Exploring the Current Status and Future Development of Web3.0 Social Products

With the popularity of Web3.0 social products, the number of users is continuously increasing. However, after the airdrop ends, the daily active user count often drops sharply. How can projects maintain their vitality? Whether tokenization can truly motivate user participation remains uncertain. Additionally, with the price fluctuations of tokens in the secondary market, can Web3.0 native applications establish a foothold, and how can the conflict between content moderation and decentralized social interaction be balanced?

These are the questions that entrepreneurs in the Web3.0 social space need to consider. This article will explore multiple angles, including the essence of social interaction, the significance of Web3.0 social products, their classification characteristics, existing problems, and optimization directions, to help readers better understand the current status and future of Web3.0 social products, and provide some ideas for addressing social fatigue.

The essence of social interaction is "the relationship between people + interaction," which can be broadly divided into interactions among acquaintances and interest-based interactions. However, the total number of crypto natives in Web3.0 is limited, so products focusing on interactions among acquaintances may be premature. Interest-based interactions require the creation of new relationships in new scenarios; simply copying and migrating social relationships from other platforms is not feasible.

Reasons Why Web3.0 Social Products Are Gaining Attention

By 2027, the number of global social media users is expected to approach 6 billion. Currently, the average internet user spends 144 minutes per day on social media and instant messaging applications. Despite having a large user base, traditional centralized social platforms face many issues, such as data breaches, content censorship, and algorithmic bias.

As a result, more and more people are starting to pay attention to Web3.0 social products. These products are based on blockchain technology, enabling a decentralized social experience that ensures user data privacy and security. At the same time, Web3.0 social products can eliminate the censorship and algorithmic bias of centralized platforms, providing more autonomy to original content creators. The development of Web3.0 social products may become one of the important trends in future social media.

From user data, Facebook remains a giant in the social media field, with over 2.9 billion monthly active users. Meta Platforms owns four major social platforms, each with over 1 billion monthly active users, including Facebook, WhatsApp, Facebook Messenger, and Instagram. These large centralized platforms have successfully monopolized the entire industry. However, with the emergence of SocialFi, this situation may be disrupted.

SocialFi aims to address the shortcomings of traditional social platforms. Based on principles of fairness and decentralization, blockchain social media applications thrived at the end of 2022. This is evident from the sharp increase in the total number of active wallet addresses interacting with social DApp smart contracts. Currently, the total number of smart contracts for social DApps is rapidly increasing, and the new trend of SocialFi may fundamentally change the landscape of the social media industry.

Main Categories and Characteristics of Web3.0 Social Products

Current popular social and DID projects mainly include infrastructure, middleware, applications, and tools, etc. Among them, the SocialFi track is gradually expanding, with many projects based on social tokens that integrate DeFi elements, continuously undergoing technological updates and upgrades to become SocialFi projects.

According to the issuance projects of Social tokens, they can be divided into the following categories:

1. Personal Tokens: Token holders can gain early access to fan groups, discounts, or opportunities to participate in events ahead of time, as well as merchandise, NFTs, etc. These tokens represent status or engagement, and early creators or entrepreneurs can receive economic returns. Typical projects include RAC, ROLL, MeTokens, MintGate, and ALEX.

2. Community Tokens: Primarily issued and controlled by a group, usually governed by a DAO. They are used to incentivize community members' contributions, such as granting access to the community, enjoying special information, etc. Typical cases include WHALE, Mirror, FWB, Cent, Yup, Matataki, SWAGG, KarmaDAO, Ark, Seed Club, Forefront, Flamingo, and Aavegotchi.

3. Minting and distributing platform tokens: Represents control over the platform, facilitating creators to issue and manage tokenized communities. Typical projects include Chilliz, RALLY, BitClout, Zora, CircleUBI, Loopss, Fyooz, Bluesky, Audius, Mastodon, Nafter, Coinvise, and Calaxy.

In addition, there are some noteworthy projects, such as Mask Network, which connects Web2.0 and Web3.0 through a "plugin" approach, allowing users to seamlessly send encrypted messages, cryptocurrencies, and even DAPPs on existing social networks.

Challenges Facing Web3.0 Social Platforms Today

1. High data storage costs: Web3.0 social platforms store user data in a decentralized manner on blockchain networks, requiring more computing resources and storage space, resulting in higher storage costs. Some solutions have emerged, such as increasing block size or shard parallel processing, as well as storing some data on off-chain servers.

2. Insufficient network effects: Compared to traditional platforms, Web3.0 social platforms have a lower user base and activity level, resulting in weaker social network effects. The main user groups currently consist of Bitcoin and Ethereum users, as well as fintech professionals. Attracting a large number of Web2.0 users is no easy task and requires more time and resources for mass education.

3. Cross-platform interaction difficulties: Different DeSoc protocols may adopt different data formats, encryption methods, and validation rules, requiring cooperation between protocols to establish standardized data formats and validation rules. In addition, users may prefer to stay on the protocol they initially used, leading to fragmentation of social networks.

4. Achieving a sustainable economic model: Currently, SocialFi mainly captures value through social behavior rewards and content creation incentives. However, in most projects, content providers are primarily from the project team, leading to serious homogenization issues and a lack of high-quality content creation and a sound review mechanism.

5. Intense competition in business expansion: Top influencers become the target of competition among various projects. SocialFi aims to tokenize social influence and create a self-consistent economic system to help individuals with different levels of social influence gain corresponding benefits.

Optimizing the Development Direction of Social Products

In 2023, SocialFi will still be one of the hot topics of the next cycle. An increasing number of middleware and protocols are continuously innovating, making social applications more stable, secure, fast, and scalable. At the protocol level, technologies in areas such as storage, communication, content distribution, and reputation/credentials are continually innovating.

Decentralized social media protocols and middleware are receiving increasing attention. Besides Nostr and Farcaster, LensProtocol is one of the most popular DeSoc protocols, built on Polygon to create a Web3.0 social graph, fully leveraging the potential of NFTs.

Privacy protection will become an important area of innovation. zk technology can be used to enhance the security and privacy of lending transactions, protecting user transaction data and lender privacy. However, it is necessary to balance the conflict between anonymity and the establishment of social status.

In the future, Web3.0 social products need to explore more innovative interaction methods and social scenarios to attract more users to join. At the same time, issues such as user experience, scalability, and privacy protection also need to be addressed. With continuous technological advancements, Web3.0 social products are expected to become more mature and widespread.