Exploring the Current Status and Prospects of Web3.0 Social Products from the Essence of Social Interaction

With the rise of Web3.0 social products, the number of users is showing an upward trend. However, after the airdrop ends, daily active users often see a significant decline. How can we maintain the vitality of the project? Whether tokenization can truly incentivize user participation remains unknown. Additionally, with the poor performance of the secondary market for tokens, how can Web3.0 native applications establish themselves? How should we balance content moderation and decentralized social interactions?

These are the questions that entrepreneurs in the Web3.0 social field need to consider. This article will explore multiple aspects, including the essence of social interactions, the significance of Web3.0 social products, their classification characteristics, existing problems, and optimization directions, in order to help readers better understand the current status and future development trends of Web3.0 social products.

The essence of social interaction is "relationships between people + interaction", which can be roughly divided into interactions among acquaintances and interest-based interactions. However, the total number of Web3.0 crypto natives is currently limited, making products focused on acquaintance interactions potentially premature. Interest-based interactions require creating new relationships in new scenarios, and simply replicating and migrating social relationships from other platforms is not feasible.

01 The Reasons Why Web3.0 Social Products Are Gaining Attention

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

As a result, an increasing number of people are paying attention to Web3.0 social products. Web3.0 social products based on blockchain technology can achieve a decentralized social experience, ensuring user data privacy and security. At the same time, it can eliminate the censorship and algorithmic bias of centralized platforms, giving original content creators more autonomy. Web3.0 social products are gaining attention and may become one of the important trends in the future development of social media.

User data shows that Facebook remains a giant in the social media sector, with over 2.9 billion monthly active users. Meta Platforms has four major social media 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 pattern may be disrupted.

SocialFi aims to address the shortcomings of traditional social platforms. The co-founder of Twitter proposed three principles that social media should follow:

1. Social media must be resilient to control by businesses and governments.
2. Only the original author can delete their own created content;
3. The review is best achieved through algorithm selection.

Based on the principles of fairness and decentralization, blockchain social media applications thrived at the end of 2022. This is evident from the surge in the total number of active wallet addresses interacting with social DApps smart contracts. Currently, the total number of social DApps smart contracts is rapidly increasing, and the new trend of SocialFi may completely change the landscape of the social media industry.

02 Common Categories and Features of Web3.0 Social Products

Currently popular social and DID projects mainly include infrastructure, middleware, applications, and tools, etc. Among them, the SocialFi track is gradually developing and growing, with many projects based on social tokens, integrating DeFi elements, and continuously undergoing technological updates and upgrades, becoming SocialFi projects.

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

• Personal Tokens: Token holders can access early fan groups, enjoy discounts or participate in events in advance to obtain merchandise, NFTs, etc. These tokens represent status or engagement, and early creators or entrepreneurs can receive economic returns. Typical projects include RAC, ROLL, etc.

• Community Tokens: Primarily issued and controlled by the community, usually governed by a DAO. Used to incentivize community members' contributions, such as granting access to the community, enjoying special information, etc. Typical examples include WHALE, Mirror, FWB, etc.

• Minting and distributing platform tokens: Represents control over the platform, primarily facilitating creators in issuing and managing tokenized communities. Typical projects include Chilliz, RALLY, BitClout, etc.

• In addition, there are some noteworthy projects, such as Mask Network. It connects Web2.0 and Web3.0 in a "plugin" manner, allowing users to seamlessly send encrypted messages, cryptocurrencies, and even DApps on existing social networks. Mask Network utilizes distributed system technology to enhance the security and privacy of user data.

03 Issues Currently Facing Web3.0 Social Platforms

The Web3.0 social platform is built on blockchain technology and decentralized principles, which significantly distinguishes it from traditional centralized social platforms. However, it also faces some challenges during its development.

1. High data storage costs: Web3.0 social platforms store user data in a decentralized manner on the blockchain network, which requires more computing resources and storage space compared to traditional centralized storage, resulting in higher costs. Some solutions have emerged, such as increasing block size, sharding for parallel processing, or storing identity information and read/write data capabilities on-chain like Farcaster, while other data is stored on off-chain servers.

2. Insufficient network effects: Compared to traditional platforms, Web3.0 social platforms have a lower user scale and activity, resulting in weaker social network effects. Users may find it difficult to find suitable social circles and communication partners.

3. Cross-platform interaction difficulties: The differences in data formats, encryption methods, and verification rules among different DeSoc protocols may make it challenging to achieve large-scale social interaction across platforms. Cooperation among protocols is needed to establish standardized data formats and verification rules.

4. Achieving a Sustainable Economic Model: Currently, SocialFi primarily obtains value through social behavior rewards and content creation incentives. However, in most projects, 80% of content providers are from the project team, and 20% of the content suffers from serious homogenization issues or difficulty in verifying accuracy. The lack of high-quality content creation, incentive mechanisms, and objective review mechanisms has become a bottleneck for development.

5. Intense competition in business expansion: SocialFi projects are competing to attract top traffic Influencers to settle in, in order to better monetize fan economy or strengthen connections with fans. SocialFi aims to create a self-consistent economic system by tokenizing social influence, helping individuals of different levels of social influence to obtain corresponding benefits.

04 Optimizing the Direction of Social Products

In 2023, SocialFi will still be one of the hotspots of the next cycle, and its development potential is worth paying attention to. More and more middleware and protocols are continuously innovating and evolving, making social applications more stable, secure, fast, and scalable.

At the protocol level, technologies such as storage, communication, content distribution, and reputation/credentials are continuously innovating. Decentralized social media protocols and middleware are receiving much attention, such as Nostr, Farcaster, and LensProtocol.

Privacy will become an important area of innovation. zk technology can be used to protect user transaction data and borrower privacy. However, it is necessary to balance the conflict between anonymity attributes and establishing 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, they also need to address issues such as user experience, scalability, and privacy protection. With continuous technological advancements, Web3.0 social products are expected to become more mature and widespread.