Opportunities and Challenges of Web3 Social: From the Past to the Future

Recently, the public opinion in the Web3 field is filled with hostility, and many people believe that Web3 is just a place for retail investors, with various parties cutting each other’s interests. However, in my view, Ponzi schemes are neutral; they are financing techniques that reduce project operating costs and serve as a means to protect the ultimate success of projects. Whether in DeFi, social networks, or other sectors, there have always been builders striving continuously. As long as the pace of progress does not stop, the Web3 revolution has not failed. All technological innovations occur in an emergent manner, and short-term troughs are insufficient to prove that the industry lacks prospects.

This article will analyze the achievements of Web3 builders in the social field over the past eight years from a developmental perspective, summarizing experiences and lessons learned, and identifying potential opportunities and blueprints. Although Web3 social is not yet mature, the achievements in the industry are noteworthy. As Web3 technology continues to advance and the barriers and costs decrease, the emergence of genuine products may be just around the corner.

The Underlying Demand Theory of Web3 Social

Any successful product is built on solid demand. Web3 projects are often criticized for failing to integrate with the real economy. To break the bias that "Web3 is just a way to exploit users," we need to fundamentally demonstrate the demand for social interaction in Web3.

Humans are social animals with social needs. This conclusion has been repeatedly validated by social products. People need to connect with others to perceive their emotions, attitudes, and mental activities, and to receive information feedback to adjust their own emotions and cognition. This need is as essential as eating, drinking, and breathing; it is an intrinsic part of humanity, engraved in our genes through evolutionary history. This is the fundamental social need of humans: connection, mental interpretation, and self-coordination.

Holding tokens is a brand new way of connecting. An open and verifiable database expands the dimensions of information we gain from connections. A whole new information environment will nurture entirely new social relationships and interaction methods.

The psychological motivations behind most social behaviors on the Internet can be summarized as: self-presentation, emotional venting, and seeking recognition. Compared to traditional offline socializing, the Internet has created more social scenarios through multimedia. From forums, BBS, chat rooms to blogs, instant messaging, social media, and gaming spaces, different scenarios encompass various interpersonal relationship networks, content, and presentation methods, resulting in a series of successful projects.

Looking at the development of social networking on the Internet, economies of scale are a significant characteristic. Historical experience shows that social projects or products that cannot establish economies of scale in social activities among specific groups of people and for specific purposes cannot survive. Compared to the millions of concurrent users of global Web2 social giants, the scale of Web3 social networks is even less than a fraction of that. Economies of scale are a mountain; without forming scale, one cannot escape the outcome of being subsidized to death. The scale of social networks and content determines whether social nature and motivation can be better realized. How can products without scale help users expand their social connections? How can they achieve personal display and empathize with others?

The development direction of Web3 has been determined since the concept was proposed: an industrial ecosystem supported by a trusted and open data environment, and a financial environment underpinned by tokens. How does such an environment nurture a brand new industrial pattern? With underlying information support across databases and organizations, the ability to freely choose a modular plug-and-play social interface is a unique advantage of Web3 social. Tokens are a typical characteristic of Web3, with social support for token issuance, and the core content revolves around rights interactions quantified by tokens; organizing social relationship scenarios is a unique application scenario of Web3 social.

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

The Development Context of Web3 Social

The advantages provided by the Web3 environment for entrepreneurs have resulted in 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 as social animals, and our information input determines what kind of people we are, then the power of internet social platforms is immense. We can hardly imagine the serious consequences of handing this power to companies and governments. Losing the sovereignty over social information means losing our freedom of cognition and choice. The Facebook personal data leak led by Cambridge Analytica shows us how easily our will can be manipulated. We and future generations need to control our data sovereignty. Therefore, decentralized social technology solutions are a necessity for the future.

To achieve decentralized social networking, breakthroughs must be made in communication protocols, data, and applications. The communication technologies used to achieve global consensus through blockchain may not be suitable for decentralized social communication. Therefore, based on the experience of STEEM, new generation projects like Bluesky, Nostr, Lens, and Farcaster have proposed their own decentralized social protocols. By relinquishing some aspects of data decentralization, all protocols have made significant progress. On any of these protocols, mimicking Web2 social tools is no longer a problem, and in fact, due to the realization of decentralization, users have greater autonomy. Users have the right to maintain their intangible assets within the system. However, as mentioned earlier, Web3 businesses face significant scale disadvantages.

Technology is not the problem. How to move the mountains of economies of scale that block the road to success is the challenge faced by all projects proposing solutions. To penetrate this disadvantage, token incentives have become the most direct means for the vast majority of projects in the short term.

The Token Incentive Revolution Faces Obstacles

The birth of tokens is like opening Pandora's box. All Web3 users are forced to face a complex financial environment from the moment they enter the industry. For project teams, adopting tokens allows them to leverage users' desires as subsidies, 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 judge, and the effectiveness of token incentives is questionable.

2. Token incentives are facing witch attacks.

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

The STEEM blockchain can be considered a pioneer in the entire Web3 social industry. To this day, not only do many of the concepts and structural designs it proposed continue to be imitated and referenced by current projects, but it has also nurtured a group 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 hierarchical security.

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

This effectiveness is built on the foundation of asset and power centralization and a solid consensus. When the founder BM left, the founding team fell apart, and the project was sold to the infamous Sun Yuchen, leading to a collapse of consensus. In the early stage, the 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. In the later stage, 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. Today's top social media platforms have achieved user content that is personalized for each individual, a level of refined content selection that cannot be reached by relying solely on human resources and content tags for sorting and pushing content.

After STEEM, many projects have accelerated platform expansion by issuing tokens, such as Torum, BBS, and those that want to scale have adopted token incentives. Of course, there are also later projects like Lens protocol that use the expectation of getting something for free. These incentives contradict the "non-monetary reward" element of social interactions. Experiments show that external material rewards can reduce internal psychological rewards, which mixes non-social content into social content. Social links are information channels, and the value of social platforms lies in aggregating information within these social channels. However, this incentivization, which mixes in "sand," actually leads to a decrease in social efficiency. It makes an already information-deficient channel face more noise, and decline becomes a natural consequence.

Like the Degen on Farcaster, a portion of the tokens is given out as rewards. This utilizes Meme tokens to incentivize the unique financial functions of social projects in Web3, rather than content creation or recommendations (. By introducing the financial attributes of crypto socializing, 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 technique for token incentive platform projects. The wealth topics of Degen combined with the innovative possibilities on Frames have attracted more and more builders to participate in Farcaster, triggering ecological prosperity for Farcaster. It can be said that, so far, I personally believe: this is a classic operational battle. The ecological emergence brought about by this operation cannot be ignored. So far, the ecology has produced tools including NFT piggy banks, various streaming ) voice chat rooms, short videos, GIFs (, launch platforms, and more. Although I have not seen signs of Farcaster breaking through the business boundaries of Lens ) or the current industry bottleneck (, this emergence is worth paying close attention to.

![Deep Exploration of Opportunities and Missions in Web3 Social])https://img-cdn.gateio.im/webp-social/moments-8cab9bf6098a6f32d479b0546ba377c6.webp(

)# Content autonomous revolution phase setback

Web3 focuses on decentralization, which translates to eliminating monopolies in business.

The starting point of Web3 social should be around 2016-2017. At that time, Web2 social products had already developed rapidly. In the previous two cycles, social projects were all focused on the narrative of content autonomy. Various projects were trying to put content "on-chain", and based on the content "on-chain", it was possible to work on content assetization.

Born in 2016, STEEM has fallen behind due to the disintegration of its project team and lagging development progress. Although it had already achieved content on-chain at the time of its launch, it lacked an EVM environment and could not run smart contracts. After the DeFi summer that began in 2020, it gradually fell behind. The leading position in content on-chain was taken over by Mirror. The selling point of Mirror is that it provides a relatively user-friendly text content editing environment. Users can sign with their wallets to publish their text content. The content is on-chain and cannot be tampered with by anyone. Other users can subscribe to and follow a certain account. Additionally, content can be minted into NFTs and traded in the NFT market. So far, this project continues to operate, and while traffic has decreased, some Degen players still use the project to publish content and engage in some content NFT minting activities.

Mirror is an excellent Web3 product, designed with a minimalist spirit, and makes great use of a trustworthy and open database. Anyone can assert rights over content data on the internet by signing with a wallet. The asserted content can be issued as NFTs and traded in the NFTfi environment within 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, written content, especially lengthy articles, inherently lacks traffic and is a discarded pawn in the era of junk culture. At the same time, there are projects focusing on voice and video to put content on-chain. Without discussing the ineffectiveness of content incentives, the massive data volume makes it difficult for project operating costs to sustain. Doing content business is essentially doing media. Either you have good content to attract users, or you have a large user base to attract good content. Simply providing a set of technical solutions cannot constitute a business.

At the end of 2013, another content-based project emerged. Bodhi is also a minimalist product.