Barring utility growth in other forms, exclusivity-based communities face the Social Token Paradox and are destined to repeat a vicious cycle:

At some threshold (depending on the group) the continued growth of new members starts to decrease the social utility and exclusivity of the group. However, the token price rises as new members are forced to acquire tokens.

at a large enough size, new members result in diminishing returns for exclusivity value.

Members sell the token for profit or because of decreased exclusivity/utility. Eventually, the community reaches some equilibrium before continuing the cycle again.

More people generally means less exclusivity and therefore less social value.

Financially-derived exclusivity or membership is a double edge sword – it will succumb to the social token paradox. It naturally limits the size and potential growth of a community.

Exclusivity as a value proposition will always exist but it doesn’t have to be wholly financially dependent.

Accomplishment or performance is a socially valuable signal.

Creating membership based on time can align long-term players and adds an element that cannot be gamed or financially purchased.

Shared experience unites various individuals

As social token communities seek to expand their networks, it will be vital to imagine ways to bring utility and value that aren’t only financial in nature.