The Advent of SocialFi
A Look at some of the Emerging Trends in the SocialFi Space
The social media industry is still ‘nascent’ by many standards — yet the impact it’s had on society is undeniable. Over half the population on the planet spends an average of 2 hours daily on social media platforms — it has completely shifted the ways in which we communicate and live. For better or for worse — it has brought about a permanent cultural change and has rewired our brains.
The space is currently dominated by big web2 players including Meta(Facebook/Instagram), Twitter, Tencent, etc. In a sense, the industry is monopolized, leading to features which are not always in the best interest of users. However, we may be seeing a possible challenge to the status quo in the industry — with SocialFi.
What is SocialFi ?
SocialFi combines principles of social media and DeFi. Some of its key benefits include — it cannot be censored, and key contributors can be awarded directly through tokens.
Also, payment / tip processing would be much smoother, faster and much cheaper as no third party payment processor (such as Paypal) would be required. Additionally, governance can be decentralized by means of a DAO (Decentralized Autonomous Organization) — which requires the majority of users to agree on a new proposition before it can be implemented.This is in contrast to platforms like Twitter, where the algorithms can be changed by the management.
A SocialFi platform will not only be able to showcase users’ NFTs (such as Twitter’s implementation) but make the process much more seamless and feature rich than any Web2 platform can.
SocialFi Trends in Social Media
📌 NFTs are Becoming more Accessible to Masses
Some web3 application makers are creating ecosystems to bridge web2 and web3 — in the pursuit of bringing more web3 dApps to Web2 platforms. For example , Mask Network aims to “bring privacy and benefits from Web3 to social media like Facebook & Twitter — with an open-sourced browser extension”. Using something like this, content creators and NFT collectors will not need two separate accounts- one for NFT marketplace and one for a social media platform.
📌 NFT Profile Pictures are taking off
Image source: OpenSea
NFTs are being used as profile pictures or “Avatars” to represent users’ identity online, both in the metaverse/crypto platforms as well as in Social Media. For example, Twitter Blue enables a user to verify an NFT and then use it as their profile picture. Many other social media platforms are following suit.
📌 Direct buying/selling on Social Media platforms
Platforms like Facebook and Google are slowly introducing DeFi apps to enable a next-gen personal finance experience for users. Users will be able to trade, make payments, participate in public offerings, all within a single social media app.