Opportunities and Mission of Web3 Social

Recently, the discourse around Web3 is filled with hostility, as if it is a large field of leeks. In my opinion, Ponzi is neutral; it is a financing technique that reduces project operating costs and serves as a means to safeguard the ultimate success of the project. As long as the pace of progress does not stop, the Web3 revolution has not failed. All technological innovations emerge in a surge, and a short-term downturn is insufficient to prove that the industry lacks prospects.

Although Web3 social has not yet fully matured, the development achievements in the industry are commendable. Different people have different expectations for Web3; some hope for a better experience, while others need protection of personal data sovereignty. As technology continues to advance and the cost of entry keeps decreasing, the emergence of real products may just be happening at this very moment.

The Underlying Demand Theory of Web3 Social

Any successful product is built on solid demand. Web3 projects are often criticized for their inability to integrate with the real economy. We need to fundamentally prove the demand for social interaction in Web3.

Humans are social animals with social needs. This conclusion has been repeatedly demonstrated by social products. People need to establish connections with others, perceive others' emotional attitudes, and receive information feedback to correct themselves. This need is as fundamental as eating and drinking, ingrained in our genes through evolutionary history. In short, it is about connections, mental interpretation, and self-coordination.

Holding tokens is a whole new way of connecting. An open and verifiable database expands the dimensions of information obtained from links. A brand new information environment will nurture new social relationships and modes of interaction.

Most social behaviors on the internet can be attributed to: self-presentation, emotional expression, and seeking validation. Compared to traditional offline socializing, the internet creates more social scenarios through multimedia. From forums, BBS to blogs, IM, social media, and gaming spaces, these new scenarios encompass different interpersonal networks and content presentations, resulting in a series of successful projects.

Economies of scale are a significant feature of internet social interactions. Historical experience tells us that projects that cannot establish economies of scale in social activities aimed at specific groups and purposes cannot survive. Compared to the millions of concurrent users of Web2 giants, the scale of Web3 social interactions is even less than a fraction of that. Scale determines whether the nature and motivation of social interactions can be better realized. Without scale, how can users expand their relationships, achieve visibility, and reach empathy?

The direction of Web3 development is towards an industrial ecosystem supported by a trustworthy and open data environment, as well as a financial environment backed by tokens. How does such an environment nurture a brand new industrial landscape? The underlying information support across databases and organizations, along with the freedom to choose front-end composable and pluggable social interfaces, is the unique advantage of Web3 social. Using social interactions to support token issuance, with the core of tokenized rights interactions, the organization of social relationships represents the unique application scenario of Web3 social.

In recent years, the Web3 industry has really gone to great lengths to gain scale advantages in the niche social market.

The Development Context of Web3 Social

This chapter aims to prove that Web3 social is continuously progressing, highlighting the lessons learned and the ongoing technological advancements in the industry, which are constantly pushing the industry closer to an explosive singularity.

The advantages provided to entrepreneurs by the Web3 environment have led to two parallel trends in the development of social projects:

1. How to develop decentralized social technology standards
2. How to Build Token Consensus through Social Networking

Competition of Decentralized Social Technology Standards

If we consider humans to be social animals, our information input determines what kind of people we are. Therefore, the power of internet social platforms is immensely significant. We cannot imagine the serious consequences of handing this power over to companies and governments. Losing control over social information sovereignty also means losing cognitive and choice freedom. The Facebook data leak scandal led by Cambridge Analytica tells us how easily our will can be manipulated. We and future generations need to gain control over our data sovereignty. Therefore, decentralized social technology solutions will be a necessity in the future.

To achieve decentralized social networking, breakthroughs must be made in communication protocols, data, and applications. The communication technology used to achieve global consensus in blockchain may not necessarily be suitable for decentralized social communication. Therefore, based on the experience of STEEM, the new generation of projects such as Bluesky, Nostr, Lens, and Farcaster all propose their own decentralized social protocols. By giving up some degree of data decentralization, all protocols have made significant progress. On any protocol, mimicking Web2 social tools is no longer an issue, and even due to the implementation of decentralization, user autonomy is stronger. Users have the right to maintain their intangible assets within the system. However, as mentioned earlier, Web3 businesses face tremendous scale disadvantages.

Technology is not the issue. The challenge that all proposed solution projects face is how to move the mountain of economies of scale that blocks the road to success. To overcome this disadvantage, token incentives have become the most direct means for the vast majority of projects in the short term.

The token incentive revolution encounters obstacles

The birth of tokens is like opening Pandora's box. From the moment all Web3 users step into the industry, they are forced to face a complex financial environment. For project parties, adopting tokens can leverage users' desires as subsidies, thereby reducing project operating costs.

The revolution of token incentives faces two major dilemmas in social environments:

1. The subjective value of social content is difficult to assess, and the effectiveness of token incentives is questionable.

2. Token incentives face witch attacks.

These two issues have not been completely resolved to this day. We introduce a case that helps with understanding.

The STEEM blockchain can be regarded as a pioneer in the entire Web3 social industry. To this day, not only are many of the ideas and structural designs it proposed still being imitated and referenced by current projects, but it has also nurtured a batch of blockchain application teams and projects. In 2016, the STEEM blockchain initially made innovative attempts in multiple dimensions such as token incentives for content, token incentives for real-person curation, data availability layers, and account layered security.

Applications built on the STEEM blockchain are a form of social media, where the quality of media content is determined by users based on the amount of tokens they stake as weight. In the early stages of the project, the founding team had an absolute advantage in terms of reputation and the number of staked tokens. At that time, content production and filtering recommendations based on token staking weight were effective. Similar to the vast majority of projects that adopt token incentives, the huge wealth effect attracts a swarm of witches. However, the token staking on the STEEM blockchain includes penalties, which can provide a certain degree of immunity against witch attacks.

This effectiveness is built on the centralization of assets and power, as well as a solid foundation of consensus. When founder BM left, the founding team fell apart, and the project was sold to the notorious Sun Yuchen, leading to a collapse of consensus. In the early stages, this collapse of consensus led more individuals to choose witch attack methods to profit: token holders liked each other's posts, and proxy mining ran rampant. Later, when algorithm recommendation systems and AIGC technology matured, this content production and recommendation system based on token-weighted voting reached the moment of exiting the historical stage. Now, top social media platforms have achieved personalized user content, and this refined content selection cannot be matched by human resources combined with purely content-tag-based sorting and pushing.

After STEEM, many projects have used token issuance to accelerate platform expansion, such as Torum, BBS, and anyone looking to scale has adopted token incentives. Of course, later there are also those like Lens protocol that rely on expected benefits. These incentives go against the "non-monetary reward" factor of social interactions. Experiments show that external material rewards can diminish intrinsic psychological rewards, which leads to social content being mixed with non-social content. Social links are information channels, and the value of social platforms lies in aggregating information within social channels. However, this sandy incentive leads to decreased social efficiency. It is natural for an already information-scarce channel to face more noise, resulting in decline.

Like Degen on Farcaster, a portion of the tokens is distributed through tips. This is a financial feature unique to Web3 social projects powered by Meme tokens, rather than content creation or recommendations (. By introducing crypto social financial attributes, it creates a wealth effect and triggers ecological prosperity. A platform can only have one token, but it can have countless Meme tokens. Meme tokens can fail, but platform tokens cannot. Using Meme tokens to boost social projects will become a superior token incentive technique for platform projects. The wealth discussions of Degen combined with the innovative possibilities on Frames have attracted more and more builders to participate in Farcaster, triggering ecological prosperity in Farcaster. It can be said that, so far, I believe: this is a classic operational campaign. The ecological emergence brought about by this operation cannot be ignored. So far, the ecosystem has already produced tools including NFT piggy banks, various streaming ) voice chat rooms, short videos, GIFs (, launch platforms, and more. Although I have not found signs that Farcaster is breaking through Lens's business boundaries ) or the current industry bottlenecks (, this emergence is worth paying close attention to.

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) Content self-revolution phase setbacks

Web3 emphasizes decentralization, which in business translates to breaking monopolies.

The starting point of Web3 social should be in 2016-2017. At that time, Web2 social products were developing rapidly. In the previous two cycles, social projects were all focused on the narrative of content autonomy. Various projects were trying to "chain" content, and based on the "chaining" of content, they could work on content assetization.

Launched in 2016, STEEM has fallen behind due to the disintegration of its project team and slow development progress. Although it achieved content on-chain at the time of its launch, it lacks an EVM environment to run smart contracts, and gradually fell behind after the DeFi summer that began in 2020. The lead in content on-chain has been taken over by Mirror. Mirror's selling point is that it provides a relatively user-friendly text content editing environment. Users can publish their written content by signing with their wallet. Content is on-chain and cannot be tampered with. Other users can subscribe to and follow a particular account. They can also mint content as NFTs and trade them on the NFT market. So far, this project continues to operate, although traffic has declined, some players still use the project to publish content and engage in NFT minting activities.

Mirror is an excellent Web3 product, designed with the spirit of minimalism and makes great use of a trustworthy and open database. Anyone can assert ownership of content data on the internet through wallet signatures. The content that has been asserted can be issued as NFTs and traded in the NFTfi environment under the EVM ecosystem. The user attrition of Mirror is essentially 1, compared to traditional Web2 content operators, it not only lacks operational capability but also, textual content, especially lengthy discussions, inherently lacks traffic, making it a pawn in the age of junk culture. At the same time, there are projects focusing on content on-chain through audio and video. Without discussing the ineffectiveness of content incentives, the enormous volume of data makes it difficult for project operational costs to be sustained. Doing content business is akin to doing media. Either you have good content to attract users, or you have a large user base to attract good content. Simply providing a technical solution cannot turn into a business.

At the end of 2013, another content-based project emerged. Bodhi is also a minimalist product. Inspired by certain projects, Bodhi no longer mints NFTs associated with content at a uniform price but instead uses bonding curve technology to sell at varying prices; the more is sold, the more expensive it becomes. It also replicates certain content on the blockchain to generate NFT assets. There are quite a few similar projects attempting to turn content into certifiable assets. However, what they cannot change is that in the internet era, while content can be certified, the information carried by the content can be easily transferred. Even in cases of direct theft or infringement of content, putting content on the blockchain does not help raise the cost of illegal activities. Therefore, there are currently no good cases of directly issuing assets based on content as a value anchor.

Another reason why the market is insensitive to the assetization of content is that the timing is not right. Although reason tells us that personal information is valuable, users...