A joke comedian Peter Overzet made three years ago is suddenly looking like a potential revenue stream. It’s a very crypto story.

Overzet has a boorish, cash-grubbing character named Pete Manzineli who, in 2018, launched his own physical crypto token: $MANZ. Only 69 were minted (naturally) and released on 4/20 (of course).

People bought them all, and there’s now a set of NFTs as well.

“The character himself is going for the money grab and he makes lots of jokes about it being about community,” Overzet said. “But, me, myself, the one actually producing it — I am actually trying to build community and give value. It's this weird thing, I enjoy making fun of all the cash grabs and the bullshit projects, while also thinking, can I actually do inventive things with this that other people aren't doing?”

Investors think creators like Overset can, to the tune of hundreds of millions of dollars.

“It’s revealing something,” Mikel Jollett, lead singer of The Airborne Toxic Event, said of the creator economy boom. “I don’t think what you’re going to see going forward is $69 million for Beeple. I think what you’re going to see is thousands upon millions of smart contracts flooding all these different industries.”

There’s plenty of money. The likes of Andreessen Horowitz, Coinbase Ventures, Sequoia Capital and Winklevoss Capital have anchored or chipped into funding rounds for social token startups.

Crowd-sourcing funding events are also gaining steam. Social token platform Rally, for instance, recently raised a crowd-sourced $57 million. Some $250 million has flowed into controversial social token Bitclout’s operational wallet, according to Crypto Investor on-chain analysis.

Lots of capital is flying around. But voices like Whale Shark say each service has its own purpose.

“I think that ERC-20 based tokens, like what Rally and Roll are building, are very good for communities. ... Creator coins are labeled as such because they allow individuals to commercialize their social media influence,” Whale Shark said.

The allure for creators is simple. A social token allows a direct economic connection to their fans, for which there are myriad middlemen today. Creators can issue special content through their token to investors. And the development of NFTs and smart contracts could allow artists to shop concert tickets directly to fans.

To Bremer Morris, chief marketing officer at Rally, it also lowers the barrier for sustainable art.

“If you can get 1,000 true fans to buy into your economy, you can build a sustainable career as an artist or creator,” Morris said. “Then as it scales, you've established the mechanism for engagement is on an economy that you own, rather than an economy that is beholden to what the platform where you grew up.”

Rally recently launched the social tokens of indie rock band Portugal the Man ($PTM) and Tiger King star Carole Baskin ($CAT). Now playing: “Feel It Still… 🎵”

Like much crypto, with little regulation, the space is fraught with risk. The SEC has yet to issue guidance pertaining to social tokens, but paying rewards to social token investors are dancing dangerously close to dividends.

Some users on Bitclout even claim to be making direct payments to investors of their coins, which Whale Shark says is playing with fire.

“Anything that offers a direct dividend on holdings of social tokens, it's a security, right?” he said. “The only reason why it's not shut down is because the projects are just too small for the SEC to go after them.”

Most existing social tokens are built on Ethereum, as well, which carries its own issues. The network remains sluggish and gas fees, the cost needed to execute transactions on the Ethereum blockchain, can be an expensive barrier for entry. The learning curve to enter social tokens has come down considerably (Rally now offers credit card purchases), but remains high compared to other industries. 

A joke comedian Peter Overzet made three years ago is suddenly looking like a potential revenue stream. It’s a very crypto story.

Overzet has a boorish, cash-grubbing character named Pete Manzineli who, in 2018, launched his own physical crypto token: $MANZ. Only 69 were minted (naturally) and released on 4/20 (of course).

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