The Current Status and Future Outlook of Web3.0 Social Products

With the rise of Web3.0 social products, the number of users continues to grow. However, after the airdrop ends, the daily active user count often declines sharply. How to maintain the vitality of the project? Can tokenization truly incentivize user participation? How to balance content moderation and decentralized social interaction? These are all questions that entrepreneurs in the Web3.0 social field need to consider.

This article will start from the essence of social interaction and explore the significance, classification characteristics, existing problems, and optimization directions of Web3.0 social products, in order to help readers better understand the current situation and prospects of this field.

The essence of social interaction lies in the relationships and interactions between people, which can be divided into interactions among acquaintances and interest-based interactions. Given the limited total number of Web3.0 crypto natives, products focusing on acquaintance interactions may be premature. Interest-based interactions require the creation of new relationships in new scenarios, and simply replicating and transferring social relationships is not feasible.

Reasons Why Web3.0 Social Products Are Gaining Attention

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

Web3.0 social products are based on blockchain technology, enabling decentralized social experiences that protect user data privacy and security. They can also eliminate the censorship and algorithmic bias of centralized platforms, giving original content creators more autonomy. Therefore, Web3.0 social products have become one of the important trends in the future development of social media.

Currently, a well-known social platform is a giant in the social media field, with over 2.9 billion monthly active users. A large technology company owns four social media platforms, each with over 1 billion monthly active users. These centralized giants have successfully monopolized the entire industry. However, the emergence of SocialFi may disrupt this situation.

SocialFi aims to address the shortcomings of traditional social platforms. A co-founder of a well-known social platform once 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 implemented 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 sharp increase in the total number of active wallet addresses interacting with social DApps' smart contracts. The total number of smart contracts for social DApps is rapidly increasing, and the new trend of SocialFi could fundamentally change the landscape of the social media industry.

Common Categories and Features of Web3.0 Social Products

The currently popular social and DID projects mainly include infrastructure, middleware, applications, and tools. The SocialFi sector is gradually growing, with many projects based on social tokens that integrate DeFi elements and continuously undergo technological updates and upgrades.

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

1. Personal Token: Token holders can access early fan groups, enjoy discounts or participate in events in advance, and receive merchandise, NFTs, etc. It symbolizes status or connection engagement, allowing early creators or entrepreneurs to obtain economic returns.

2. Community Tokens: Primarily issued and controlled by the community, usually governed by a DAO. Used to incentivize community members to contribute, such as granting access to the community and enjoying special information.

3. Minting and distributing platform tokens: Represents the control token for the platform, mainly facilitating creators to issue and manage tokenized communities.

4. Tool Projects: Provide third-party tool support for the operation of social token projects.

Issues Currently Faced by Web3.0 Social Platforms

1. High data storage costs: Decentralized storage requires more computing resources and storage space.

2. Insufficient network effects: The user base and activity levels are low, making it difficult to form strong network effects.

3. Cross-platform interaction difficulties: There is a lack of standardized data formats and APIs between different platforms, making data transmission and sharing difficult.

4. Sustainable economic model needs improvement: The content creation incentive mechanism and review mechanism need to be improved.

5. Business expansion is highly competitive: top Influencers have become the targets of competition among various projects.

Optimizing the Entry Direction of Social Products

In 2023, SocialFi will still be one of the hot topics of the next cycle. Middleware and protocols are continuously innovating, making social applications more stable, secure, fast, and scalable.

At the protocol level, continuous innovation in technologies related to storage, communication, content distribution, and reputation/credentials is occurring. Decentralized social media protocols and middleware are receiving significant attention.

Privacy protection will become an important area of innovation. zk technology can be used to enhance the security and privacy of lending transactions, but it is necessary to balance the conflict between anonymity and establishing social status.

In the future, Web3.0 social products need to explore more innovative interaction methods and social scenarios to address issues such as user experience, scalability, and privacy protection. With technological advancements, Web3.0 social products will become more mature and widespread.