A comprehensive interpretation of the SocialFi track: what projects are worth paying attention to?
Summary
Summary
Finance, entertainment, and social networking are all tracks with huge money-making effects in web2. Defi Summer in 2020 will detonate a round of bull market, and GameFi in 2021 will also make the market even hotter. With the success of DeFi and GameFi, web3 entrepreneurs will naturally think of SocialFi, capital also smells the social potential in web3, and keeps betting on this track. However, SocialFi is still in a very early stage, and there are problems such as insufficient infrastructure, bottlenecks in user growth, and insufficient user stickiness. With the help of several representative projects, this article simply sorts out the current development of SocialFi, hoping to find ways to tap potential SocialFi projects.
SocialFi, as the name suggests, is social + finance, allowing users to earn Token through social behavior. The narrative of monetary incentives and data ownership can easily attract the attention of web3 users to the SocialFi track. So is SocialFi simply moving social networks to the blockchain?
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1. SocialFi Infrastructure
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Figure 1 Twitter homepage of ceramic network
Ceramic Network is a decentralized data network that provides computation, state transition and consensus for all types of data structures stored on decentralized networks. Ceramic Ceramic Network is a decentralized data network that provides computation, state transition and consensus for all types of data structures stored on decentralized networks. Ceramic provides an appropriate framework for dynamic, decentralized content through stream processing, enabling developers to build with dynamic information without a trusted database server. With the Data Stream Network, information streams and changing files can be stored directly on the decentralized network and updates shared with anyone in the world. Realized the transformation of static data (such as data on Filecoin or arweave) into dynamic data.
It is worth mentioning that Ceramic realizes cross-application data composability through a new abstraction called data model, similar to data Lego. Through this abstract data model, the storage methods of similar applications are unified, and the status of each user on the network can be retrieved. For example, decentralized Twitter could run on several shared data models: one for users' tweets, one for the social graph, one for private messages, and so on. By adopting the same underlying data model, applications can natively interoperate on the same data.
Figure 2 Ceramic mesh function
Financing information: On February 16, 2002, 3Box Lab, the key capital of Ceramic, announced the completion of a $30 million financing, led by Multicoin Capital and Union Squares Financing information: On February 16, 2022, 3Box Labs, the core developer of Ceramic, announced the completion $30 million Series A round led by Multicoin Capital and Union Square Ventures. Including the 2.5 million in the seed round, a total of $32.5 million has been raised.
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2. SocialFi social graph
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Figure 3 CyberConnect Twitter home page
CyberConnect is a decentralized social graph protocol that helps Dapp guide network effects and build personalized social experiences by building web3 social graph infrastructure. With CyberConnect, users can use their digital assets, on-chain identities, and social graphs to roam among different Dapps and games on Web 3.0 without giving up control to any centralized party.
The CyberConnect protocol is publicly accessible, allowing Dapps developers to leverage user connections to extend their existing user base with additional functionality, but only users have full control (adding, removing, and updating connections) over their own social graph. Rather than being bound to a single blockchain, the protocol supports connections from all blockchains. And the project adopts decentralized governance and Token incentive model, and its Token is CYBER.
CyberConnect uses a tamper-resistant data structure, and each piece of user-centric data is represented as a data stream, and only the data owner is allowed to update. CyberConnect has partnered with Ceramic to deliver the first release, using Ceramic's variable data stream storage system. Ceramic's blockchain anchor and CyberConnect's custom data fixation services guarantee long-term data retention. Design a user-centered user table, put all social graph information in a user table, and only parties who have obtained the decryption key can read the encrypted data. CyberConnect's social graph data is stored as a one-sided connection, and only the follower list is stored in the user table.
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Figure 4 Link to the Twitter home page
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Financing status:
Financing status:
The $10 million seed round was co-led by Multicoin Capital and Sky9 Capital, with participation from Animoca Brands, Draper Dragon, Hashed, Zoo Capital, Smrti Lab, and Mask Network.
The $15 million Series A round was co-led by Animoca Brands and Sky9 Capital, with participation from Delphi Digital, Protocol Labs, IOSG Ventures, Tribe Capital, GGV Capital, Spartan Group, Amber Group, Polygon Studios, and SevenX Ventures.
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3. SocialFi Social Credentials
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Figure 6 Galxe Twitter home page
Currently, the most well-known voucher project is Galxe (formerly known as Project Galaxy). There are a lot of cooperation projects in it, and they have released their own tasks, and the address of completing the task can get NFT or OAT. The tasks of these projects may be to follow retweets, join Discord, interact on the chain, learn to use applications, or other custom tasks of the project party. The project party can flexibly choose the type of activity and adjust the difficulty of the task according to its own needs.
The success of Galxe at the current stage lies in meeting the needs of users, project parties, and platforms: users get NFT and even Token airdrops, event project parties get publicity and user education, and platform parties also get profits and user growth.
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Figure 7 Galaxy Passport
However, this approach has caused a lot of controversy. Binding offline identities with online wallets may violate the anonymity requirements of the web3 world, and there are risks of loss and fraudulent use, and centralized collection of KYC and web3 users Data autonomy is contradicted.
Financing: $10 million in financing completed in January 2022, led by Multicoin Capital and Dragonfly Capital, Spartan Group, Sky9 Capital, Coinbase Ventures, Binance Smart Chain Growth Fund, C-Squared Ventures, Lattice Capital, Mirana Ventures, Folius Ventures , Solana Ventures, Jump Capital, Alameda Research and others participated in the investment. On February 17, 2022, a public sale of 10 million GAL was conducted on CoinList at a unit price of $1.5.
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3. SocialFi's decentralized communication
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Figure 8 Satellit IM Twitter home page
Satellite IM is a decentralized peer-to-peer communication platform that protects data privacy. Users can sign, encrypt, broadcast, search and store documents or messages through secure authentication without worrying about losing the data.
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Figure 9 Satellite IM interface
Satellite IM is currently in early access, and its mobile-native app, Uplink, is scheduled for release in fall 2022.
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Figure 10 Debox Twitter home page
DeBox is a DID-based community management tool that provides many useful community-oriented functions, and the application interface looks very similar to WeChat. The more eye-catching function is that when a user holds a certain Token, he can join the DAO of the project corresponding to the Token. After entering the community, he will be able to see the user's position ranking based on DID, and when the user sells or transfers the Token After that, it will automatically exit the community (DAO). Since the users in the community are all Token holders, the credibility of the information is increased. The group chat also contains commonly used community management tools, including proposals, voting, finance, capital management, transactions, lottery, contract tools, etc. Debox also launched a pop-up room + voice service function, similar to Twitter's space, which enriches the chat function and helps the community to attract traffic.
The project plans to gather the first batch of seed users, OG users, through NFT. Then use the practicability of community management tools to attract more communities and KOLs to settle in. In the first phase of the project, 10,000 guardian NFTs, a cute little penguin, were released. The functions of this NFT include:
DEBOX in-depth governance and PFP exclusive identity; enjoy airdrops from DeBox and other project parties; enjoy investment income from the DeBox Foundation; unlock advanced features such as DeBox flash rooms;
The second phase of Guardian Eagle NFT will also be released soon. The functions of NFT include:
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Figure 11 Economic Model of Debox
Project Token DBX, with a total issuance of 1 billion, of which the foundation: 55%. Unlocked linearly over four years. It is used to incubate DeBox ecological projects, and the proceeds of the foundation belong to all DeBox Guardians Pass holders and all unlocked DBX holders.
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4. SocialFi content distribution
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Figure 12 BBS Network Twitter homepage
BBS Network is going to be a decentralized Reddit, which supports content sharing and rewards creators, curators and other stakeholders with its own native Token. Anyone can create a BBS on any topic and run it on their own domain (eg, member@bbs.domain.com). Each post is effectively an NFT that users can create, buy, sell, and collect revenue from the ad space on posts they own. Revenue generated by the platform is shared among all BBS ecosystem participants in a fully automated, transparent and market-driven manner, advertising revenue is automatically distributed to post publishers, content curators and moderators, financially rewarding making Contributing members and encourage healthy community togetherness.
BBS Network utilizes predictive models that enable community members to promote posts by leveraging the reputation they have gained from participating in the BBS and accurately predicting post visits. When promoting a post, users must use the reputation they have earned to predict how many visits the post will get. Accurate predictions gain more reputation, and inaccurate predictions lose reputation. Using predictions of posts to determine potential popularity within a community, providing a unique and manipulation-resistant approach to content curation. In addition, BBS Network also conducts fraud detection through DAO.
The native governance token of BBS Network is BBS, which is used for advertising fee payment and earning income, of which 50% of BBS are used as mining rewards, and 20% are used for liquidity provision and pledge rewards.
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Figure 13 BBS network interface
Financing information: On December 7, 2021, Binance Labs led a $1.5 million seed round of financing, with participation from DCG (Digital Currency Group), Polychain Capital GPs, Node Capital, NFX, and DAO Maker.
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5. Write at the end
In short, socialfi is currently in its early stages, and there are many problems whether it is the construction of infrastructure or the number of users and user stickiness. For social networks, there needs to be a process from quantitative change to qualitative change. When the scale of users grows to a critical point of explosion, the network effect will occur. Although one of the great benefits of web3 applications is that the addition of financial attributes can reduce the difficulty of cold start of the project and give users a reason to enter, but it also brings side effects: the survival time of the project is short. Due to the bottleneck in the growth of the number of users, as early participants leave the market for arbitrage, the profit-making effect of latecomers will gradually decrease, the popularity of the project will gradually ebb, and there is a possibility of entering a death spiral. Web3 entrepreneurs are also well aware of the harm brought by this Ponzi attribute, and they are racking their brains to design various complex economic models to prolong the survival time of the project and accumulate users in a healthier way.
For a SocialFi project to be sustainable, it needs people who are really willing to pay for the user's social behavior, rather than just relying on latecomers to pay. However, because the number of users of web3 is more than an order of magnitude lower than that of web2, advertisers are currently not willing to place advertisements in web3, and the way of paying for knowledge faces the problem of lack of high-quality content. Some SocialFi projects that were very popular in the early stage also fell silent, such as Monaco.
Socialfi is built on a decentralized network. Privacy and security requirements will inevitably limit the development of application availability. This also requires developers to make some trade-offs. How to make users willing to endure gas fees and interactions for data autonomy and security Efficiency is an issue worthy of study.
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