Celebrity tokens: What are they and are they good investments?
Celebrity tokens are gaining popularity but they are generally not a sound investment. Find out what they are and why you need to be cautious about them.
What are celebrity tokens and should you invest in them?
The trend of creating cryptocurrency in someone’s likeness is always on the horizon and that can be seen now with celebrity tokens. Some of them are made and promoted by the person whose likeness they are inspired by while others are driven by their fans. Thus, it works similarly to a memecoin in tokenomics and potential growth.
Key Takeaways
- Celebrity tokens are meme coins based on celebrities.
- There are no other uses for celebrity tokens other than financialisation.
- Some celebrities mint their tokens in collaboration with an exchange but others are made by fans.
- Celebrity tokens are subject to the same risks as other altcoins.
The concept behind celebrity tokens is similar to merchandising in which it is expected to grow together with the popularity of whose likeness it was based on. For example, coins made and associated with a certain basketball player will be highly coveted by its fans, thereby creating high-demand liquidity. Find out more about it with this celebrity token guide from Gamdom:
How are celebrity tokens fundamentally meme coins?
Meme coins like Dogecoin (DOGE) and others that inspired it like Shiba Inu (SHIB) started as fun, lighthearted cryptocurrencies. Despite their playful origins, their tokenomic structure was good enough to give them value as a mode of payment over time. Their volatility has also made them a popular store of value, similar to Bitcoin (BTC).
Celebrity tokens are similar in a way that they are dependent on the meta to give the assets leverage. Unlike Ethereum (ETH), these tokens usually don’t have other functions other than financialisation. They also don’t have the novelty that Bitcoin has, making their success heavily dependent solely on the fans of celebrities the tokens are derived from.
What can be considered celebrity tokens?
The term ‘celebrity token’ refers to digital assets created in the likeness of famous individuals. However, this does not count Satoshi (SATS), a Bitcoin denomination named after Satoshi Nakamoto, the famed pseudonym of Bitcoin’s creator. Instead, celebrity tokens are often layer-2 digital assets launched specifically on Solana (SOL).
Some examples of crypto celebrity tokens include Australian-American rapper, Iggy Azalea and former United States president, Donald Trump. Celebrities in sports like Christiano Ronaldo and Caroline Wozniacki were also approached to collaborate with token issuers to make celebrity tokens in their likeness.
Disclaimers about celebrity tokens
Celebrity tokens are often created in collaboration with the personality they represent and a token exchange. When this happens, then it’s a project from both sides and they are going to be heavily involved in its marketing and distribution. However, a celebrity may have no hand in the creation of their token.
One such example is Donald Trump who was a major meme coin meta in global politics. Many tokens named after him and his campaigns were done as a joke but Make America Great Again (MAGA) is a serious investment for his supporters. Revenue made with this token is promised to aid charities and foundations.
Nevertheless, the celebrity who did not officially help make the token is not obligated to promote it. The asset can still gain upward trends from their popularity but they are not expected to mention, reference, or trade it.
Celebrity tokens also face challenges in regulations, specifically regarding auditing and validation. There is no industry standard for these because there is hardly any framework to use as a basis for monitoring Solana-based meme coins. Thus, trading celebrity tokens is a risky venture heavily dependent on community trends.
Spin the reels and win big at Gamdom slots
Potential risks from celebrity tokens
While on the topic of learning ‘what are celebrity tokens’, it’s important to emphasise risk factors. Like meme coins, celebrity tokens can be subject to many pitfalls in the economy. Here are some examples and how to avoid them as a trader:
Volatility has a trend-chasing meta
Meta or trend determines the value of every digital asset in the crypto world. Trailblazers are often the most successful and trend chasers are rarely given the chance to fully prosper. Celebrity tokens follow the popularity of a celebrity which means that it can fumble when the person it’s inspired by falls out of public favour.
Possible causes of losing popularity include making decisions that alienate their audiences or making a controversial statement. For sports personalities, it can happen when they’re past their prime and are outclassed by younger talents. The problem is that most celebrity tokens are issued when the personality’s popularity is at its peak. They can remain relevant in their respective industries but there won’t be new waves of fans to buy into their tokens.
Rug-pull scams can happen within the community for each coin
Given that some celebrity tokens are created by fans rather than the celebrities themselves, there’s a high risk of rug-pull scams. Bad actors can band together in hyping up an artist or athlete to raise their celeb token price only to mass sell when the market hits a resistance ceiling. Such a scam can be blamed on the celebrity because fans who wanted to support them ended up being betrayed by those they believed were fellow fans.
Tokens can be copyright stricken if the celebrity is against their creation
Crypto is gaining popularity worldwide as it gains adoption in various sectors. Gamdom in gambling is one example and most gamblers are in favour of this development. However, some individuals, including celebrities, remain sceptical of blockchain-based financing.
If they ever become the chosen meta for a celebrity token, then they can call for a copyright strike on the digital asset. Solana developers are likely to favour their request and decide to take down the celebrity token. When that happens, then the project will be taken down. Policies for refunds or lack thereof will depend on the developers.
Should you join the hype for celebrity tokens?
Celebrity tokens are still being tracked, hyped, and traded in the market. Unlike BTC or DOGE, they lack widespread potential and serve primarily as merchandise for celebrities. However, they are still digital assets you can own and use for transactions.
The best way to invest in celebrity tokens is to simply hodl and engage in spot trading. It’s unlikely to be adopted the same way as other crypto, even as a payment option on platforms like Gamdom. Their limited utility beyond their fan base restricts their potential for economic growth.
