match for fungible and non-fungible tokens?

If you look at the social DAO landscape, you’ll see communities with different social token models. Some, like FWB, use a fungible social token to gate community access. Many emerging PFP-based communities like BAYC use NFTs as the primary community gating mechanism. Whether fungible or non-fungible, social tokens in DAOs usually represent three di... See more