SocialFi, which combines finance and social networking, will be the shining star of Web3
SocialFi, which combines finance and social networking, will be the shining star of Web3
I. What is SocialFi?
SocialFi is a combination of the words Social and Finance. social means social, and we can see from SocialFi that social is taken into accountDecentralizationWe can see the social token system added to motivate users for social incentives, thus naturally forming a combination of social and financial.
Second, why do we need SocialFi?
2.1People are interested inWeb 2.0Social network dissatisfaction
YouTube , Tiktok and other video platforms, there are not only video resources purchased by the platform, but also a wealth of original user videos. Users upload videos, share their own life clips, and the click-through rate of the videos translates into advertising fees, which motivates users to continue creating, forming a very good economic closed loop. So we can see that besides youtubers , game anchors, ins netizens, those creators in the non-traditional sense, such as educators, salespeople, chefs, etc., have created Tiktok accounts and transformed themselves in the form of digital media. But there is a structural problem with the revenue model of Web 2.0 social. The mainstream social platforms that currently exist, such as YouTube , TikTok , Reddit andFacebookBoth have adopted the ad-subsidized free product model, which means that content consumption on the platform is free so that they can rapidly scale up their users, and on the other hand, they rely on paid revenue from advertisers to subsidize the creators on the platform with certain metrics. The fundamental problem with this model is that the revenue eventually flows to the head creators, while most long-tail creators do not get a share. The revenue that should be theirs is actually diluted and diluted by the head power, and the principle of digital equity is affected to some extent.
2.2 Web 2.0Some drawbacks of traditional social
The emergence of SocialFi is an inevitable product to counter the drawbacks of traditional social platforms, which in the Web2 era were controlled by major social operators, who continued to profit from the underlying social data with little benefit to users.
-In the traditional social platform, users' social data is saved in the form of fields on the operator's server, and the data belongs to the platform party; SocialFi relies on blockchain technology, and the non-tamperable data feature is more conducive to solving the confirmation problem of users' data.
-Under the algorithmic mechanism of traditional social platforms, there is an imbalance in the distribution of benefits between users and platforms in terms of traffic realization, which is not conducive to protecting the rights and interests of users; SocialFi is where users gain revenue through the financialization of social influence, without the problem of third-party draws such as platforms.
-Traditional social networks require users' real identity information for all account registration, and the information stored in the operator's backend is highly vulnerable to leakage; SocialFi is based on blockchain technology, and the anonymity of users' identity information helps protect privacy andSecurity.
2.3Socialization is the meta-universe andWeb 3.0The necessary components for
After nearly 30 years of development, the root cause of new hotspots in the social circle is still people's pursuit of social identity, as evidenced by the development of Meta (formerly Facebook ), the world's social giant with 1.93 billion daily activities. At the beginning of the Internet's development, the emergence of equality and anonymity due to the opposition to traditional thinking made the Internet an unregulated world where information on the Internet was mixed and individuals could not feel the true temperature. Meta, on the other hand, introduced the real name system and distinct personal identity for the first time in the Internet world, so that the Internet began to intersect with the real world and greatly enhanced people's Internet experience.
Today's crypto world has also come to this juncture. While we seek the data sovereignty that encryption technology brings, we are equally eager to gain our own unique identity and positioning and to establish a true emotional connection with others. In the transition from Web 2.0 to Web 3.0, Internet users need to build some middleware to migrate from the simple to the complex. And it is impossible to move from the real world to metaspace overnight. The realization of the metaspace concept requires starting from the existing Internet world and using a series of Web 3.0 components to send Internet users to the metaspace world in batches and phases. After trying out DeFi's decentralized asset stream, NFT's digital work value discovery, theGameFiAfter the fun P2E, decentralized opinion publishing and personal display becomes the next Web3.0 component to be explored and developed. In the past history of Internet development, we can clearly see that socialization can be said to be a rigid demand of Internet users.
III. Web 3 Token Value
Current social tokens are based on an individual or organization's reputation, profitability and brand influence. Social tokens are usually issued to encourage users to contribute to that community, or tokens are used to incentivize users to contribute valuable content, and personal tokens are also dedicated to exploring the added value of individual content creators. In general, social tokens can be divided into three categories.
3.1Personal Tokens (Personal tokens).
3.1.1What are personal tokens?
Personal tokens are mainly issued by individuals withGovernance. It is mainly used for labor exchange, where users on the chain can exchange tokens for jobs that match the average productivity of the community, as long as they have recognition of the community. A typical example of a personal token is Roll , a community currency layer protocol developed on the Ether blockchain.
3.1.2What is the value of personal tokens?
What makes personal tokens valuable must stem from the project's reasonable mechanism. In general, personal tokens serve the following purposes.
-Access Rights
Access to a personal or exclusive community can be very valuable. People are social animals and always want to join niche collectives of like-minded people, and this is most evident in the fan economy. For example, buying tokens of celebrities/ NFTThe fan club can only be entered after.
-Economic Benefits
Exchanges like Cryptocurrency, with their platform tokens, have revealed the potential value of discount tokens. Individual tokens can come with similar discounts for merchandise, events, NFTs, and anything else sold by creators, brands, etc.
-Financial Incentives
As the token increases in value, early holders receive financial gains.
3.1.3Personal Token Project
Whale is issued by an individual buyer, WhaleShark, based on the Roll platform. Whale's token value is based on WhaleShark's own NFT assets, and the Whale vault is regularly audited by NonFungible.com. 50,000 tokens are allocated monthly by Whale for NFT acquisition, donations to artists, team salaries, community events, etc., and are recorded through Discord, one of the leading social media platforms overseas. In addition, creators can earn WHALE by pledging their NFT creations, and can also sell their work on Opensea with Whale bids.
3.2Community Token (Community tokens).
Community tokens are mainly issued and controlled by groups, usually by decentralized autonomous organizations (DAO) Management. Community tokens are mainly used to motivate members to contribute to the community. For example, community tokens are used to gain access to telegraph groups, special messages, etc. Community tokens are also used to encourage deep participation of community members, such as when the community launches a contest where token holders can vote on who will win at the end. A typical example of a community token is WHALE , which has various NFT democratized asset ownership. Based on the WHALE DAO , the decision around the governance of these NFTs is in the hands of the token holders.
3.2.1What are community tokens?
Community tokens, similar to individual tokens, have a token value that reflects the expectation of the value of the community. Communities are generally divided into two categories, one is content communities and one is DAOs. The former is generally to give value to content created within the community, whether it is articles, tweets, images, etc. or some kind of behavior, either by making it NFT or by rewarding it with tokens, in this way incentivizing the creation of content and consuming it within the community. Typical examples areMirror, it is a decentralized content creation platform similar to Medium, where articles published here can be used as NFT and can be saved on the chain for decentralized access.
The latter is a managed token that serves the purpose of DAO creation, such as Friends with Benefits, which has received investment from many top VCs such as a16z. FWB is a private social platform based on Discord's private server that gathers a group of creators and thinkers in the crypto field. Its token $FWB has a constant supply of 1 million, and participants need to hold a certain amount of the native token $FWB to join the social circle.
The line between community tokens and individual tokens is sometimes not as clear, and individual tokens naturally transition to community tokens as they grow in size and popularity. For example, WHALE, which was started by an individual, later evolved into a collective whose treasury is controlled by the community. The most prominent role of community tokens, in addition to having the value of individual tokens, is to give the token holders community governance and voting rights.
3.2.2Community Token Project
RALLY , one of the early and well-known social token issuance platforms, features the ability to combine its native governance token, RLY, with the creator's social token and mint a new personal token, which must be converted through RLY . The platform covers the entire process of issuance, channel, deposit, and trading, and Rally usesLayer2 solution to optimize mechanisms such as instant trading. The token holder has management rights to Rally Network.
Decentralized social platform BitClout , benchmarked against Twitter, aims to create a decentralized alternative to Twitter through proof-of-work and blockchain construction. The founder is Nader Al-Naji, the founder of the previously popular counting stable Basis . The platform adds to the community hype by giving Twitter KOL celebrities passive issuance of social tokens that individuals can own and trade with their own Creator Coin. In addition, BitClout has a POW blockchain designed to run social media and a built-in dedicated DEX . BitClout social media platform disclosed a luxurious investment camp including Sequoia Capital, a16z , Coinbase Ventures, and the industry's reputation grew, and subsequently, as several Twitter celebrities claimed BitClout accounts. BitClout's wealth effect increased and pulled away from other blockchain social media projects. After BitClout changed its name to Decentralized Social (DESO) , DeSo is the underlying public chain of BitClout, Bitclout is an application on top of the Deso blockchain.
Chilliz is a social token in the fan economy, focusing on the sports industry. chz is a native pass-through for Socios, a blockchain technology-based sports and entertainment fan incentive platform. socios currently works with 48 clubs or partners including AC Milan, Manchester City, Arsenal, Barcelona, Paris Saint-Germain and Juventus to issue fan tokens. users of socios.com By holding Chiliz, they can purchase club fan tokens. By holding Chiliz, users can purchase club fan tokens and have the right to vote and make decisions in the community. In this community, fans with fan tokens can vote on matters such as the club's jersey colors, stadium music and logo, friendly matches, charity lineups, entrance songs, etc., and the results are binding. Enhanced community participation for users.
Since its inception as a social experiment in September 2020, FWB has grown to nearly 2,000 members, and its community drives the cultural value of Web3. DAO members have launched a token-gate app, a gallery of NFT tools, a Web3 editorial enterprise, a virtual music studio, and a real-time community dashboard, in addition to a series of FWB's next project is FWB Cities , which aims to expand DAO's IRL footprint by partnering with city-specific spaces, communities and experiences to bring real-world benefits to FWB members. community access to Friends with Benefits is reviewed and voted on by a rigorous committee and requires holding a certain number of FWB tokens to represent community membership in the DAO. a16z investment received in October 2021.
3.3Platform Token (Social Platform Tokens).
3.3.1What are the platform tokens?
Platform Token represents the Token of control over the platform . Platform Tokens are primarily designed to facilitate the issuance and management of Tokenized communities by creators. The most iconic social platform token is Rally .The Rally platform can provide the main tool for creating social tokens, and the live gaming site Twitch creates its own social tokens on this platform, mainly for rewarding creators and members on Twitch. The platform encourages non-original crypto traditional media platforms to connect with mainstream audiences by issuing tokens.
3.3.2Platform Token Project
Mirror is a decentralized content publishing platform built on Arweave and founded by Denis Nazarov, a former partner at a16z crypto. mirror starts from a content financialization perspective, providing a platform that gives each article the property of "NFT+Governance", where the content The content can be invested, traded and governed. Creators who meet the requirements can launch crowdfunding under the article, and users can participate in crowdfunding to obtain, NFT share tokens for each transaction of the article NFT linked to investor dividends. In addition, the invitation token WRITE is used to create columns, the holder has the right to vote. mirror's NFT token minting is done with the help ofZora The platform is completed.
RSS3 is a new generation of decentralized social and content protocols that return data, including relationships, content, and portraits, to users through built-in mechanisms for commerce, recommendations, and storage. RSS3 aims to promote efficient and free information delivery, secure and decentralized data storage, and emphasizes inclusiveness, not only for different types of applications, but also for different functional modules, which provides flexibility for its future development. This provides flexibility and feasibility for its future development. RSS3 is a platform-less media, so if for some reason a creator wants to change platforms, they can simply bring their ID and migrate to the new platform, and all their content and followers will follow the migration. together with Mask Network to create SuperFollow Dapplett on Twitter, which will add Patreon functionality on Twitter for all Mask and RSS3 users.
ShowMe is a Web 3.0 NFT subscription social platform that is part of Gryffindor Labs . Creators can attract and accumulate followers through flexible subscriptions that allow users to enter the club, including free, paid, NFT-hold and Token subscriptions. The core functional modules are subscription, NFT membership and NAAS (NFT-as-a-service), and ShowMe first introduced the concept of PONA (Proof of NFT Achievements). All users' actions in the Club are recorded and saved as NFTs. ShowMe hopes to help creators classify and categorize users through a gamified social NFT Achievements proof method, allowing creators to reach precise users through the stratification of information and content.
Fourth, is Socialfi about to explode? When will it explode?
The experience of the exponential growth wave of the Internet and mobile terminals shows that the Internet exploded in the Web 2 era, when every household started to own a computer and generated a series of behavioral data in the forum. In contrast, theEtherNow there are only 180 million addresses. At the current growth rate, which is representative of Web 3 penetration, it will take another 5 years to reach 1 billion users.
The number of users and the non-financial data in the chain are what we need to focus on. Looking back to the Web 2 era, WeChat surpassed MiChat precisely because it reached the network effect in social, and the emergence of social usage scenarios required the massive popularity of new technologies. the explosive growth of Web 2 social media emerged after 1 billion users. the transformation of traditional social self-contained traffic represented by Twitter will have a huge first-mover advantage. Although explosive growth will eventually be achieved, it is still a few years too early. The number of people supporting individual creators to issue tokens and the number of people using the social platform will be further discounted by the limited crypto user base.
The gravitational pull of mass market adoption in the social token ecosystem will begin to explode once a new technology reaches a user base of 1 billion. A social token platform with a strong token economy model that derives value directly from social tokens will have the greatest opportunity to accumulate revenue and value from individual and community token offerings. Social platforms with new public chains gain greater value in this vertical, but returning to the discussion, we currently do not have enough user base to support large-scale social applications, and crypto-natives are already being scaled by users from the inside out.
V. Which direction on the current track of Socialfi is easier to capture the most value?
What a group can accomplish is larger in scale than an individual, and therefore has a correspondingly greater potential for growth. Community tokens are issued based on a certain value support, and they are a reflection of the profitability, popularity, popularity or prestige of the creator. The crypto-economic characteristics can then facilitate the formation of a fan-oriented value discovery market, which is easier to capture than the value native to the Internet community than physical assets on the chain. Until a real-world asset uplink solution is perfected, community tokens may be one of the most promising incremental markets to the real world. Most social tokens, as the social token space grows, are more likely to succeed with tokens that have cash flow or other financial attributes than those that do not explicitly provide revenue to token holders. All three social token categories have the potential to be financially successful as the social token movement continues to grow.
The value added of personal tokens is also incalculable, and the fan economy can give us a glimpse of the possibilities of the personal token economy. While personal tokens may have the greatest percentage growth potential, they are also the riskiest in terms of investment. Personal tokens appreciate in value based on the achievements of their individual creators, so they can be asymmetrically profitable for early investors.
For the earliest users, there will likely be a larger percentage return at the individual or community token level, while distribution and aggregation platforms will yield higher returns. Finally, tools, incubators and some other businesses serving the growing social token trend will create a lot of value. the transition from Web 2.0 to Web 3.0 becomes especially important, whether it is better compatibility with user habits, user experience, content richness, learning costs, and regulatory exploration. Middleware like Mask Network is undoubtedly able to capture some value, and middleware may also bring bright performance in this transition process.
Recommended Articles
Contract Check
Black technology tools
Related posts
