Tokens, Symbols, and Schelling Points
February 15th, 2023

The next era of the internet is coming with small, niche communities using tokens for coordination and as symbols of belonging.

The internet, a labyrinth of possibility, has always been a breeding ground for connection and community. From the earliest days of forums and chat rooms (remember AOL?), to the 21st century's proliferation of social media platforms, the internet has served as a bastion for individuals seeking a sense of belonging and shared purpose.

It’s a melting pot of communities, formed around diverse interests and values. Here, the unlikely come together, bridging divides to find common ground. The digital realm, with its quirks and peculiarities, has become a vital hub for human connection and community-building, where the virtual and real seamlessly intersect.

In the nascent days of the internet, before the deluge of misinformation and propaganda, digital forums like MySpace and LiveJournal served as a sanctuary for like-minded individuals seeking connection and camaraderie. These early platforms offered a window into the lives of others, a way for people to find community and belonging, regardless of physical distance. The ability to experience the world through the eyes of others, without ever leaving the comfort of one's own home, was a paradigm-shifting revelation for the human mind and ideology.

But as the first chapter of the Internet made way for social media behemoths like Facebook and Twitter, the concept of "internet friends" and collaborative creation became mainstream. These platforms, with their vast reach and global user base empowered disparate online communities to form and grow in ways that were once unimaginable. The internet, once a lonely experience, transformed to a bustling metropolis of shared experiences and collective endeavors.

And, as the internet has matured, it has demonstrated a remarkable power to empower groups of individuals to coalesce–yet paradoxically it has simultaneously caused reality distortions. Over the past several years, we’ve seen reality and fiction become increasingly intertwined. Take, for instance, the case of "Goncharov," a cinematic fabrication born on Tumblr in August 2020. This online creation–a figment of some nameless auteur's imagination–rapidly amassed a cult following, going viral in November 2022, and showcasing the boundless potential of the digital realm to spawn autonomous entities.

Wall Street Bets and Goncharov as internet-native phenomenons
Wall Street Bets and Goncharov as internet-native phenomenons

But Goncharov was just the tip of the iceberg. We've witnessed the rise of communities like r/WallStreetBets, a microcosm of the internet where niche interests find a home, and organic social protest movements aiming to improve the equitable standing of people around the globe. These communities have forged a sense of belonging for countless individuals and have even been known to wield significant power, coordinating market movements and giving everyday people a voice in the financial and political world.

As online organizations, experiments, and movements have grown, these communities have contributed to our fragmented notions of “consensus reality,” creating what appears to be irreconcilable divisions that are fracturing society. The truth is increasingly hard to discern and reach consensus around. Greater information sharing has seemingly eroded trust in institutions, including universities and media outlets (especially as journos and individuals speak directly to their audiences), and in some cases have given rise to informational disarray and individuals lost in the noise of the internet.

Despite the growing concern encircling the internet and its impact, it is undeniable that the internet has created a powerful way for people to connect and collaborate in ways that were once unfathomable. But, it’s been missing a way to create community and avoid cultural fragmentation. A trend that’s beginning to change with tokens and token-gated communities.


As we scroll through the digital landscape, we are increasingly encountering communities organized around tokens. One explanation is that tokens serve as a kind of "Schelling point"—a term coined by economist Thomas Schelling to describe a focal point that individuals will naturally gravitate towards, even without direct communication. These digital assets serve as a kind of "gatekeeper"—filtering out the uninterested and bringing together those who share a passion. It's a powerful tool for coordinating actions and building communities, even when communication is limited.

Let's take the example of an online community of art enthusiasts. These individuals may be scattered across the globe, but they all have one thing in common: a love for a particular artist or style. They may have never met in person, but they find themselves drawn to a specific NFT that represents this shared interest. In this way, the token serves as a symbol of membership or interest in the community, filtering out those who are not truly invested in the subject matter.

Despite these very real concerns of “consensus reality,” the internet has undoubtedly provided a means for people to connect in ways that were previously impossible. Our belief here is that tokens, as Schelling points for gated communities, can help ameliorate the fracture and noise individuals feel online.  By cutting through the chaos in these small, gated groups of like-minded people—with “skin in the game,” i.e., a token—can begin to forge deep, real connections and build healthy subcultures in the shadows of  the masses, in groups that provide more signal than noise.

For example, the same group of art enthusiasts, who have all converged on a specific NFT, can use this shared interest as a starting point for organizing meetups, creating online discussion groups, or even collaborating on a project. A token serves as a shared focal point, but it’s just the beginning of creating an online community. In a world where information is constantly thrown at us from every direction, it can be overwhelming to find like-minded individuals. Tokens are increasingly a compass, guiding us to those who share our passions and interests.

The significance of these advancements cannot be overstated. The importance of online coordination is often overlooked, but it holds the potential to dramatically transform the way we interact with one another and the institutions that govern our lives. In the past, coordinating with others was a laborious task and often required physical proximity or a high level of trust between individuals. However, the internet has altered this reality, allowing us to coordinate with people all over the world with relative ease.

Tokens are new tools for online coordination, and will likely enable the formation of new institutions and DAOs. In the past, institutions such as political parties, labor unions, and religious groups were essential for coordinating large groups of people. But the internet has made it possible for individuals to establish their own institutions, such as online communities and micro-social networks. These new institutions can be more adaptable and responsive to the needs of their members than traditional institutions. They can also be more democratic, giving individuals a greater say in how they are governed.

The expansion of online coordination facilitated by NFTs holds the potential to reshape the internet itself. In the early days of the internet, a small number of large companies like Google and Facebook dominated the online landscape. But as online coordination becomes more prevalent, and as the tools of coordination become better, we are likely to see a shift away from these monolithic platforms towards a universe of small communities. These communities will be able to organize themselves in ways that better suit their specific needs and goals. And as they grow in size and influence, they will drive the evolution of the internet in new and unexpected directions. This is a groundbreaking way of connecting with people, lessening the noise of information disarray, and in a way that doesn’t require a  “consensus reality.” It’s gating by interest, without having to communicate a word.


With these changes, it appears likely that the Internet will enter into a phase (very tempted to say vibe) shift.  Due to mounting exhaustion of the current Internet and powerful new tools like NFTs, we’re likely going to see a new era of community-building, marked by a shift towards smaller, more niche groups. This cultural transformation will be driven by a number of factors, from the oversaturation of major social media platforms to the growing desire for personalized and authentic connections. And putting aside their initial hype, a key driver of this revolution will likely be NFTs and other tokens.

Why? Because they serve as powerful symbols, both publicly and within a given group. This is not surprising when we consider the work of Carl Jung, the famous Swiss psychiatrist and psychoanalyst. Jung believed that symbols have a profound ability to connect people and facilitate communication. He argued that symbols act as a bridge between the conscious and unconscious mind, and can be used to coordinate and create networks of individuals who share a common understanding of that symbol.

CryptoPunk #2527 and Carl Jung
CryptoPunk #2527 and Carl Jung

Boiled down, NFTs are symbols for online communities. And, by owning a specific NFT, individuals can show off their affiliation with a particular group or subculture to the world and signal their values and interests to others. For example, owning a specific CryptoPunk might signal to the outside world which community the individual aligns with, and also serve as a signal to members within the CryptoPunk community as to their taste and style, when they joined the community, or may just be a simple flex. In the same way, owning a specific NFT of a piece of generative art might signal to the outside world that the individual is a part of the generative art community and also signal to the members within the community what type of generative art the individual is interested in.

The NFTs' ability to project, distribute, and manifest symbols globally is one of the reasons for their meteoric rise in popularity. It's not just about speculation; it's about coordination, and their ability to act as global symbols. And, the power of symbolism is becoming increasingly important as we move towards a postmodern age.

Unlike platforms and traditional institutional organs that manufactured “consensus reality,” tokens are symbols of something that looks a bit different, something that represents our emerging hyperreality, as outlined by Jean Baudrillard.  As Baudrillard presciently observed, symbols, signs, and media images in society have come to increasingly replace the things they represent–this results in a loss of meaning and distinction between the reality and the representation of reality. Hyperreality is our forthcoming state where we’ll no longer be able to distinguish between what is real and what is a simulation of reality. It will be a condition where the simulation becomes more real than the real thing. Baudrillard's theory of symbols suggests that the image on an NFT, or the symbolism of the image, may become distinct from the community it represents or even how the world sees it. Tokens, which start as Schelling points, can evolve in unexpected directions, because groups will form and evolve like memes.  At the same, these new groups provide its members with identity in an increasingly fractured world.

As we move towards hyperreality, the distinction between reality and representation will no longer be clear. Instead, we will be presented with a seamless blend of the two, where it is difficult to tell where one reality or representation ends and the other begins. With the convergence of advancements in AI, AR, VR, it's building a world that will be increasingly indistinguishable from today. The world of hyperreality will be a world where technology has advanced to the point where symbols, representation, and reality are intertwined and seamlessly integrated into our daily lives.

This is why communities are so important. They will help people achieve a degree of coherence in a world that is increasingly incoherent and provide a way for individuals to signal their interests, build a persona, and be identifiable in the fog of the internet.  And with these developments, tokens will likely sit at the center.

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