The rise of Decentralized Finance (DeFi) and Web3 has led to the emergence of new decentralized projects, including SocialFi and GameFi. While GameFi has gained traction among users with Axie Infinity, SocialFi is just starting to attract attention. SocialFi aims to offer users benefits, enabling them to earn billions instead of market monopolists. This article discusses the development of SocialFi, the most popular platforms, and the challenges it faces.
Stimulating the Development of SocialFi
SocialFi has emerged due to users’ desire for benefits, the fight for privacy, and the need to integrate financial technologies into social media. The concept aims to reverse the trend of social networks generating billions of dollars in advertising revenue for market monopolists. It allows content creators to monetize their content and data, enabling them to become “owners” rather than “workers.” SocialFi also addresses privacy concerns following high-profile scandals like Cambridge Analytica on Facebook. As social media corporations try to correct their mistakes, people are increasingly cautious.
Token as a Systemically Important Element
Personal tokens and community tokens are two types of tokens issued to build a more direct and close connection between content creators and their fans. Rally allows creators to generate and issue their Creator Coin tokens to followers, offering them membership privileges such as access to the creator’s private community or purchasing VIP merchandise. Projects such as Chilliz, Zora, Circles UBI, and Loop Finance manage communities using tokens. Users can be divided into tiers and enjoy appropriate rights and opportunities according to their activity and contribution.
The Most Popular SocialFi Platforms and Decentralized Social Networks
Several SocialFi platforms and decentralized social networks are available, including DeSo, Mousai, Diamond, Entre, and Torum. DeSo is a first-level blockchain built to scale SocialFi applications that can serve one billion users. Participants can monetize their data, manage it freely, and not worry about privacy and security. Mousai rethinks the monetization of streaming video or audio content, allowing users to support authors financially, earn money on tips and NFTs, and even create their own coins.
Diamond is a relatively new member of the SocialFi club, positioned as a new version of Twitter, where users can own content and receive rewards for any post or interaction. Entre is a decentralized professional community by Web3 that offers introductions to artificial intelligence, partner matchmaking, meetings, live broadcasts, allows users to receive rewards for activity, and much more. Torum aims to unite crypto users and communities on a global scale and has established itself as a revolutionary metaverse SocialFi ecosystem.
Challenges Faced by SocialFi Concept
Infrastructure scalability and a sustainable economic model are the most challenging aspects of SocialFi. Whether it’s GameFi or SocialFi, there are many platforms that promise high incentives for their participants, but these incentives have so far proven to be short-term “growth hacks.” SocialFi’s benefits are being experimentally tested on a small scale and need to be stress-tested through several market cycles and black swan events before they become mainstream. DeSo claims that it can scale better than most existing first-level chains, but the project’s economic model needs to be tested to be sustainable.
SocialFi is a new frontier of decentralized social media that aims to offer users benefits by reversing the trend of social networks generating billions of dollars in advertising revenue for market monopolists. The most popular platforms include DeSo, Mousai, Diamond, Entre, and Torum. However, SocialFi’s development faces several challenges, including infrastructure scalability and a sustainable economic model, which need to be addressed. Despite these challenges, SocialFi’s emergence and its potential to disrupt social media are fascinating developments