"“Social Token Paradox” – a problem that arises within social tokens communities based on exclusivity. The challenge is that social tokens need to appreciate by including new members and yet these membership gated communities must keep their groups exclusive otherwise the social and utility value will decrease. Thus, the social token paradox is born."

"Phase 1: An exclusivity-based community is build using a social token whereby membership requires possessing a certain number of tokens."

"Phase 2: Early entrants to the group acquire tokens and therefore the token appreciates. New entrants also reinforce the idea that the group is exclusive and socially valuable and therefore the exclusivity increases for a time."

"Phase 3: 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."

"Phase 4: Ultimately new members are incentivized to recruit new members to ensure that the token appreciates. However, at a large enough size, new members result in diminishing returns for exclusivity value"

"Phase 5: Members sell the token for profit or because of decreased exclusivity/utility. Eventually, the community reaches some equilibrium before continuing the cycle again."

"Unfortunately, there are diminishing returns to growing an exclusive community. More people generally means less exclusivity and therefore less social value."

"Performance or Accomplishment Exclusivity"

"membership can be given to individuals who have completed tasks in various DAO (e.g. bronze members, silver members, etc.) or previous voters. Tiered membership based on accomplishments or participation can bring together individuals from different communities into a single DAO or community."

"Time Exclusivity"

"Creating membership based on time can align long-term players and adds an element that cannot be gamed or financially purchased. Time membership can also be combined with accomplishments such as tasks that involved grinding away at some task for hours or weeks until it is achieved."

"Experience or Service Exclusivity"

"Final Thoughts on Exclusivity"

"This isn't to say that financial exclusivity is negative – how people chose to allocate their capital whether it be on activities, memberships, or otherwise is all about tradeoffs."

"Exclusivity brings value to communities based on a shared purpose or goal. 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."