A Quick Look at SocialFi
Last updated
Last updated
SocialFi, refers to social finance. From a literal analysis of the definition, it can be considered as a combination of Social+Fiance, or even Social+DeFi, which essentially refers to the organic combination of social and financial on the blockchain. SocialFi is characterized by decentralization, openness and user control
In the first half of 2021, the social DAO Friends with Benefits started , and as of the beginning of September, the financing of 10 million US dollars was completed at a valuation of 100 million US dollars. Footprint Analytics data shows that the token FWB price has soared from US $ 17.69 to 190.69, an increase of 977%; in October, it was invested by a16z again.
Footprint Analytics:Price of FWB(from January 2021)
On November 4th, the SocialFi platform Torum was invested by Kucoin Labs Fund; on the 28th, the Monaco Beta version of the SocialF project invested by Three Arrows Capital was launched and detonated the community, and the platform access invitation code was fired for more than 100 US dollars.
This article will take you to understand ScoialFi from the following four perspectives:
1.Concept of SocialFi
2.What problem does SocialFi solve
3.SocialFi representative projects and data performance
4.Opportunities and Challenges of SocialFi
SocialFi, refers to social finance. From a literal analysis of the definition, it can be considered as a combination of Social+Fiance, or even Social+DeFi, which essentially refers to the organic combination of social and financial on the blockchain. SocialFi is characterized by decentralization, openness and user control.
In the era of Web 2.0, the data of social users is controlled by major social operators, such as Meta (formerly Facebook), WeChat and Twitter. And operators continue to make profits by using these underlying social data, while users have little profit. SocialFi addresses some of the drawbacks of traditional social networking:
Attribution of data rights
In traditional social platforms, the user's social data is stored on the operator's server in the form of fields, and the data belongs to the platform; SocialFi relies on blockchain technology, and the immutable data characteristics are of great help in solving the problem of user data right confirmation. helpful.
Distribution of benefits
Under the algorithm mechanism of traditional social platforms, there is an unbalanced distribution of interests between users and platforms in terms of traffic realization, which is not conducive to protecting users' rights and interests; SocialFi is a way for users to obtain benefits by financializing their social influence. There is no problem of third-party commissions such as platforms.
privacy security issues
The registration of all accounts in traditional social media requires the user's real identity information, and the information stored in the operator's backend is easily leaked; SocialFi is based on blockchain technology, and the anonymous nature of user identity information is helpful for the protection of privacy and security.
At present, SocialFi projects mostly focus on token issuance, that is, the core value of SocialFi lies in Social Token. According to different Token types, it is divided into Personal Tokens, Community Tokens, and Social Platform Tokens, each of which has representative projects.
Personal Tokens: RALLY
RALLY, an early well-known personal token issuance platform, focuses on reconstructing the relationship between creators and fans.
Creators can generate and issue their own personal tokens, Creator Coin, or directly mint NFTs on RALLY for trading. Creator Coin, as a qualification certificate, can enjoy corresponding privileges, such as entering the creator's private Discoard community, purchasing specific products, etc.
RLY, the native governance token of the RALLY platform, can be used to purchase Creator Coin or exchanged with any other token on Ethereum. The public sale time is April 1-3, 2021, and peaks at $1.38 on April 3. Currently, RLY can conduct liquidity mining on Uniswap and Balancer.
Analytics: Price of RLY (from January 2021)
Fans interact with creators by purchasing Creator Coins held by creators through RLY, expressing their loyalty and shortening the distance between them and celebrities. When the participation of both parties is relatively high, RALLY will issue RLY as an incentive to distribute to creators and fans.
Community Tokens:
mirror.xyz
Mirror.xyz, a content publishing platform focusing on articles + NFT, each article (Entry) published can be in the form of plain text content, or embedded in pictures, videos, and NFT content. Published articles are permanently saved on Arweave, and NFTs are automatically generated for trading when published. The platform currently supports functions such as publishing articles, crowdfunding, community voting, and auctions, and there is currently no token trading and circulation.
Friends with Benefits:
Friends with Beneefits is a new type of DAO whose native token is FWB. Originally established as a token-gated Discord server, it has now grown into a Web 3.0 digital city, attracting about 2,000 members. Invested by a16z with mentoring support. Modules such as token-gated events app, NFT gallery, editorial venture based on Web3.0, virtual music studio, real-time community dashboard, etc. have been launched. Next steps focus on expanding the DAO’s real-life reach, working with communities in specific cities to bring real-world benefits to FWB members.
Social PlatformTokens: Aduius
Audius, a decentralized music streaming protocol, focuses on transactions between musicians and listeners. It is mainly aimed at improving the traditional musicians' income and the company's platform share, subject to platform rules, long monetization cycle, unstable platform and weak link between audiences.
The platform's native governance token is AUDIO, which can be used for mortgage, lock-up and community governance. It has been launched on Binance UniSwap and FTX. Footprint Analytics data shows its price peaked at $4.03 on March 28 this year. It is worth mentioning that in August, Audius announced that the service was integrated on TikTok, and the price rose from $1.61 to $3.33, an increase of 106%.
Footprint Analytics: Price of AUDIO (from January 2021)
How to socialize in the era of Web3.0 is a proposition that must be considered. The user group expects a new social method to adapt to the metaverse and solve the shortcomings of traditional social interaction.
There are also many challenges in the development of SocialFi. To become a star track in the Metaverse, two problems need to be solved:
The problem of influence monopoly: SocialFi is essentially a manifestation of personal value, which is intuitively expressed in the form of money. This will expand their monopoly on content creation to a certain extent for celebrities who enter this track early or have a very large influence, which is very unfavorable for ordinary users who enter the market late or have less influence. The content they produce is often difficult to discover.
The value capture model needs to be improved: SocialFi currently has two main ways for users to obtain benefits. One is waiting for rewards for creating content. This depends on the will of the appreciator, commonly known as watching the hearts of the officials. The second is Write to Eran, which has higher requirements on the algorithm mechanism, and the platform side’s design will be overturned if it is unreasonably designed, such as Monaco Planet.
The future of SocialFi has come. Now that the concept of the metaverse is still in the development stage, the potential of SocialFi is already being demonstrated. When the system of the future metaverse is gradually built and perfected, SocialFi may set off a new wave, let us look forward to it.
From DeFi, to , blockchain technology seeks to be applied, and new outlets are constantly emerging. At the moment when web2.0 turns to Web3.0, SocialFi may become the next outlet.
