Blockchain will be a major component of Web3.0, the next generation of the internet. This means that unlike its predecessor Web 2.0, Web 3.0 will be decentralized. Since its introduction, the internet has been of tremendous help in shaping the world at large.
Particularly, the internet has been behind the current social media phenomenon. The introduction of Web3.0 will cause drastic changes in the overall social networks. The new era promises to give personal sovereignty to users, stripping off power from the existing social giants.
The idea of social media began as people sought to use the Internet to stay connected. However, a decade later, the social media field has risen to so much more. In addition to connectivity, users are now using these systems to voice their views, earn income through content connection and so much more.
There are over 3 billion users globally with over 50 million content creators. However, despite this significant growth, the current social media systems are largely flawed, especially from a user perspective.
Today, most social media platforms are based on Web 2.0 adapting a centralized way of running operations. As a feature, centralization has limited users’ legitimate rights, control over their data, and benefits earned from content created. These networks have also been prone to data scams and uninformed algorithms.
However, things are changing thanks to blockchain, the introduction of Web3.0, and the desire of users to gain back control. These technologies have paved the way for an awakening by providing solutions to the current challenges within the social media systems.
Emergence of SocialFi
Social Finance (SocialFi) is the latest development in the social media marketplace that combines social media platforms, web 3.0, non-fungible tokens (NFTs), and decentralized finance (DeFi). These new social networks have been created to provide rewards and benefits to users through tokenizing social influence. The idea of SocialFi began back in 2017. However, it was not until recently that the idea began gaining traction following users’ better understanding of DeFi.
The buzz around SocialFi has created high expectations among users with communities calling it the ‘new outlet’. Notably, SocialFi is building a completely decentralized and self-consistent economic system.
SocialFi seeks to give users back their control over how they interact with others on the platforms. In the new concept, users own and manage the platform and creative content. This means that gone are the days when the likes of Facebook, Instagram, and Twitter had total control over social interactions.
The current SocialFi system can be classified into three main categories which include personal tokens, platform governance tokens, and community tokens.
According to Messari, personal tokens are those that are created by individual creators, artists, and entrepreneurs. These tokens are intended to allow individuals to create a small following by distributing tokens to their fans.
Community tokens are those that present a community, team, or franchises or personal tokens that become DAOs. These tokens are largely meant for rewarding the community for their participation. Governance tokens on the other hand are released by the social platform. These tokens are used for platform governance.
While it threatens the current power dynamics, SocialFi brings with it numerous advantages to all participants.
First, SocialFi will ensure users’ data rights are protected. The new system will also ensure there is value attribution of content shared on the platforms. This will allow content creators to get incentives from the platforms through popularity indicators such as shares, comments, and likes through the write-to-earn or social to earn concept.
Notably, this new system allows high-quality content creators to earn directly from other users on the platforms. These content creators can receive tokens and other rewards from other users without having to pay for service charges to the platforms.
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SocialFi-based platforms will ensure data protection for their users by harnessing blockchains’ untamperable characteristics. These platforms will also offer transparency of transactions restoring the lost trust between platform owners and users. Data privacy and security have been major concerns following the move by the giant social platforms to sell user personal information for advertisement purposes.
Lastly, content creators will no longer have to worry about content censorship that has seen many lose months of work after platform owners took down their work or closed their accounts. By managing the platforms, communities will be able to decide on which content they want to view and what they do not want on their pages.
Social media indisputably plays a significant part in the current systems. However, as the world moves to full digitalization, a lot of changes will be made. SocialFi is among the many imminent changes.
Many have already taken the bull by the horn to tap into this growing market. Some like Torum have already set their mark with the numbers of new SocialFi growing with each new day. Like its predecessor DeFi and GameFi, SocialFi will surely make its mark in the coming years.
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