A Comprehensive Interpretation of SocialFi: A Shining Star in the Web3 Era
Original Author: FL Research Team
first level title
1. What is SocialFi?
first level title
secondary title
2.1 People are dissatisfied with Web 2.0 social networks
secondary title
2.2 Some disadvantages of traditional social networking in Web 2.0
The emergence of SocialFi is an inevitable result of fighting against the disadvantages of traditional social platforms. In the Web2 era, traditional social platforms are controlled by major social operators, and operators continue to profit from the underlying social data, while users hardly benefit:
On traditional social platforms, users’ social data is stored on the operator’s server in the form of fields, and the data belongs to the platform; SocialFi relies on blockchain technology, and its non-tamperable data characteristics are more conducive to solving the problem of user data confirmation .
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 users' rights and interests; SocialFi allows users to obtain benefits through the financialization of social influence, and there is no third-party draw by the platform. into the problem.
secondary title
2.3 Social is a necessary component of Metaverse and Web3.0
After nearly 30 years of development, the reason why new hotspots continue to emerge in the social circle is rooted in people’s pursuit of social identity, as evidenced by the development of the world’s social giant Meta (formerly Facebook) with 1.93 billion daily active users. At the beginning of the development of the Internet, the equality and anonymity that appeared due to the opposition to traditional ideas made the Internet an irregular world. The information on the Internet was mixed, and individuals could not feel the real temperature. Meta, on the other hand, introduced the real-name system and distinct personal identity for the first time in the Internet world, making the Internet begin to intersect with the real world and greatly improving people's Internet experience.
first level title
3. Web 3 Token Value
image description
secondary title
text
3.1.1 What are personal tokens?
text
3.1.2 What is the value of personal tokens?
The reason why personal tokens are valuable must be due to the reasonable mechanism of the project. Generally speaking, personal tokens have the following functions:
access right
The opportunity to enter a personal or exclusive community is extremely valuable. Humans are social animals, and they always hope to join like-minded niche groups. This is most evident in the fan economy. For example, fan support clubs that can only be entered after purchasing celebrity tokens/NFT.
economic benefit
Exchanges like Binance, whose platform tokens have revealed the underlying value of discounted tokens. Personal tokens can provide similar discounts on merchandise, events, NFTs, anything sold by creators, brands.
financial reward
text
3.1.3 Personal Token Project
secondary title
3.2 Community tokens:
text
3.2.1 What are community tokens?
Community tokens, similar to individual tokens, have token values that reflect expectations of community value. Communities are generally divided into two categories, one is content community and the other is DAO. The former generally assigns value to the content created in the community, whether it is articles, tweets, pictures, etc., or a certain behavior. The method of granting can be to make it into NFT or to reward tokens. This way to motivate content Generate and consume this content within the community. A typical example is Mirror, which is a decentralized content creation platform similar to Medium. Articles published here can be used as NFTs and can be stored on the chain to achieve decentralized access.
The latter is a management 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 the Discord private server, which gathers a group of creators and thinkers in the encryption field. Its token $FWB has a constant supply of 1 million, and participants need to hold a certain amount of native token $FWB to join this social circle.
text
3.2.2 Community Token Project
RALLY, one of the early well-known social token issuance platforms, is characterized by combining its native governance token RLY with the creator’s social token and minting it into a new personal token. The conversion of personal tokens must pass RLY . The platform covers the entire process of issuance, channels, deposits, and transactions. Rally adopts Layer2 solutions to optimize mechanisms such as instant transactions. Holders of this token have management rights over the Rally Network.
The decentralized social platform BitClout, which is 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 Basis, which was popular before. The platform increases community hype by passively issuing social tokens to Twitter KOL celebrities, and individuals can own and trade their own Creator Coin. In addition, BitClout has a POW blockchain designed for running social media and a built-in dedicated DEX. BitClout’s social media platform disclosed luxury investment camps including Sequoia Capital, a16z, and Coinbase Ventures, which gradually became popular in the industry. Later, as many Twitter celebrities claimed BitClout accounts, BitClout’s wealth effect increased. Blockchain social media projects open the gap. Later, BitClout changed its name to Decentralized Social (DESO). DeSo is the underlying public chain of BitClout, and Bitclout is an application on the Deso blockchain.
Chilliz is a social token under the fan economy, focusing on the sports industry. CHZ is the native token of Socios, a sports entertainment fan incentive platform based on blockchain technology. Socios is currently working with 48 clubs or partners including AC Milan, Manchester City, Arsenal, Barcelona, Paris Saint-Germain and Juventus to issue fan tokens. Socios.com users can purchase club fan tokens by holding Chiliz. Holding fan tokens can have community voting rights, decision-making rights and other rights and interests. In this community, fans with fan tokens can vote on matters such as the club's jersey colour, stadium music and logo, friendly matches, charity lineup, entrance song, etc., and the voting results are binding. Enhanced user community participation.
secondary title
text
3.3.1 What are platform tokens?
text
3.3.2 Platform Token Project
Mirror is a decentralized content publishing platform built on Arweave, created by Denis Nazarov, former partner of a16z crypto. Mirror starts from the perspective of content financialization and provides a platform for each article to have "NFT+governance" attributes, and these contents can be invested, traded and governed. Creators who meet the requirements can initiate crowdfunding under the article, users who participate in crowdfunding can get it, and NFT share tokens. Each transaction of article NFT is linked to investor dividends. In addition, the invitation token WRITE is used to create columns, and holders have voting rights. Mirror's NFT token minting is done with the help of the Zora platform.
RSS3 is a new generation of decentralized social and content protocol, which returns data including relationships, content, and portraits to users through built-in business, recommendation, and storage mechanisms. RSS3 aims to promote efficient and free information transmission, protect data security and decentralize storage, emphasize inclusiveness, not only support different types of applications, but also open to modules with different functions, which provides flexibility and flexibility for its future development feasibility. The protocol distributes hosting index files and content files, allowing users to control their own data in a distributed manner, and decides the right to edit files through key pairs. RSS3 is a platform-less media. If the creator wants to change the platform for some reason, he only needs to bring his own ID and migrate to the new platform, and all content and fans will follow the migration simultaneously. RSS3 will work with Mask Network to create SuperFollow Dapplett on Twitter, which will add Patreon functionality to all Mask and RSS3 users on Twitter.
first level title
4. Is Socialfi about to explode? When will it erupt?
The experience of the exponential growth wave of the Internet and mobile terminals shows that the explosion of the Internet occurred in the Web 2 era. Every family began to own a computer, and a series of behavioral data were generated in forums. In comparison, Ethereum now has only 180 million addresses. According to the current growth rate, as a representative of the penetration rate of Web 3, it will take another 5 years to reach 1 billion users.
The number of users and non-financial data on the chain are the focus of our attention. Looking back at the Web 2 era, WeChat surpassed Michat precisely because of the network effect in social networking, and the emergence of social usage scenarios requires the large-scale popularization of new technologies. The explosive growth of Web 2 social media came after 1 billion users. The transformation of traditional social self-contained traffic represented by Twitter will have a huge first-mover advantage. While explosive growth will eventually happen, it's still a few years away. On the basis of the limited encrypted user base, the number of people who support individual creators to issue tokens and the number of users of social platforms will be further discounted.
first level title
5. Which direction is easier to capture the maximum value on the current track of Socialfi?
What a group can accomplish is larger in scale than an individual, so the potential for growth is correspondingly greater. Community tokens are issued based on a certain value, and they are the embodiment of the creator's profitability, popularity, popularity or reputation. The characteristics of encryption economy can promote the formation of a fan-oriented value discovery market. Compared with the physical chain, this kind of value originally in the Internet community is easier to capture. Before the real asset on-chain solution is perfected, community tokens may become one of the incremental markets with the most potential to connect to the real world. Most social tokens, as the social token space develops, tokens with cash flow or other financial attributes are more likely to succeed than tokens that do not explicitly provide income 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 immeasurable, and the fan economy can let us see the possibility of personal token economy. While individual tokens may have the greatest potential for percentage growth, they are also the riskiest when it comes to investing. Individual tokens appreciate in value based on the achievements of individual creators, so they can be asymmetrically profitable for early investors.
For the earliest users, there may be a large percentage return at the individual or community token level, while the issuance and aggregation platform will receive a higher return. Finally, tools, incubators, and other businesses serving the growing social token trend will create a lot of value. The transition from Web 2.0 to Web 3.0 is particularly important, whether it is user habits, user experience, content richness, learning costs, and regulatory exploration can be better compatible. Middleware like Mask Network can undoubtedly capture certain value, and in this transition process, middleware may also bring outstanding performance.
