A New Chapter of SocialFi: Who Will Lead the Next Round of Social Revolution?

SocialFi, as an application of blockchain technology in the social networking field, aims to capture social value and achieve a fairer distribution. Tools such as tokens and NFTs in the Web3 world provide individuals in social networks with the possibility to monetize their influence. At the same time, the high level of anonymity in Web3 allows for a separation between online public image and offline private life, lowering the threshold for becoming an opinion leader.

Although theoretically SocialFi projects have the potential to compete with traditional social media, they still occupy a marginal position in the cryptocurrency market. The market capitalization of SocialFi tokens accounts for only about one-thousandth of the total cryptocurrency market, far lower than mainstream sectors like GameFi and NFTs. There has not yet been a truly killer application in this field, and it remains in the early stages. However, considering the strong monetization capabilities of Web2 social platforms, SocialFi still has significant growth potential in the future.

The development history of SocialFi can be traced back to around 2017, when a number of projects such as Steem emerged. However, due to limitations in technology and user base, most of them failed to sustain development. The year 2021 can be considered the inaugural year of SocialFi, as multiple projects completed financing and remained active. In 2022, although it did not become the main driving force of blockchain progress as some predicted, several quality projects still emerged, such as Lens Protocol. In 2023, Friend.tech attracted attention with its unique model, but its momentum has weakened.

Currently, active SocialFi projects are mainly divided into two categories: social protocols/maps and social applications. In terms of social protocols, projects such as Lens Protocol, Farcaster, and CyberConnect each have their own characteristics. Lens Protocol NFTizes social elements, reflecting respect for the value of data. Farcaster adopts a multi-layer architecture, seeking a balance between decentralization and user experience. CyberConnect reduces the threshold for use through multi-chain deployment and flexible NFT strategies.

At the application level, projects like Friend.tech, Phaver, and Warpcast each have their highlights. Friend.tech innovatively commodifies social relationships, but its long-term development model remains unclear. Phaver is based on the Lens protocol and incentivizes the creation and discovery of quality content through token staking and a reputation system. Warpcast, as the flagship project of the Farcaster ecosystem, combines Web3 features with the experience of traditional social platforms, attracting a large number of users to participate.

Compared to traditional social platforms, SocialFi has advantages in privacy protection and value distribution. However, the high entry barrier is the main challenge currently faced. In the future, SocialFi projects need to optimize user experience, reduce learning costs, and simultaneously use token mechanisms to incentivize quality content and creators to achieve long-term user retention and a virtuous cycle.

Although SocialFi is still in its early stages of development, it is expected to reshape the social media landscape in the future with advancements in technology and increased user awareness, bringing a fairer value distribution mechanism for creators and users.