Social interaction is an indispensable part of our current lives. If all our activities are moved online in the future, what new form of social interaction in the meta-universe will take place?
A recently exposed Facebook internal email described the future meta-universe world. In the e-mail, a virtual user named “Priya” can interact and cooperate with other people in the meta-universe, and even interact with a green ” The ogre” got married. It is conceivable that the meta-universe not only maps the complex relationship network of the real society, but each individual in it can also set and freely decompose his virtual identity, completely get rid of the solidified social roles and social division of labor in the industrial age, and form a more diversified society. , Interesting relationships and communities. In such a world, more imaginative social tools are inevitably required.
Compared with application scenarios such as games and finance, social networking may be a lower-level demand. It has a wider radiation area, is closer to the daily life of ordinary people, and is used more frequently. It is a blue ocean in the crypto market. The current encryption industry has made many attempts and explorations on social interaction, and used blockchain technology to integrate social needs and economic incentives, creating a new species of SocialFi, which enables the influence of individuals and communities to be realized into actual value.
So, what imagination does SocialFi inject into meta-universe social networking? How does social create value? Is SocialFi likely to be the next outlet?
How does social create value?
SocialFi=Social+DeFi, that is, socialized finance. It tokenizes, financializes, and DeFi social influence, so that everyone can gain benefits by demonstrating their own value.
In the traditional Internet era, UGC platforms such as Twitter and Weibo transfer the cost of information and content production to users. While obtaining massive amounts of content for free, they also bring considerable traffic to the website itself. The users themselves become the “digital laborers” of these websites, contributing a lot of time and energy to the platform but unable to obtain actual benefits.
SocialFi solves this problem. It turns users from “workers” to “masters”. It is also a manifestation of “returning data sovereignty to users” in the core attributes of the blockchain. SocialFi empowers each user’s creative content and social influence, helps users realize their personal value, and shares platform traffic and revenue.
It can be seen that SocialFi creatively combines the unique financial attributes of the blockchain to further realize value transfer based on the realization of information transfer. As more individuals benefit from such a self-consistent economic system, the value ecology of SocialFi will also further develop and expand, gradually establishing a more imaginative and complete ecology of influential communities and creators’ economy.
However, can personal or community influence really create value? How can social interaction be combined with finance?
In some instances, the value of social interaction has been confirmed. For example, Tesla CEO Elon Musk’s multiple Twitter updates directly made Dogecoin become the top ten digital asset in the world by market capitalization this year, and the “Musk effect” influences multiple numbers including Dogecoin. Asset prices fully prove the huge role of personal influence.
For another example, various meme coins based on the grassroots culture of the Internet have gained attention through the establishment and dissemination of community culture, and their market conditions are directly influenced by the community. It can be seen that the power of individuals and communities can create a huge wealth effect, and how to use these powers is the goal of SocialFi.
The theory of social capital believes that the network of relationships creates a valuable resource, and individuals can use their special position in the network to obtain benefits. Therefore, social capital and economic capital can be transformed into each other to a limited extent. For example, some KOLs (Key Opinion Leaders) are at the connection point of different organizations. They have poor information and control the flow of information, so it is easier to obtain benefits.
Through blockchain technology, the abstract process of transforming social capital into economic capital has been concretized, becoming a more visible token issuance and circulation, and more new ways of wealth accumulation have been derived.
What imagination does SocialFi inject into social networking?
Since the beginning of this year, more and more new concepts and projects have emerged on the SocialFi track. As of December 2, coingecko data shows that the market value of the Social Money section has reached 1.44 billion U.S. dollars. However, SocialFi is still in the early stages of development, and most of the projects are based on social tokens for further divergence of concepts and technical iterations. The following will introduce the two development directions of SocialFi. Only some projects with greater influence or innovation are selected. It is not an exhaustive list of the entire SocialFi ecosystem.
(1) Social tokens
A social token is a token supported by a personal reputation, brand or community. It is built on the premise that the value of the community will continue to increase. Among them, token casting and distribution, and content capitalization are more mainstream project concepts. Representative projects include Chilliz, Zora, CircleUBI, Loopss, etc.
This type of project manages the community through tokens, can divide the hierarchy according to the activity and contribution of users in the community, and enjoy the rights of tokenization, and increase revenue for network celebrities, cultural producers, and related participants. Some projects are already in music A complete new-type creator economy has been established in fields such as, text, etc. Similarly, there are some developer fund projects, such as Gitcoin, which motivates developers to help each other and share benefits by tokenizing the open source collaboration mechanism.
Communities established through social tokens are also active in the investment field. Such communities can aggregate funds, seek and discover investment opportunities through voting mechanisms and smart contracts. Taking Flamingo as an example, its community members have the right to jointly decide which NFT artworks to invest in, and they can split the purchased NFT, borrow, curate, or use it as collateral on other DeFi platforms.
At present, many auxiliary tools and related projects surrounding social tokens are also being implemented, such as decentralized social token trading platform DAOFi, community data evaluation and reward tool SourceCred, community currency activity management platform Kickback, reward management robot Tip.cc, etc. , Is shaping the social token ecology from multiple dimensions.
(2) Decentralized social platform
Many projects in this field try to benchmark the large-scale social platforms in the current traditional Internet, introducing a token mechanism to allow users to gain control of the platform. For example, BitClout, the project has received investment from major institutions including Sequoia Capital, a16z, and Coinbase Ventures, and many Twitter celebrities have entered this community and gained fame in the industry.
There are also many projects that focus on their own niche markets, such as DeSo trying to build an open data social network, and Follow focusing on community relations under NFT digital art. Many facilities of the current decentralized social platform are not yet complete, so some applications have taken a new approach, starting with basic components and frequently used functions to enter the market. For example, a recent application called Context cuts into the social scene from the NFT data tracking function. middle.
Another type of project is a Web3.0 portal tool that encourages non-encrypted native media platforms to connect mainstream audiences by issuing social tokens, helping platforms and users to seamlessly transition from Web2.0 to Web3.0. Some projects in this field have achieved more decentralized product form innovation. They do not aggregate information from other platforms and users to themselves like traditional Internet platforms, but become a plug-in to make their own products. The logic is entrusted to various other products. Such a product form may gain more usage scenarios and users, while at the same time highlighting its service attributes to a greater extent, rather than allowing users to unconditionally transfer their data sovereignty.
Will SocialFi be the next frontier?
After DeFi Summer last year, hot spots such as NFTFi and GameFi have exploded. One trend that can be seen is that “Fi” remains unchanged, but with the change of prefixes, more subdivision tracks have been extended. In other words, as the user base continues to expand, the development of the blockchain industry is evolving in the direction of “local diversification”, but it has always been anchored on the fundamental issue of “how to use digital assets to create more economic value” . According to this logic, will SocialFi be the next outlet?
SocialFi conforms to the financial attributes of the blockchain technology itself. Its core is to make social monetization. This is nothing new. There are already many practices in our current Internet, which can be summarized in three ways: product monetization, advertising monetization, Services are monetized, but these three methods have some problems.
Let’s look at product realization first. Whether it is an online celebrity product or a friend circle micro-business, it is necessary to cultivate potential consumers through social scenes, and promote products through the establishment of relationships and trust. But there are times when this approach fails. In some scenarios, social networking and marketing seem to be incompatible, and even marketing behavior is the destruction of relationships. This is more obvious in micro-businesses that pay more attention to interpersonal relationships. Many people avoid or even hate the marketing messages in the circle of friends.
The essence of advertising monetization is to sell the attention of the people covered by it to advertisers. This approach also faces the problem of incompatibility between content and marketing, and social and marketing.
Finally, the service is monetized. The typical methods are live broadcast rewards and content payment, and creators benefit from the continuous output of high-quality content. The problem with this model is that the platform masters the content distribution process and assigns the traffic weights of different creators, so that many excellent works are buried by algorithmic bias. In addition, the platform will draw a lot of money, which greatly reduces the actual income of creators. On the other hand, information on the traditional Internet can be copied infinitely and flowed freely, but there is no effective mechanism to guarantee the transmission of its value. This further causes the income problem of creators and normalizes copyright disputes.
SocialFi’s solution to the above problems can be said to be a comprehensive innovation.
In response to the problem of product monetization and advertising monetization, SocialFi has established a new influence economy, effectively establishing a value communication channel for online celebrities and fans. Internet celebrities can mint and issue personal tokens through projects such as Rally, and their popularity on social networks will directly affect the value of the tokens; fans share the benefits with celebrities by holding tokens. The money, time and emotion they pay are all It can achieve value conversion to the greatest extent, instead of falling into the hands of some commercial organizations. In this case, Internet celebrities do not have to rely solely on products or advertisements to overdraft their popularity, and their income is more sustainable.
In response to the problem of monetization of services, SocialFi has established a new creator economy, which has achieved a revolution in the way creators and fans interact. Its basic model lies in: using NFT to tokenize the ownership of digital content, through fan crowdfunding and copyright distribution, to form a closed loop of content-based production, investment, transfer, and consumption; on the other hand, the crowd gathered around the content forms a temporary DAO, collaborative decentralized content production, this loose, heterogeneous connection makes creation more dynamic.
It can be seen that SocialFi’s economic model is not only the establishment of a community of “consumption” by using the community as a service object or marketing object, but also the value of the fan community, and the power of members to carry out co-creation or business activities. The community becomes a kind of “production” community.
However, there are also opinions that what SocialFi does is just icing on the cake, which is very different from DeFi. DeFi’s series of decentralized mechanisms have solved some pain points and even fatal problems in the traditional financial field, but the social field does not face these problems, so the development of SocialFi may not be as rapid as DeFi.
The development of SocialFi has just begun, and the opinions of various parties have not yet been integrated. Whether it will become an outlet or not, investors need to judge by themselves. We have conducted an inventory of the mainstream SocialFi classification methods and representative projects on the market, as well as the tokens of 5 mainstream SocialFi concept projects. Welcome to join the official community of Ouyi (WeChat ID: OK565611) and participate in the group. Discuss within.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/social-creates-value-will-socialfi-be-the-next-trend/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.