A large number of SocialFi projects emerged and exploded
In the second half of 2021, social tokens such as Whale, Chiliz and Rally once saw a large increase, and several projects such as BBS network, Showme and Mirror.xyz exploded in popularity. By the end of November 2021, the SocialFi platform Monaco Planet was on fire, and there was a situation that invitation codes were hard to find, and the SocialFi project attracted a lot of attention.
Investors' favor
In 2021, especially since the second half of the year, many SocialFi projects such as BitClout, Friends with Benefits, DeSo, Torum, Monaco Planet, BBS network, Mirror.xyz, etc. have received huge investments from well-known investment institutions such as a16z , Coinan, Sequoia Capital, Three Arrows Capital, etc. investment.
Industry alliance emerged
In August 2021, Social DeFi Alliance, or Social DeFi Alliance, was established. The main goal of the alliance is to launch more social DeFi projects that are suitable for social network users to participate, and to promote the connection between Web 2.0 and 3.0 and the application of Web 3.0. The participating project parties include Mask Network, Polygon, SushiSwap, QuickSwap, Gitcoin and other 15 DApps developed based on Mask with strong social attributes. 2.
Social Tokens are defined as "a token backed by a person's reputation, brand or community".
Social projects manage their communities by issuing tokens, which are tiered according to the activity and contribution of the users in the community, and the tokenized rights increase the revenue for the creators, cultural producers, and related participants.
Compared with traditional social media, social tokens help users solve three main problems.
Data rights attribution problem: In traditional social platforms, all social data of users are saved in the form of fields on the operator's server, and the data belongs to the platform party; while social tokens directly solve the problem of user data rights determination through blockchain technology.
Benefit distribution problem: Under the algorithm mechanism of traditional social platform, the benefit distribution between users and the platform in traffic realization is more inclined to the platform, and it is difficult to fully protect the rights and interests of users; social tokens are the way for users to gain revenue by financializing their social influence, without the problem of third-party draws such as platform.
Privacy and security issues: In traditional social networking, user accounts are authenticated by real names, and users' real information is stored on the operator's backend, which is easy to cause information leakage; social tokens are based on blockchain technology, and the anonymity of users' identity can protect users' privacy and security.
Social was once a popular field in the crypto world, and around 2017, a large number of blockchain+social projects emerged in bulk, with such star projects as Steem, Voice, ONO, QunQun, GSC, YeeCall, NRC, SwagChain, Fire Letter and TTC Protocol. However, many projects have disappeared in the early days due to immature market environment, limited user participation, and limitations of the ecological model.
After 2020, DeFi flourished, expanding the boundaries of decentralized finance in the crypto world and opening the door to new tracks. The combination of Game, NFT and DeFi emerged as GameFi, NFTFi, and further caused a boom in the crypto market NFT and meta-universe tracks, respectively.
SocialFi is a creative new way of social financialization. SocialFi has its own characteristics.
One is that SocialFi is a combination of social, web3.0 and finance, providing rewards and benefits to users by marking social influence, and users own the revenue of their creations in the platform, and their creations in the platform will not be monopolized and exploited by the platform.
Secondly, compared with the simple blockchain + social, SocialFi emphasizes more on the attributes of DeFi.
The SocialFi project builds a decentralized financial "Lego" based on smart contracts. Several high-quality projects have created a new generation of SocialFi platform that integrates social, financial attributes and digital NFT transactions.
Third, there are various forms of mining in SocialFi, including social mining with strong social attributes, content mining, and liquidity mining with DeFi attributes.
Project users can do content mining through content creation and social mining through effective high-frequency social interaction. In addition, some of the SocialFi project tokens can also be used for liquidity mining, etc.
For example, the social token Rally offers liquidity mining opportunities through Yearn vaults and other decentralized trading platforms such as Uniswap and Balancer.
Content: Content is the "proof of work" for participants in the SocialFi program platform to earn tokens or NFTs.
Social: Social activity is the cornerstone for the survival of SocialFi projects.
DeFi as the core economic system: Tokens or NFTs are the form of social capital that measures the contribution and social activity of participants, sustains the social platform, and enables more revenue through DeFi LEGO.
Decentralized organizational structure: Decentralized token rewards and delivery form a decentralized value circulation system and further require a decentralized platform governance structure.