Tokenized Communities

Year in Review

2022 Tokenized Communities Year in Review — From individual to collective creation.



This isn’t the first time Forefront is looking back on our year in tokenized communities, and there’s no doubt things have changed – a lot.

Our first report, Social Tokens Year in Review 2020 , explored the extremely nascent landscape of social crypto. It covered the origins of personal tokens through tokenized time (Matthew Vernon’s “Boi”), the Initial $ALEX Offering from the now founder of Showtime, the early days of $RAC, NFTs as payments ($WHALE), permissioned access (CollabLand), and much, much more…

As of December 28th, 2020, there were no more than a couple dozen social tokens on Ethereum with around 7000 cumulative holders and an aggregate market cap of $81M.

This report is a celebration of how far we’ve come, and the opportunity ahead of us to bring tokenized communities to the masses.

Disclaimer: We recognize that this report is not fully inclusive of all tokenized communities / DAOs / On-chain organizations in the space. The authors of this report are associated with many of the projects mentioned in this recap and have done their best to remain unbiased. None of the information presented in this report is meant to be treated as financial advice and we recommend that all readers do their own research. Please DYOR.

From Social Tokens to Community Tokens

In late 2020, just before the initial report was launched, Forefront began as the “Home of Social Tokens,” aggregating everything happening from creator tokens to NFT collector tokens and more.

As NFTs began to take off and new communities began to emerge, it quickly became clear that all social tokens were trending in the direction of community tokens – a shift from individual to collective creation.

So much had changed that in July 2021, just over 6 months after the initial Social Token Year in Review, the Forefront community felt it was necessary to run it back with another recap to map out where the space was headed at lightspeed.

2021 was the year that communities were recognized as the center of the social crypto ecosystem. Still, there was a lot of trial by fire, and many not-so-great decisions were made as folks attempted to unlock the promise of web3 and tokens as new economic models.

The 2021 report highlighted the rise of Seasons from communities like FWB and Forefront, the Roll Hack, Rally and Bitclout making waves, Bankless DAO coming onto the scene, and more. Later that year, communities like Cabin, Krause House, and Songcamp began to catch fire as well.

There was a ton of excitement, rightfully so, headed into 2022. It was said that the “Year of the DAO” was upon us, and in some ways this was true. 2022 was the year that sustainable models slowly began to reveal themselves, as new experiments learned from the mistakes of the old and OG communities began to adapt to the changing tide.

2022 was the year that the tokenized community was truly born.

“The Landscape”

OG Communities Continue to Mature

The ecosystem’s perspective on tokenized communities has evolved over the last couple of years. In late 2020 into 2021, any community with a social token fell under this canonical umbrella. As these communities grew and contributors were able to parse out what really makes a token valuable and necessary, our team at Forefront evolved the definition of tokenized community to encompass onchain communities using governance tokens to allocate funds toward community projects.

This definition is both prescriptive and reactive. When we originally published our Tokenized Communities essay in March of last year, only a few communities fell under this seemingly strict definition.

Today, even the “OG” tokenized communities like FWB, Forefront, Bankless, and more are slowly shifting toward sustainable economic models focused on funding community projects. In many ways, it is an aspirational definition that points to a world of sustainable, collaborative online communities.

Despite it being easier than ever to launch and participate in a DAO onchain, community engagement is still a major issue. Every single tokenized community continues to struggle with hitting quorum on some proposals, attracting talented builders and creators, and building sustainable momentum toward their missions.

Some communities, like Lil Nouns, have found themselves with very large and diverse bases of tokenholders but subpar engagement given the lack of a focused vision and mission.

Forefront built Pulse to give communities an opportunity to collectively sensemake around their mission, goals, values, and interests onchain. With web3 social making a run and products like Farcaster, Lens, Yup, and more catching steam in 2022, it’s clear that 2023 will be the year that tokenized communities that figure out their economic models will redirect their focus on engagement to ensure long-term sustainability and growth.

The “Nounish” Unlock

You can’t do a Year in Review without a meaningful discussion of Nouns DAO. Launched in 2021, Nouns DAO asserts a simple, on-chain promise: one Noun a day, forever. The Nouns perpetual auction mechanism has proven to be one way for tokenized communities to unlock sustainable revenue that (theoretically) reflects the value of governance over the allocation of funds toward community projects. Nouns is currently sitting on a 27,800+ ETH treasury, hundreds of voting members, and a rich ecosystem of builders and creators proliferating the Nouns meme.

Of course, many communities looked to Nouns as the model to replicate, with varying levels of success. Lil Nouns and Gnars, for example, built a strong reputation as Nouns “subDAOs,” proliferating the Nouns meme while adopting a more specific community mandate. However, both have struggled to accrue even a fraction of the treasury that Nouns DAO has.

On the other hand, projects like SongADAO took existing creative endeavors – in this case, Jonathan Mann’s Song a Day – and turned them into a tokenized community by adopting the Nounish perpetual auction mechanism.

Jokedao also launched a DAO powered by a perpetual sale (weekly instead of daily): jokerace dao. Each week, a jokerace is launched where participants use jokedao to vote on the best joke, with the winning joke is minted as an NFT, making it the first DAO governed by an entirely member-generated NFT collection.

Purple, Public Assembly, BlvkHvnd, and other DAOs gained steam in Q4 thanks to Nouns Builder’s protocol, and Builder DAO (the DAO governing the Builder ecosystem and protocol) has amassed the second largest treasury in the Nounish ecosystem.

PFPs Become DAOs

2021 saw thousands of new PFP collections drop, each with their own communities, (and sometimes) mission and values. Most of these communities, however, were left asking, “what comes next?” They were dependent on core teams to continue to build out the ecosystem while the community essentially acted as free marketing.

Meanwhile, tokenized communities like Nouns DAO were gaining momentum, allowing tokenholders to fund proposals in line with the community’s mission. Funds were being allocated toward community projects, not being hoarded by a core team.

With the launch of ApeCoin DAO, a rough blueprint and new expectation for PFP projects was set. Despite the fact that ApeCoin DAO used an entirely new token for governance, BAYC holders and other Yuga ecosystem members were able to participate in a DAO in a meaningful way, without needing to wait for a core team to push the ecosystem forward.

Many more PFP communities have either began their transition to becoming a DAO or are at least discussing it, and with the rise of new on- and off-chain tools to assist in this transition, we expect 2023 to be that many of the PFP projects who were able to build great brands will truly give power to their communities.

One of the biggest examples was Moonbirds, whose DAO is set to launch early this year. The DAO will be seeded with $2.6M worth of assets, including $2M of ETH, for NFT holders to govern. Proof, the startup behind Moonbirds, will also grant 35% of the ongoing creator royalties from both Moonbirds and its spinoff Oddities collection to the DAO. The organization will launch with a “cold start” caveat that lets Proof veto any “rogue proposal,” similar to how Nouns DAO began.

Business Model Evolution

“The DAO is the product.” — @thattallguy

From 2020-21, tokenized communities really only had one business model that seemed to be working, if you could call it a business model at all: treasury diversification rounds.

In March of 2021, FWB governance approved a treasury diversification of 7% of the token supply at a $10M valuation. Later that year, they approved a treasury diversification at a $100M network valuation. Forefront also conducted a treasury diversification round at a $20M valuation in late 2021, with Cabin and others soon following.

This model was clearly flawed: tokens were being sold in bulk like equity, taking them out of the hands of potential active members and still failing to create sustainable revenue for the treasury. This is why the Nouns perpetual auction model was so exciting for folks: revenue could scale as the community and its meme scaled.

However, it’s clear that most tokenized communities still struggle to generate sustainable revenue. No other “nounish” DAO has been able to generate even a fraction of the revenue through the perpetual auction mechanism that Nouns has.

Some communities like Water & Music and Forefront have managed to generate revenue through “membership passes,” analogous to web3-native media subscriptions.

Others, like FWB, focused on brand partnerships, leveraging the influence and expertise of their community to build a unique collaborative experience alongside some major brands like Hennessy.

Meanwhile, the end of 2022 saw experiments with open editions as a mechanism for DAOs to profit off of important media or cultural artifacts. Nouns DAO minted a DAO explainer video using Zora, which generated upwards of 300 ETH.

There’s More

Dreaming Big

One of the most exciting things about working in and around these communities is the ambition that they come to the table with. As Jess Sloss recently said, “Make something people want to be a part of.”

Across the landscape, it’s hard not to be excited by the big dreams of tokenized communities.

Krause House, for example, is building at the intersection of web3 x sports, with the ultimate goal of being the first DAO to purchase and collectively govern an NBA team. Last year they got one step closer to this vision, buying a majority stake in a BIG3 basketball team!

Cabin is building a network city for online creators. Today, this looks like a global coliving network for thoughtful people to create, colive, and conserve. With Neighborhood Zero thriving just outside of Austin, Texas, and many more to come. Although not explicitly related to their vision, Cabin has often been seen as an early manifestation of Balaji’s “Network State.”

FWB is also leaning into this vision of a “decentralized city,” moreso focused on being a cultural hub where “web3 is shaped.” The community is certainly one of the OGs, and has continued to pave the way for new and interesting experiments for other tokenized communities, including brand partnerships, IRL events, grants programs, and more.

Finally, it’s becoming increasingly clear that tokenized communities are the future of media. From decentralized media experiments like Rehash, collaborative media tools like Forefront’s Pulse, and new funding opportunities coming from the rich network of tokenized communities that are popping up every day, there is no doubt that media economics will fundamentally change not just due to their digital nature, but their networked nature as well.

Even long-form video production is seeing its world disrupted by DAOs: Shibuya, a project launched by Pplpleasr, crowdfunds production of long-form visual content – such as short films, movies or television series – by selling non-fungible tokens (NFT) called “producer passes,” disrupting the traditional studio-driven methods that now dominate the industry.

ERC-20, NFTs, and Dual-Token Models

Many called 2022 the year that the ERC20 died. With ERC1155s being used for “editions,” and 721s being used for 1/1 tokens, ERC20s seemed like an unsuccessful experiment. DAOs were supposedly sitting on massive treasuries, but when 90%+ of those treasuries were their own native governance token, widespread concern was understandable.

Many folks also pointed to the securities concerns, the complexity of managing liquidity pools, and the lack of revenue generated from a token airdrop that made ERC20s an unsustainable economic tool.

However, some communities new and old opted for keeping their ERC20s using a dual-token model.

Paradigm made major strides toward an effective dual-token model with the launch of GOO (gradual ownership optimization) for their Art Gobblers project: the more Goo a Gobbler has, the faster it generates more Goo. This means the total Goo supply will increase faster and faster every day, going from thousands to millions and beyond.

Communities like rugDAO have also made use of a similar token distribution model, where the longer you hold the NFT, the more ERC20 tokens you receive.

In general, much of the failure of the ERC20 thus far stems from two problems: lack of revenue and lack of distribution. First, if there is no meaningful treasury to govern, ERC20s are useless. NFTs have an advantage not because they are inherently better governance tokens, but because purchasing an NFT generally means money is going to the treasury, and thus there is something to govern. Second, NFT distribution models have generally been more equitable, whereas ERC20 distribution looks very similar to traditional startup equity distribution in many communities.

These two problems are widespread, but aren’t inherent to the token standard. Given the need for exploration in community reputation, tipping, ownership distribution, engagement, and more, we expect to see ERC20s make a comeback in 2023 and beyond.

Communities of Cultural Production

If you look close enough, you might argue that 2022 was the year of the metalabel, and you wouldn’t be wrong.

A metalabel is a release club where groups of people who share the same interests collaborate to drop and support work together. A metalabel is a lightweight structure that creates economic, emotional, and creative alignment between collaborators. A metalabel could be a tokenized community, and many are.

Metalabel, the company by the same name that coined the term, is building tools and models to help promote the development and production of metalabels worldwide. In many ways, though, the hard work was giving words to define a type of community that already existed.

Songcamp, for example, is an artists’ collective launched in March 2021 that took the year by storm in 2022 with Camp CHAOS. The “headless band” of over 80 musicians, producers, designers, and operatives came together to create over 40 songs, generating over half a million dollars in NFT sales, which were split amongst the bands’ participants.

Songcamp wasn’t the only music community to take advantage of web3 tools. 2022 saw the dawn of music collector communities, decentralized record labels, nounish music DAOs, and much more. In many ways, music is one craft that is embracing web3 in its entirety and experimenting with no limits.

“The Maturation” of DAO Tools

Bottoms-up Governance

Platformless Membership

Token-powered Knowledge and Ops


Token Creation

Recruiting and Networking

Onchain Permissions and Legibility

Top Stories

What to Watch in 2023

  • Regulatory clarity

Organizations like Syndicate and LexDAO have been exploring how to design DAOs that are compliant with existing laws, while a16z and others have been writing plenty and working with lawmakers on designing effective DAO regulations. Expect this progress to speed up in 2023.

  • Onchain maximalism

The power of tokenized communities is in the blend of “trustware and socialware.” With more DAOs coming onchain, expect an explosion of tools building for community collaboration and trustless funding.

  • Online -> Onchain Communities

With the announcement of reddit’s community points project, online communities are coming onchain fast. Tokenized communities won’t just be started from scratch, but will be born from some of the most active communities on the internet today.

  • New brand, same tech

Speaking of mainstream adoption, branding will be a major story in 2023. “NFTs,” “DAOs,” “tokens,” and other crypto-native words haven’t proven to be palatable to most consumers. Adoption will come with rebranding the tech.

  • DAO <> Brand Partnerships

FWB set the stage for DAO partnerships with major brands, and Nouns DAO is taking the baton forward. Brands will seek to tap into these active, onchain communities in the new year.

Closing Thoughts

2022 was truly a hell of a year, and 2023 is already off to an even hotter start. 


Tokenized communities are finally catching their stride, developing new revenue models and funding community projects that previously would have never been funded by traditional institutions.

As more and more internet communities begin experimenting with web3 tools, it’s inevitable that we will see a Cambrian Explosion of creativity and business on the web, often in ways we never could have imagined just ten years ago.

Forefront is continuing to build at the frontier of tokenized communities. We hope you’ll join us for the ride in 2023.

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