Money is a social tool to achieve cooperation among a group of people. Through history, the form of money has evolved from collectibles to coinage to currency issued by fiat. Money often reflects the values or politics of the communities that issue and use them.
We refer to social money as money that is used within a community for social purposes, such as creating exchangeable value where none existed before or creating a market for social experiences that otherwise would be impossible or have a high social cost. This is in contrast to other forms of money such as fiat currency used to pay taxes and for everyday commerce in a country or decentralized money like Bitcoin used as censorship resistant store of value.
The digital culture fueled by the rise of communities that live on the internet has reached a tipping point where people identify and align closely with their digital cultures, even more than national or religious identities. These “digital nations” have their own unique shared culture in the form of memes, gifs, inside jokes, communication channels, and shared hopes and fears. What these digital nations have is a shared social language and a shared social culture, but what they lack is shared social money.
Characteristics of Social Money
What would such social money look like? What would some of its most defining characteristics be?
Owned by the Community
It is crucial that any social money built by communities is owned by the community as a whole instead of centralized entities far removed from that community. The original distributed vision for the world wide web has instead been dominated by ad-driven business models of companies valued in aggregate at trillions of dollars, without the people on these networks seeing much of the value. The push towards a decentralized web is unmistakable, even coming from the creator of the world wide web. Communities should not grant arbitrary power to corporations when it comes to managing their social money.
Cater to a Global Audience
A defining characteristic of the digital world today is it is truly global. Any social money that a community adopts needs to be global as well. As people establish a shared social language and a shared social culture where geographic boundaries become less important, they would benefit from a shared social money as well. And this social money should be just as seamless to send; as easy as sending an email.
Defined Monetary Policy
It is essential for social money to have a defined monetary policy that cannot be arbitrarily changed. Mismanaging monetary policy is really easy to do, given the power, and most online communities don’t have a central banker in their midst. Once the monetary policy is defined, people know exactly what they’re getting into, and can plan for the future.
Ability to Store Social Value
Like any good money, social money should be able to store social value for the intermediate to long-term. This allows people to delay gratification and still keep the value intact. It lets people think over the long-term as opposed to immediate fulfillment of their needs, which builds long-term trust and community.
Any new money faces the challenge of effective distribution, and social money is no exception. Any community that adopts social money should look for an effective and fair distribution. What “fair” entails in this context can differ from one community to another, and there may never be a perfect way to do it, but fair distribution is an ideal that the community should strive for.
Concrete Uses in the Social Context
Social money should have concrete use cases within the social context of the community — otherwise, it would be less friction to just use regular money or Bitcoin instead. These uses usually explore ways to transact when there was no such market before, creating value for both parties of a transaction, or giving opportunities for transaction that traditionally have had a high social cost in conventional money.
Building Social Money Infrastructure at Roll
At Roll, we’re building social money infrastructure on the Ethereum blockchain. We’re specifically targeting online creators with global fanbases who are already used to social behaviors that engage and reward their fans. Each creator generates their own branded social money, which we call a ‘fancoin’ directly on the Ethereum blockchain.
Issuing a fancoin on the Ethereum blockchain allows us to develop social money in a way that is controlled by the creators (and subsequently their communities) and not us as a corporation. Roll provides tools to make the process of issuing, distributing, spending, and holding fancoins easier, but in no way are creators and their fans locked into our ecosystem. In addition, by being issued on the blockchain, fancoins are global by nature. Finally, any promises, such as a deterministic monetary supply, can be coded into the smart contract itself for anyone to audit.
Defining the Economics of Fancoins
Roll uses smart contracts to define the monetary policy of each fancoin issued on the network. We’re launching with a standardized issuance and monetary policy across the Roll network for all creators on the platform.
Roll uses a fixed supply of 10 million units for each fancoin, with a vesting schedule of 200,000 units that accrue to the creator each month over 3 years. Creators are initially allocated 2 million units for the exclusive purpose of distributing them within their community.
A fixed cap on the number of units of each fancoin issued allows the fans who hold them to immediately understand what percentage of the total social value encapsulated by that fancoin they are holding, and make the decision on whether to spend it now or in the future. Vesting allows the creator’s incentives to be aligned with those of the community over the long-term, especially until the currency is sufficiently distributed within the community.
Tools for Distribution and Use
Roll makes it easy for creators to issue and distribute their fancoins, and for fans to spend the fancoins they receive for social experiences with the creators. Roll provides custodial Ethereum wallets capable of sending and receiving these fancoins from the Ethereum blockchain and within the Roll network. Users are free to withdraw them to their personal wallets.
People inherently understand that social interactions have value. Anyone with an online following understands the nebulous “social currency” they have with their followers. Roll can unlock the value of a creator’s social interactions and share that value with their fans and followers as simple as sending a message. The next generation of platforms will natively integrate fancoins to succeed, because the power is now in the hands of online creators, not just platforms.
Roll will use social money in the context of these online communities centered around a creator, to unlock the value of these social interactions.