How are Utility Tokens Used?
A blockchain is a decentralized ledger that records and immutably verifies transactions. While most people are familiar with one or two examples of the ways blockchain technology can be used, very few have grasped the possibilities of its practical application across a wide range of industries. Creators in spaces like fine art and entertainment, however, have recognized the distributed ledger’s potential as a foundation for complex and specialized processes. One way that these creators are looking to utilize blockchain in their daily operations is by implementing utility tokens to take the friction out of their internal economies.
Utility tokens are generally used to moderate actions between platform participants and incentivize positive behaviors by providing token payouts. This is because blockchain networks can effectively incentivize and execute complex interactions with minimum administrative overhead. Blockchain transactions do not go through a middleman, so there is no need for participants to have to wait for payment settlement or pay a third-party verifier. These frictionless, nearly instantaneous interactions open the door for internal economies that reward positive behaviors in realtime and facilitate constructive peer-to-peer activities. Because blockchain immutably records network history, the platform also continually generates accurate and valuable data, another process that happens without a costly intermediary.
The FAN Token on the Filmio Decentralized Platform
What are the benefits of using a utility token within a platform? To understand the answer, let’s take a closer look at Filmio’s FAN token. The FAN token is a utility token that incentivizes audience interaction and creates a democratic platform that solves many of the entertainment industry’s most significant inefficiencies.
In the entertainment industry, fans and creators do not have an effective way to communicate with each other. The fan-creator connection is vital to the entertainment industry, but creators typically don’t get fan feedback until post-production test screenings. By then, much of their time and money has already been spent. The result is a carousel of TV shows and films that were expensive to create yet flop when they are released. This cycle leaves studios at a loss and fans unhappy.
Because productive fan-creator interactions (and the valuable data they provide regarding which projects should receive resources) are so rare, and flops are so expensive, investors and other stakeholders would rather support established or well-known creators instead of taking a chance on original content from fresh, innovative minds .
There is a Solution
Functional fan-creator interactions are possible. Filmio uses its FAN token to help creators and fans have progressive, meaningful interactions. Fans earn FAN tokens by interacting with creator content and providing valuable feedback. They can use those tokens to gain exclusive access to special perks, donate to projects and much more. By providing an internal economy, Filmio incentivizes peer-to-peer fan-creator interactions. These interactions generate worthwhile connections between fans and creators, helping creators make content fans are excited to see while generating meaningful data points for investors.
Hollywood is a Blackbox
Another one of the entertainment industry’s biggest obstacles is its lack of transparency. Hollywood and other major entertainment institutions are notorious for not giving the public a look at the production life cycle or providing an accounting of its astronomical funding costs. Investors may not know how their money is being spent on a movie set. Fans may not realize a movie’s quality or content thanks to a slick marketing campaign. Creators may get railroaded out of their fair share of profits. Opaque processes create confusion and allow inefficiency to thrive.
Blockchain technology inherently solves these problems. Information stored on distributed ledgers is transparent, immutable and decentralized. Because that information is consensus-based, investors, creators and fans who use the blockchain have a source of truth and accountability that they can trust. Investors can view dozens of meaningful data points regarding fan interactions in realtime to help them understand their possible returns on investments. They can also track their money’s path through a project and hold filmmakers accountable for spending it responsibly. Creators benefit from this transparency, too, by using reliable data to understand their fans’ needs and woo investors.
On Filmio, all actions that take place are recorded on-chain; this means that there is a transparent data record of all interactions. This radical transparency increases the quality of data generated while keeping powerful figures from creating inefficiencies that ultimately damage the entertainment industry. At the same time, investors will, for perhaps the first time in history, have access to reliable data about new creators and projects that don’t yet have name recognition. That data can help investors find a new and diverse crop of creators and projects, while simultaneously allowing them to make better investment decisions.
A More Efficient Economy
Utility tokens, such as Filmio’s FAN token, are powerful because they take the friction out of economies with frequent transactions. Utility tokens offer intuitive and productive tools for moving industries forward. By putting the entertainment industry on the blockchain, Filmio is creating a more democratic, transparent and diverse entertainment industry. It is creating an industry where fan-creator connections help artists succeed and fans receive the high-quality content they want.