Emerging technologies continue to make the world a better place by connecting people with common interests across the globe. The emergence of social media in the 21st century remains a breakthrough for human interactions allowing people to connect, share and build communities.
A new dawn for the social media ecosystem combines decentralization, finance, and social media. Following the rise of decentralized finance (DeFi) and
SocialFi, A new dawn
SocialFi, short for social finance, is a new concept that combines social media, blockchain technology, and Web3. It is a hybrid concept that seeks to fully monetize the current social media market by offering all parties equal opportunities. SocialFi allows various forms of interaction through a decentralized platform while rewarding users through tokenized achievements.
Like its predecessors, SocialFi is built on the principle of decentralization. This has been fundamental in giving users control over their data, freeing them from big central platforms like Facebook, Twitter, and TikTok that have long run the industry. SocialFi platforms offer users a more secure and efficient way to develop, create, and manage content. These platforms also offer users better tools to help them better connect with family, friends, and other users. Users also have power over key decision-making processes on these platforms through decentralized governance represented by decentralized autonomous organizations (DAOs).
Features of SocialFi
As stated earlier, SocialFi is an umbrella that combines various elements to provide a better social experience through crypto, DeFi, metaverse, NFTs, and Web3.
At the heart of SocialFi are
Notably, these tokens are not controlled by the platform but by the creator. Token creators have the power to decide how they want their tokens to be utilized, especially by fans and followers. Simply put, social tokens allow users with meaningful brand equity to begin charging for their creative output. This is because the user's social clout decides the token's value. As a result, influencers and content creators have access to a better revenue stream and better distribution of work. It is worth pointing out that these social tokens are not worth the same.
Another feature is digital ownership and identity primarily facilitated by the emergence of picture-for-proof (PFP) NFTs. PFPs are used mainly by Twitter and NFT profile pictures for identity and proof of ownership. In addition, PFP NFTs also provide users with exclusive access to specific communities within the SocialFi ecosystem.
SocialFi also advocates for freedom of speech since users' messages or content are not throttled by censorship. Previously, social media platforms were heavily plagued by centralized censorship that limited what users could post to the extent of deleting accounts that content creators and users had poured their hearts and souls into. But with SocialFi, users have the freedom to post content without the constant fear of overreaching moderation or targeted censorship.
SocialFi also features DAOs schemes that prevent a single entity from having total control of the platform. These DAOs provide users with voting power on crucial processes on the platform.
Last remarks
SocialFi is still developing and faces various challenges, including scalable infrastructure, Sharding and Warp Sync, and a sustainable economic model. However, this concept still has much potential for a more defined economic model for social engagements.