Today, several platforms have emerged to facilitate the issuance of Social Tokens such as DeSo, Roll, Rally, Chiliz among many others. It is an exciting opportunity to unlock the potential of communities and let Social Tokens and DAOs well positioned to drive the next wave in Web3. However, while these projects aim to facilitate token issuance, the overall experience for the token holder, the real customer, hasn't been really great. Lots of concerns around the real benefit of the token, many scammers, trust, access to trade, liquidity and different kinds of tokens (Creator Coins, Fan Tokens, DAO Coins etc) and platforms that confuse users about the value of the tokens. Although these issues are part of the creation of a new ecosystem, it slows down a significant migration of the mainstream users to this market.
We have described the main challenges below so this ecosystem can thrive followed by our vision.
Education: Each Social Token has a peculiar characteristic related to governance rules, vesting, segment, benefits, type of engagement, (Non) Bonding curve Tokens among others. It is still too confusing for the mainstream user navigate in this market. There is no seamless and trustable place so customers can have their first experience on Social Tokens like what Coinbase and OpenSea did for Crypto and NFTs respectively.
Trust Building: Today it is much easier to create a social token, so scammers and many creators are issuing tokens without putting effort to deliver what was promised. Without a social layer and other systems in place, it is difficult for participants to compare, among many things, the credibility, engagement and assess the quality of benefits delivered. The focus on trust building is essential to create a sustainable ecosystem.
Connectivity to multi-platforms: Social Tokens do not all share same chain and are located in several exchanges. Once a token is issued, it is almost impossible to move to a different platform and, over the years, a few more efficient chains may also be built. We will always have some of our favorite token on a different chain. This is not just about being chain agnostic to acquire a token, but mainstream customers will always prefer trade where they can find all tokens in one place.
Customer experience: The reality is that most of the Web3 projects are still not user friendly. Many will never be. Non-custodial projects usually requires some technical know-how to use and, in general, do not provide any customer support. It is impossible to recover funds after losing private keys while that there is always an easy option for recovery in custodial platforms. The world where there is no identifiable operator to get support from and to complain to if things go wrong does not work on the mainstream. In the mainstream, we have to go above and beyond. Convenience always wins.
Mainstream Creators: Famous creators, in the end of day, they are running a business. And very few successful business would suddenly refuse to participate in the centralised world they are connected to, put their business at risk or switch to a completely new way of working. If they are going to use a new platform, disruption should be minimum and that should provides the highest operational standards (including KYC, AML, security among many others). In the DeFi vs CeFi conundrum, the convergence of both worlds (DeFi plus CeFi) will be the best approach to attract the mainstream creators. We need an alternative in this direction.
Liquidity: Liquidity is always an issue for non-bonding-curve tokens (NBCT). Bonding-Curve tokens can remove the need for liquidity and can be great way to start up a social token, but they have a low level of flexibility and that is why many creators opted for NBCT. Liquidity-pool-based exchanges that allow trading of NBCT are inefficient for large amounts of trading pairs as capital has to be held to support trading. We need a solution that can scale to millions of trading pairs and addresses liquidity for different types of tokens in one place.
Purple Creator's Vision
To address all of these problems, we are building Purple Creator. We are the “Coinbase” for Social Tokens : a crypto exchange that aggregates existing platforms in one place. Like Coinbase was the first step for many users into the crypto ecosystem, bringing trust and a better experience for mainstream users, we are going to do the same for the Social Token market. We believe UX, trust and liquidity are essential to foster the development of the whole ecosystem of Social Tokens and DAOs.
We are building a first-in-class UX with native technology able to scale to millions of trading pairs that makes it easier for supporters to discover and trade social tokens. It is a custodial exchange that will bring all tokens together and will unlock many other potential synergies between different platforms.
Team members posse more than 10 years of experience each in building products from zero to hundreds of thousand of active users, former Amazon/AWS leader or building exchanges with one of the highest throughputs worldwide. It was also invested by DeSo (a chain backed by Sequoia, a16z) and invested by 20 angels from unicorn founders, influencers, VC partners, founders of successful projects in DeFi, former legal director from Coinbase among others.
In brief, Social Token projects are becoming more mature and are bringing an exciting opportunity to unlock the potential of communities and help creators to live their passions by providing a new way of entertainment and social interaction. Purple Creator was born to enable this ecosystem by supporting all stakeholders - Creators, Issuance Platforms, Blockchains and Token holders - with an essencial layer of UX and liquidity.
Purple Creator will start trading in March of 2022. If you want to be the first to know about it and sign up on Purple Creator for early access. Also, join our discord channel to continue this conversation!