The next outlet? An article to understand how SocialFi subverts social logic

Original title: "I see SocialFi: the subversion of social logic and the next super outlet!" "

Original source: Star Value Investment

The future of Crpyto is bound to be magnificent.

Of course, after the market has been sluggish for such a long time, using this sentence as the beginning is always suspected of "recharging faith". But I think this is not a bad thing. First, some friends really need a firm preacher like me to boost their confidence in currency holdings; second, this is indeed my truest feeling.

However, this is an idea that deviates from the "mainstream voice". The market has been "low and volatile" for a long time. What everyone wants to know is the future market changes and the seemingly very important (but in fact irrelevant) Federal Reserve interest rate meeting. "You said that you want to change the status quo, this is not something within your ability, and it is not even within your ability to know the news in advance and predict the short-term market ----- If you really want to do this, you can probably only It came true in a dream.”

Discussing the conclusion of the "interest rate meeting" is such a boring thing. Even the chairman of the Federal Reserve cannot determine the script. Can you and I arrange the ending? What's more, raising and lowering interest rates cannot stop the torrent of history. The worst ending may be the best ending: the market crashes, and Mr. Market kneels down and offers you cheap bargaining chips.

That's all, the so-called "news" and "economics" are really useless--if they can help us judge the price, it is really useful, but the problem is that they can't.

So generally speaking, in terms of investment, Peter Lynch, one of the best fund managers on Wall Street in the last century, said: Learning history and philosophy is more useful than studying economics. The former (history) allows you to summarize past experience, and the latter (philosophy) allows you to establish the logic of thinking.

This is precisely the most important part of investment, and it is also the core skill that can truly "predict trends". For example, now, I conclude that SocialFi (social finance) must be the next outlet.

1. The secret behind the Crpyto bull market: the wealth creation effect of "inclusiveness"

Whether it is the "public chain market" in 2017, the "DeFi summer" in 2020, or the "NFT collection" and "GameFi" in 2021, looking at several bull markets, although it seems to have different outlets, they are all based on One of the most important conditions arises: participant benefits.

What should I do if I missed DeFi, GameFi, NFTS? Social Finance: The Next "100 Times Coin Pool"! "It is mentioned in the article:

"The trend in 2017 was rumored to be a "public chain bull market", but in fact, the wealth effect of 1C0 on most participants was the hidden line; the DeFi summer in 2020 even changed this clue from the hidden line to As a clear line, COMP's AMM (Liquidity Mining) allows small investors to share the income of institutional market makers, while YFI's aggregate income device and UNI's airdrop income further lower the participation threshold. In 2021, GameFi represented by AIXE and NFTFi represented by Crpytopunks and BAYC actually have the same logic: the former lowers the threshold for participants to make money, while the latter increases participants' income. "

Many people actually don’t realize that at this stage of the Crypto industry, there is no killer product that can change life (solve pain points, facilitate life), change user habits, and then change the world. But the Crypto industry has its characteristics, that is financial.

Note that all features highlighted by Crpyto are future visions. But if you want the industry to develop rapidly, you need to participate in the explosive growth of the number of users. Using tokens to "decentralize" rights and benefits is the biggest feature of the Crpyto industry. After that, once the "participant threshold" is lowered, it will explode.

Of course, if there is only such a model, the final shape will be various ZJ discs and CX discs. Therefore, such a model must be based on the value of the product.

But many practitioners and investors only see technology, but they don't know that the blockchain is open source? Technology is only for the realization of products, rather than emphasizing the technology itself. No one will pay for interesting technology to make boring products --- isn't BCH the best example?

The public chain is also the same problem. What most (public chains) promote and rely on is only staged unique and advanced technologies, but what comes out in the end is only an "Ethereum imitation disk". What's the point of this? Taking advantage of Crypto's powerful financial attributes for product education and user growth is a prerequisite for the start of a bull market.

1C0, DeFi, and GameFi have all done it, and the next one to take over is SocialFi, social finance.

2. The next direction that can achieve "inclusive" wealth creation effect: Social+Fi

DeFi ushered in the financial era last year. The founders of AC and Bitmex mentioned GameFi, NFTFi, and SocialFi. Vitalik also said in a recent interview that if he wants to make a DAPP, he will also choose social media.

As social creatures, socializing is the most essential need of human beings. But we still face a problem, what is the core pain point of social networking? In other words, what kind of problems can decentralized social media solve for us?

This is where history comes in handy. Social communication, the transition from letters to telephones, solved the "space barrier" and "time barrier", allowing the time for information transmission to change from one month to instant; the transition from telephone to the Internet solved the "content barrier" and "cost barrier "; and the transition from QQ to WeChat, and from PC to mobile phone, solved the "mobile barrier" and turned two fixed points into a mobile network.

Now, what kind of problems does decentralized social networking have to solve? Many professionals emphasize "data privacy", but this is just the thinking of "holding a hammer to find a nail". Excited to do a series of social Dapps and social networks, the result? These Dapps either became ghosts or went bankrupt.

User education and privacy value are the biggest concerns. In the web2.0 era, user data is indeed stolen by social software and social platforms, but how many people care about it? To use an inappropriate metaphor, it is "feeling full of warmth and thinking of lust". When most people's wages are only a few hundred or a few thousand, cheapness and convenience are the core demands.

Just let me use voice and voice calls for free, private data? Read my data permission? who care? Ask the 100 friends around you, how many of them will not use WX, TB and other apps because they need to read data permissions?

Decentralized social networking was actually born in the conflict between web2.0 and web3.0. Indeed, data life in the web2.0 era is stolen and manipulated by centralized platforms. The release of data life, anti-censorship, anti-polarization, and anti-algorithm bias emphasized in the web3.0 era are also inevitable.

But this world is a future world, web3.0, metaverse. Of course, we don’t need to do it ourselves for the construction of the new world. We just need to think about one question: how should decentralized social networking that cannot solve the core pain points come? In other words:

Social networking is very important, how do we make money in it?

3. How Web3.0 and Decentralized Social Disruption

The answer is social finance, or financial social networking is more appropriate.

What should I do if I miss DeFi, GameFi, NFTS? Social Finance: The Next "100 Times Coin Pool"! 》I also proposed a concept about decentralized social networking, that is, "value first, then social; first finance, then social".

Value social interaction has already taken shape in the era of web2.0. Similar to Toutiao, NetEase, Baijiahao and other content interaction platforms all put forward the concept of "everyone is a creator", but there is a huge problem here, that is, non-content providers do not get benefits.

The idea of ​​traditional platforms is to provide content creators with benefits, attract users to retain them through content, and monetize through advertisements. In the end, everyone will find that all platforms have become homogeneous competition, and only Toutiao’s algorithm and Bilibili’s community have formed a moat to gain a firm foothold. The remaining platforms, such as Wukong Q&A and Zhihu, Douyu and Panda, etc., without exception, have fallen into a vicious cycle of burning money and robbing authors.

But in this process, a variable appeared, and that was Qutoutiao. Qutoutiao used the "blockchain model" for the first time, and proposed the concept of "user income": watch a video to get gold coins, read an article to get gold coins, and then accumulate gold coins to get benefits.

Relying on the "social mining" model, Qutoutiao has made a living among giants such as Today's Toutiao, Baijiahao, Tencent Platform, UChao, etc., and successfully listed.

It is a pity that Qutoutiao gave "participant benefits", but did not give "participant value". You must know that there will always be an end to financing subsidies. Only by allowing users (readers and creators) to create blood together and generate value liquidity can they find their own position on the content social platform, otherwise it will be a raging fire. The stock price after listing has already explained everything.

To sum it up: "Participant interests" represent explosive power, and "Participant value" represents continuity.

The way to break the decentralized social network is here. Crpyto's unique token can better provide users with economic effects, and the DAO model can allow ordinary readers to participate in content construction and community construction, and obtain more value besides "obtaining content".

In "WEB3.0 Changing the Game Rules: Thin Platforms, Fat Users", I talked about the common problems of WEB2.0 giant platforms:

. For example, if the online car-hailing platform exchanges data with OA SaaS, it knows that you will be fired if you are late again. Therefore, under special circumstances, it will only provide you with the most expensive taxi service and increase the price----you Are you scared?"big data". For example, if the online car-hailing platform exchanges data with OA SaaS, it knows that you will be fired if you are late again. Therefore, under special circumstances, it will only provide you with the most expensive taxi service and increase the price----you Are you scared?

In addition, the significance of the existence of the platform is essentially to eliminate the information asymmetry between buyers and sellers, so as to achieve a "fair transaction" and reduce transaction costs. But once this "two-sided platform" forms a monopoly situation, it will change from an "intermediary" that "matches transactions" to a "middleman". ) the most profitable side. "

What Web3.0 needs to do is:

"Retain the big data advantages brought by the platform, and return the "excess wealth" captured by the centralization to buyers and sellers (users); and pass the governance rights to community users through DAO, digging out the root of the platform's evolution from an intermediary to a middleman. "----- is the so-called "thin platform, fat user".

Using the characteristics of decentralization, minus the interests of the platform side, let "social mining" become a channel for traffic acquisition, and use DAO to deepen users' participation in social networking. Such financial social networking can form the next round of bull market engine.

4. Status Analysis and Opportunities: VC Department VS Community Department

But few decentralized social platforms seem to have achieved this. According to the current mainstream classification method of the social sector, the current social projects can be divided into personal social tokens, platform social tokens, and community tokens. I think these classifications are mostly gimmicks.

What really deserves attention is the war between the VC department and the community department.

DeSo and Rally are representatives of the VC department. DeSo is a star product of the social network. Sequoia Capital and A16Z have invested in it. With a noble VC background, it is destined to become a strong competitor for the leader of the social track. But the biggest problem with DeSo is that DAO is not perfect (DeSo is a project worth studying, I will write a special article next time), this time I will use it as a negative teaching material:

"DeSo emphasizes the creator economy. Under DeSo's system, each user can make their own "creator token", and the price will rise/fall as users buy/sell. The enthusiasm for start-ups is very high. For example, Musk’s personal token was fired to 11.299 million US dollars before he settled in.

But I think this direction is problematic. Because the creator economy emphasized by DeSo is really a boring thing. The traditional social-content platform, whether it is Baijiahao or Toutiao, has the slogan "everyone is a creator", and, for grassroots creators, it is more beneficial to be on a centralized social-content platform .

Why? Because of traffic. Although the centralized social-content platform acts as a "content intermediary" and draws commissions from creators, it will also distribute your content to target users through algorithms, allowing users to create benefits for you.

Not so with decentralized social. The creator token designed by DeSo is only useful for big Vs and celebrities with their own traffic, which reduces the "intermediary fee" of the platform for them. For ordinary creators, there is no traffic without intermediaries, and the income without traffic is zero. Zero multiplied by a percent is zero. "

Rally, which is supported by venture capital giants such as A16Z and Coinbas, also has the same problem. As for WHALE, which is partial to NFT+DAO socialization.

Corresponding to the VC department are the social projects of the community department, the most representative ones are mask and mirror. Strictly speaking, maks is not a purely social project, but a social plug-in. But it is precisely such social plug-ins that greatly reduce the barriers to entry for users by aggregating information sources and DEX.

In August this year, mask also took the lead in establishing a social finance alliance. Participants include LAYER2, trading, prediction markets, developer communities, fiat currency portals, NFTs, communities and media, which is quite a "self-built ecology". But the biggest risk of mask is probably what he is good at. How to get rid of the constraints of FB and Twitter plug-ins and become a real social portal of web3.0?

If you beat it, the market value will be hundreds of billions;

Mirror, another product of the community department, is left at the end because I am the most optimistic. It seems that it is just a content creation platform, and perhaps in the eyes of many people it is just a decentralized version of medium. But mirror provides several key functions that can make social finance explode:

Crowdfunding, auction, cooperative contribution distribution.

From this perspective, Mirror is not just a platform for providing content, but can become a crowdfunding platform, content collaboration platform and even a DAO community. But it is a pity that no tokens were issued. Mirror’s tokens are only airdropped. The initial way to obtain them is to vote, and now the voting is closed....

In addition, the body feeling of mirror is really not good enough. It lacks a directory index for viewing other people's content, no message function, no likes, no rewards-------but these are just technical problems. If the project party keeps updating, it will not If there is a mistake, there is a great possibility that mirror will become the headline of today's decentralization. I suggest that everyone use it more, maybe there will be another airdrop?

All in all, the next step is to look at the community department and VC department. Who would have thought of using the inclusive effect to drive the explosion of user increment. At that time, a new round of bull market will come quietly again, and how much reward will you and I who have planned ahead of time get?

It's exciting to think about it. The Crpyto industry in such an early stage is really magnificent.