The blockchain industry is experiencing unprecedented growth, with groundbreaking innovations flooding the space. From play-to-earn games to SocialFi decentralized applications, the blockchain industry is now a hotbed of innovative technology.
What is SocialFi
SocialFi, as the name implies, is an integration of social networking and blockchain finance. This new blockchain tech seeks to create decentralized social apps through the interplay of social media and DeFi. The social space lets users earn income from content creation, participation in DAO governance, NFT minting, communicating with other users, watching entertainment, and gaming.
Understanding Web 2.0 and Web 3.0 SocialFi
Web 2.0 social media applications which offered user-generated content were a step forward as compared to Web 1.0 read-only websites which were the first iteration of the internet. Social media on Web 2.0 has been in existence since 2004 with over 1 billion active Facebook users and over 500 million active Twitter accounts.
Unlike the Web 2.0 social media applications, Web 3.0 SocialFi applications offer more decentralized protection of users’ personal information as well as fairly sharing ads revenue to users.
How Does SocialFi Work
These traditional social media applications work on a user-generated content model where users are allowed to create content they enjoy for their online communities.
Although, these social media applications generate billions of dollars in revenue annually for the parent company from online advertising and other revenue-generating methods with nothing for these content creators. SocialFi intends to close that gap, proposing a medium for these content creators to also earn a share of the revenue generated.
SocialFi has created a way of networking that controls the privacy and safety of users and gives them more control of the content they post. SocialFi allows users to earn income from their content, but it takes it further by allowing them to also earn income from decentralized activities such as communicating, NFT minting, and gaming. Advertising revenues on SocialFi are fairly distributed, which means a content creator can potentially earn more income through advertising using SocialFi networks
Social Media Companies Adopting SocialFi
Facebook, now Meta, is making huge strides with transitioning into Web 3.0.
Although there hasn’t been any adoption of NFTs on Instagram, the company’s CEO revealed late last year that they are exploring the NFT space in hopes of making NFTs more accessible to their user base.
Twitter has also made plans to integrate NFTs into its social platform, first starting with a new feature that allows its Twitter Blue account users to show off their NFTs as their profile pictures. According to the news report from Techcrunch, the Twitter blue subscription is not yet globally available, which will limit the adoption of NFT Profile Pictures to the early market where the offering is now live - the U.S., Canada, Australia and New Zealand.
The video-sharing platform is also not left out of this Web3 adoption. YouTube has started looking into NFTs as an alternative source of revenue for their creators. To start, YouTube has been distributing personalized NFTs to influencers on the platform and has announced that creators will be able to monetize the video content they create and sell them as NFTs.
Reddit has also rolled out plans of integrating into the web 3 SocialFi space. On top of planning to create an NFT marketplace soon, the social media giant has plans to convert people's Karma points into crypto tokens. According to Binance News, Reddit followed closely behind Twitter in the NFT profile picture rollout. On top of planning to create an NFT marketplace in the near futue, the social media giant has plans to convert people’s Karma points into crypto tokens.
Given SocialFi's current growth trajectory, many believe it is a significant breakthrough in the technology industry and an excellent means to safeguard users' interests in the virtual realm. Although still in its infancy, SocialFi has the potential to have a big impact on the cryptocurrency, blockchain, and NFT space, as well as how we interact socially on a global scale. SocialFi is a distinct possibility of becoming an integral feature of the Metaverse ecology soon.