Recently, SocialFi has become the focus of attention of many people and has aroused discussion. Top institutions have also deployed some well-known projects. Projects like deso have also gained a16z’s attention. But currently, SocialFi does not have a practical use case that attracts a large number of users. Whether SocialFi will become the next hot spot is also worth pondering.
When it comes to SocialFi, the first thing people think of is social media. Today’s mobile Internet is inseparable from social interaction. The essence of social interaction is the communication and exchange between people. These include chat software, Weibo, Douyin, Twitter, Facebook, forum posts, posts, etc. Then the blockchain version of SocialFi needs to solve the current pain points of social media that people need to pay attention to. So what’s the problem with SocialFi?
Most social media have no incentives. The user appears in it as the user. When the number of users increases, the valuation of the social platform increases, so as to obtain corresponding returns. Including investment income from stock prices and platform advertising income. The user can be regarded as a 0-month salary worker on the platform. Except for a small number of followed KOLs who have monetization channels to realize value and a small number of resource sharing, communication and learning platforms have improved user capabilities, others have almost no return on most social platforms. Especially for entertainment social platforms, they just sold their attention to the brand.
The addition of blockchain can provide users with token incentives at low cost. So that the platform and users get dividends. The more users there are, the higher the value of the platform currency will be, which will lead to a win-win situation. The right incentive mechanism can make SocialFi develop rapidly. This is also the core advantage of SocialFi.
Many people believe that they still remember the banning of Trump’s Twitter account in the previous U.S. election. There has been a lot of discussion about this matter, and both sides have their own reasons. But at least it conveys a concept that social platforms can easily control user accounts and conduct actions such as deleting posts and banning accounts. This also severely disrupted the user’s autonomous control over the account. Of course, sometimes things happen for a reason, for example, some users publish rumors and other remarks that disrupt the operation of society. Centralized social platforms must be subject to corresponding supervision and supervision, so as to ensure the smooth operation of the platform. Of course, sometimes the platform will do evil because of this. For example, the platform charges for deleting numbers or deleting posts. Therefore, centralized social platforms are actually a double-edged sword.
In the blockchain world, the autonomy of the account belongs to the user, and the information and content posted by the user will be processed on the chain. The platform cannot be deleted. This guarantees the user’s own freedom of speech. When the platform encounters rumors, it can also block accounts or comments through DAO voting. This ensures the fairness of the decentralized social platform. Of course, there is still a long way to go before this idea is realized. But to truly guarantee the autonomy of user accounts is the support that blockchain needs to give. In this way, it is possible to effectively avoid the risk of dominance and evil on the platform side.
Of course, although SocialFi can solve the current problems encountered by social platforms. But SocialFi still needs to solve its own problems, which mainly include the following aspects:
Identity authentication problem
The ultimate of SocialFi is to run in the form of a DAO organization, so identity authentication becomes a key point. Because there is no corresponding identity authentication, it does not comply with the existing laws and regulations of some countries and regions. Therefore, it faces greater legal risks. At the same time, identity authentication is also to avoid the existence of malicious brushing. There is also the security of identity authentication. SocialFi faces the world where personally identifiable information may be used maliciously. Therefore, solving the personal identity problem on the blockchain is a problem that SocialFi faces.
Worthless output and invalid output
In fact, buying and selling traffic is already ubiquitous in the existing Internet world. It even formed a gray industrial chain. This phenomenon is essentially the pursuit of interests. It cannot be solved in the Internet, and it is difficult to avoid it when encountering the blockchain.
Faced with this kind of problem, in fact, SocialFi still needs DAO to effectively avoid it. For example, voting and review, etc., this will avoid such problems to a certain extent. But at the same time it will also reduce some heat and timeliness, so there is currently no perfect solution.
Malicious trading traffic
Due to the incentives of the blockchain, SocialFi may actually increase trading traffic, readings, or likes. In this way, some capital deliberately made some people “suddenly burst into popularity” under the control of money. In turn, a deformed “KOL” is formed. These purposeful behaviors often put the wrong output content in a conspicuous position in the later stage. This has the effect of advertising, resulting in misleading users.
In general, the current development of SocialFi is actually immature. The imperfections of some blockchain infrastructures, mechanisms, and rules may lead to certain malicious behaviors. At the same time, the existing SocialFi project has not yet been relatively successful and has changed the status quo products. So from this perspective, SocialFi still has a long way to go in the future. Of course, as far as investors are concerned, the early stage of the layout of the project also needs to bear the losses caused by the failure of the project when it sees the trend and dividends of the later development. This is also something you need to think about before investing.