Token-Gating is like a Bouncer for your Exclusive Online Community
The crypto landscape is constantly evolving. Because of its rising popularity, new technology and new concepts continue to advance the face of cryptocurrency. Just as new users – and even whales – catch onto the latest development, another game-changing tool surfaces. One of the newer crypto concepts is the idea of token-gating.
A token represents a tradeable asset or utility that resides on its own blockchain and allows the holder to use it for investment or economic purposes. Token-gating allows a tokenized group to control access to a certain community or content by requiring a specific amount of token.
What Is Token-Gating?
Token-gating is basically exactly what it sounds like. It’s a specific form of security that allows an entity to grant exclusive access to a community or content only to token holders. Think of it like a bouncer managing who comes and goes from a club.
This might mean exclusive content, private chatrooms, virtual events, or anything else an organizer might want to limit access to. Blockchain communities can take advantage of the unique identities of tokens and specific, non-fungible token (NFT) to control who has access to their content.
Who Can Benefit From Token-Gating?
Anyone! Token-gating is a great way to control sensitive information, certain web pages, exclusive video and audio content, chatrooms, and virtual and physical events.
Some groups that might use token-gating include:
- Artists, musicians, & fan clubs to share secret audio or video content only to paid members or members of a certain level.
- Schools may use gating to protect student information from anyone outside the student body or specific classes.
- Corporations can restrict private pages for their employees or additional content for certain managerial levels.
- Conference organizers & event planners can create NFT or set up token gates to control who can attend a conference (either virtual or in-person) and which sections of the conference guests can participate in.
How Does Token-Gating Work?
Traditionally, when you join a community, you sign up with your email and often other personal information. In the Web3 blockchain world , instead of your email, your digital wallet is your identity and login.
Most blockchain communities require users to hold a certain amount of token or NFT in their wallet to gain access to the group or exclusive content. When users sign up with their wallet, their data is verified to ensure they meet the digital requirements before allowing entry. If the user’s wallet has the Token amount or NFT required, they’ll have access to that information.
Why Not Use Traditional Membership?
Private groups, fan clubs, and exclusive content have been around a lot longer than the crypto conversation and traditional membership and security has worked just fine. So why fix it if it’s not broken?
For one thing, just because something works, doesn’t mean it can’t be made better, stronger, or more efficient.
For another, as Ryan Hoover, founder of Product Hunt, mentioned in a recent tweet:
It’s not about only about gating. It’s all about ownership and governance.
When a community is tokenized, the token holders have control over the governance of the project, which also makes them more invested in the game.
The benefits to tokenizing your community are endless and if you want to hear more about it, check out our blog on the benefits of social tokens.
Token-gating can also offer additional benefits for a community.
- Better security. Token gating can be used to create a multilevel verification system. For example, data stored via token gating is only accessible after a user has proven their identity and permission to access that information.
- Ease of Use. The process for accessing site or application content is simple and quick, as users will have already linked their verified credentials to the token-gated site.
- Cost-effective. Token gating is an extremely cost-effective solution for monitoring user behavior due to its low overhead costs.
How Does Token-Gating Differ From NFT Gating?
The ideas are similar, but operate with notable differences.
NFT are non-fungible, non-divisable, and usually limited in quantity. These are more similar to an access cards or backstage pass. Access is limited by the amount of NFT issued or minted for a specific community or event.
With token gating, access is limited by requiring users to hold a specific amount of token. Token gating generally allows more people to join in because generally there isn’t a strict limit on how much token is available, as opposed to NFT. Token gating can also easily allow a community to set up different levels of access by requiring different amounts of token.
Do I Lose Access If I Sell My Token or NFT?
This is a very important question and correct gating implementation is crucial to the integrity of a community.
If a certain amount of token or NFT is required to access exclusive content, users should be required to maintain ownership of that token/NFT as long as they’re part of the group. This requires the creator to set up a procedure of regularly checking their users’ wallets to ensure that they maintain the credentials required to be a part of the community.
At WhaleRoom, we work diligently on our verification mechanism. Our system is set up to automatically monitor users’ balances constantly and anonymously to ensure that only users that meet the threshold set by the room creator gain access.
We use numerous APIs to check each members’ wallet balances at the time of entry into the platform, room, special feature, or event. We call our technology “Proof of Ownership” and use it to cryptographically verify that each user unlocks the enhanced experience and rooms they qualify to be in.
When you set up a community within WhaleRoom, you can token-gate your social space according to your preferences. We have built a token-gated social infrastructure so you can seamlessly create an exclusive space for your users to discuss your project with you and other holders.
Check out our website or reach out to us to see the unique features we’ve designed for crypto communities and learn how you can join us today!
Join now: app.whaleroom.org