Since ICOs, we've created thousands of tokens with different economic models and incentives for communities to use them. DeFi tokens enabled money legos, NFTs enabled media ownership, social tokens enabled creator economies, memecoins enabled headless brands, L3, and prediction markets (a mix of economic and community creativity), and now, we have channel tokens that will shape how communities monetize.

Monetizing through tokens

As Farcaster channels become decentralized, owners can enable different use cases and economies for community participation.

Hypersub introduced subscription tokens for channels a month ago, and many channel owners have since implemented them as a new monetization strategy. As Jonny shared, in the first two weeks alone, these tokens generated $14k in revenue across nine channels.

Jonny Mack on Warpcast

there are now 9 channels using @hypersub for recurring revenue and community engagement in the past 2 weeks: - 828 total paying subscribers - 3.9 ETH total channel revenue (~$14,400) - 1.05 ETH total subscriber earnings (~$3,900) big things have small beginnings✨

Farcaster

Different types of tokens are being created: memecoins like DEGEN, TN100X, and HIGHER were airdropped to participants based on their contributions in different channels, owning specific NFTs, or being active on Farcaster. Subscription tokens introduced by Hypersub, and now a new wave of tokens is being created on Farterminal, with 47 channels already creating their own tokens in the past four days.

Carlos on Warpcast

Introducing far_terminal - a brand new way to launch channel tokens. create faster. engage faster. enjoy faster. onchain today ~~ https://www.farterminal.io/

Farcaster

Beyond speculation

All these token models are great as they can add an economic layer to each channel, but so far, there's a lot of focus on speculation. Tokens should be seen as a product, not the main attraction. Therefore, we need to build models beyond merely buying a token and hoping for a profitable exit.

Consumer crypto is mainly seen as a casino game, targeting crypto-native users who play for profit. If channels are to become the next digital brands, we need to focus less on the casino aspect and more on how a token gains value through member contributions.

What makes a brand great is its community. We don't want communities filled mainly with speculators but with members who believe in the initial vision. If tokens are meant to be used for community access, monetization, and creative expression, the focus should be on quality members rather than quantity. It doesn’t matter if you have 20k members if discussions revolve solely around shilling a token and its prices.

Distribution based on participation

I believe channels will be the next significant evolution in community engagement, enabling brand protocols where everyone can contribute to a shared vision. Channel tokens should emphasize contributors over buyers. To achieve this, we can:

• Distribute the token to a few early contributors and support initiatives within the community.

• Design a points system for participation or mechanisms that make members feel part of something they believe in.

• Allow members to claim tokens later based on their value-added contributions.

Channel success depends on quality, not member count. We’re still experimenting with how tokens can shape communities, and perhaps this time, focusing on meaningful and continuous distribution is the right approach.

Channel economic layers

New economic layers can be built on top of each channel. From a few members with a shared idea to monetize a brand. Channel Legos enables:

• Communities to introduce tiered contributions based on social scores, allowing members to post, curate, or moderate the channel.

• Communities to build a social leaderboard for all members.

• Communities to differentiate members by subscriber status, NFT holdings, token amounts, and onchain activities.

• Communities to have their own multisig channel wallet.

• Communities to reward contributions directly within the channel using models like rounds.wtf.

• Communities to monetize content shared on the channel with their own token.

• Communities to monetize through ads chosen by members.

• Communities to introduce public read and gated write capabilities.

Communities might no longer need to think about building their own clients anymore. Those are the "DAOs" we were waiting for.

Conclusion

Tokens can shape community engagement, brand monetization, and value transfer. Channels can adopt various token models; subscription tokens for access and tokens earned through contributions. These tokens can be used for content creation, voting on proposals, tipping members, earning tokens by referring new active members, etc.

By focusing on quality over quantity, we can unlock meaningful contributions and distribute the tokens to users who care about the channel and actively participate.