By remaining true to the Web3 ethos—basically, just being distributed social applications— SocialFi is poised to cause a major disruption in the social media sector. In particular, it seeks to address critical design challenges associated with the current iteration of Web2 social networks. What makes SocialFi better than its Web2 analog? Now, let’s take a glance at some of the main vital characteristics. That would also provide light on the reason SocialFi has become so widespread.
By using the DAO model, Web3 apps have been able to adhere to a central design concept that calls for the equitable management of rewards among all participants. The next level of innovation is seen in the SocialFi applications, which implement the idea of social coins or in-app value coins.
Decentralized financial infrastructure and game-centric financial infrastructure (GameFi) are two areas where utility tokens are commonly employed to power in-app economies. The introduction of SocialFi’s tokens heralds the beginning of the third economic layer. These tokens may be generated at both the app and the individual user levels. Social tokens allow producers to take financial control of their projects.
A unique token may be issued to any user whose brand is well recognized. As an example, Elon Musk might have his individual coin and accompanying microeconomy. The social standing of the individual will determine the token’s worth. Thus, Elon Musk’s token would be more valuable than a token created by a regular user making their first social network account.
Liberties Of Expression And Regulation
Several Web2 social networking sites have had difficulty in this nuanced and subjective issue area. At the same time that global distribution without any restrictions on potentially hazardous information is not something we want, centralized censoring is not something we would like, either. The middle ground is where the equilibrium lies.
Decentralized filtering, in the shape of on-chain information tagging, is essential to the functioning of SocialFi networks. Everything that is shared to the public feed of a SocialFi network is stored on the blockchain. Consequently, rules algorithms may utilize this on-chain information to swiftly categorize postings according to their subject and the structure of the keywords utilized in them. Every node in the chain must make a decision about which postings to connect to.
Issues Of Digital Possession And Identity
The introduction of PFP NFTs has established a sort of digital identification unlike any other. PFP NFTs are instances of NFT holdings in which members get an emotional interest, like the Bored Ape Yacht Club as well as CryptoPunk.
Owners of these NFTs display them with pride on social media sites like Twitter and also as login images. Some holders of PFP NFTs are only speculators, while for others, these NFTs represent a key part of who they are. By holding one of these NFTs, the owner has a personal relationship with it.Related:
Unlike subjective identity, which is more of a conceptual idea, NFT is intended to serve as evidence of ownership. Customers may verify possession of their NFT simply by linking their account when they establish a SocialFi account and then using their NFT as their avatar picture. Additionally, Bitcoins Code provides access to cryptocurrency that may be used to acquire NFTs.
Networked file transfers (NFTs) inside SocialFi networks also provide producers with promotion and broadcasting options for their work. When an artist releases a new NFT collection, they may distribute some of the profits to those who purchased social tokens from them. This sets up a system of incentives for the artist’s fanbase to promote the NFT collection and, hopefully, boost its sales.
And now, with the press of a button, you can turn that “once-in-a-century event” statement into a non-fungible token. Unfortunately, Web2 platforms don’t have these features and don’t have the right incentives in place to make their implementation of these features easy.