SocialFi // Decentralization // Monetization // Censorship // DAO
Published on Jul 02, 2024
What Is SocialFi? - Crypto’s Social Media Gamble or the Future of Monetization for Creators?
Web3 has a new brainchild and it wants to monetize even your double-taps. Here’s what you should know about SocialFi platforms.
TL;DR
You interact on social media and SocialFi monetizes your interactions. Simple, right? Okay, it’s a little more nuanced than that:
1. SocialFi combines social media and DeFi, aiming to provide a decentralized approach to social media and creator monetization.
2. It seeks to empower content creators, influencers, and participants by giving them control over their data and freedom of speech.
3. SocialFi is better suited to prevent censorship decisions.
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In the ever-evolving world of….. Wait, wait, wait!
If you’re reading this on your phone, pause for a moment, open Settings > Screen Time, and tell me in the comments how much time you spent on your social media yesterday. I’ll tell you mine — it’s 2 hours and 36 minutes — 9 minutes higher than half of all smartphone users on average. Yet only a fraction of this attention, interactions, and overall engagement get incentivized to content creators — while the entirety of this data gets monetized by centralized social media platforms.
If your office address is 1 Hacker Way, Menlo Park, just don’t read further. This disproportionate incentivization has already led to the outliner, “If the product is free, you are the product.” Apart from obvious moderation and hollow content ownership pipelines, monopolistic platforms — from time to time — have failed to deliver a fair creator payout. And that’s the narrative behind SocialFi, a hybrid approach aiming to disrupt how people connect, share, and build communities.
Founders are already eyeing an opportunity with SocialFi.
Quite a hashtag-friendly mix of Social Media and Finance — SocialFi presents a monetization model through which both creators and consumers can earn rewards for their interaction. The former with direct cash-in monetization options and the latter with rewards and incentivization. You may find a similarity between DeFi — and that’s because SocialFi platforms are built around the existing blockchain infrastructure, adding decentralization and immutability to its key benefits.
Most SocialFi platforms are structured as Decentralized Autonomous Organizations (DAOs) where applications are creators, influencers, and participants who prefer ownership of their data, fair monetization models, and above all, freedom of speech — more on that later. This is especially important for content creators who earn through platform monetization. However, without proper ownership, it becomes easier for content to be illegally copied if there aren't sufficient measures.
Now before you say “SocialFi is set to disrupt social media!”, here's what you should know:
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It’s not a platform, and just like GameFi, it’s an incentivization model in the creator economy.
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How brands are going to build their product offerings around it, that’s entirely up to them.
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SocialFi heavily advocates for Proof-of-Ownership models with more functionalities to come.
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SocialFi was largely caused by users tired of centralization.
Web2 vs Web3 // Rigidity vs Fluidity — This debate always keeps the internet split in half, but for SocialFi, Web’3 nature of providing immutable and distributed infrastructure has further pushed the ethos. How many creators do you see with millions in followings but still not being able to turn brand value into money? Sure, sponsorships and brand deals have become a thing, but having higher social media credibility doesn’t automatically mean they’re minting Benjamins and Gandhis.
We don't want one central authority controlling what we can post, but we also don't want harmful content spreading freely either. SocialFi platforms handle this by letting each user decide what they want to see. All posts are stored in a public database, and special software quickly identifies what each post is about. Then, each user can choose which types of posts they want to see and which ones they want to block. This way, it's not up to a small group of people to decide what's allowed.
We know what you are thinking - Is SocialFi sustainable?
When an emerging model sounds too good to be true, you inherently ask “What are we missing here?” Between the design principles of SocialFi and minor scalability challenges, the idea isn’t without its headwinds. Facebook flushes four petabytes of data to its servers, every single day. 300 million photo uploads, 293,000 status updates, and 510,000 comments — can SocialFi platforms deal with such volumes even with a distributed architecture? Maybe! Too soon to answer correctly.
But if prospects remain healthy — despite a few downturns — it is the next leap in social media.
Rupak Bid // Content Strategist for Web3 and SaaS Brands
I'm the former Head of Content at Burency Global. My experience in working with startups — as well as delivering content to Fortress Trust, Messari, and Immutable — brings you decades of learning from building Web3-specific strategies. Have a project or planning to enter the Web3 space? I can:
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Help your brand with hyper-personalized content strategies.
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Help your brand to build a community of informed users.
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Help your brand with product launches and ICOs.
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Offer you Fractional Marketing roles and advisory.
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Build an extensive catalog of content that keeps converting.
I treat content as a product — and just like any product — content needs constant improvements. My job is to design the content strategy for your brand, monitor the CTA catalysts at each step, and if they’re not working, decide a different one. By signing me, you are working with someone who:
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Helped a brand hit 47,000 users and assisted many ICOs.
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Tells stories to drive interactions and how they worked.
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Turns demand into data, and then, data into Dollars.
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Starts a flywheel of growth, until community takes over.
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Most importantly, sees you as a partner, not just a client.
You seem like someone I love to work with — a Startup, an Entrepreneur, or a Thought Leader? If my service offerings seem exactly like what you might be looking for, I’d be excited to learn about your project. Please reach out on LinkedIn or book a discovery call at https://www.rupakbid.com/#book.