SocialFi: A Blank Canvas for Web3 Social Apps
The winning web3 social platforms will leverage financialization as a core component of the user experience.
The best social networks feel like games. But today’s crypto-powered social apps are mostly uninspiring.
Instead of leaning into the blank crypto canvas for designing new types of social experiences, the most common crypto social apps I come across are aiming to be duplicate versions of Twitter, Discord, or Instagram—but with NFTs, open data, and embedded wallets. NFTs that allow you to own your own username, content, and digital assets will almost certainly be a keystone of the next social app, sure. But new social networks will not succeed if they simply skeumorphize our existing social apps.
Crypto apps building new and sticky social experiences should lean into what makes crypto exciting in the first place: financialization. After all, crypto’s original killer app is still internet-native financial rails and permissionless capital coordination.
The next killer crypto social app will leverage financialization as a core component of its user experience. And although a world where social media is financialized sounds dystopian to many, I’d argue that social media is already financialized, just indirectly. Everyone on social media is already playing what Packy McCormick has called the “Great Online Game,” a competition to build social capital and convert it into actual capital. Every time you log on, you opt-in to playing that game, either as an active participant or as a passive consumer of its benefits in the form of entertainment.
By participating in the social game—and by playing it well—anyone can build significant social capital. To a certain extent, social capital has thus been an equalizer, allowing individuals from unaccredited backgrounds to have their voices amplified. Social networks offer a more meritocratic mechanism for talented and hungry individuals to prosper where they otherwise would have remained obscure.
The path to monetizing social capital varies by network. Some of them tie payouts directly to social capital: Twitch, YouTube, TikTok, and Spotify, for example, pay people directly as their subscribers, views, and streams grow in size. Other social networks like Twitter, Substack, Instagram, Facebook, and Snapchat, provide users with the means of distribution and leave monetization up to the individual through add-ons like ads, affiliate marketing, and sponsorships.
The social games and economies of tomorrow will provide their users with ownership opportunities and more direct monetization mechanisms built around unique experiences. Open social graphs such as Lens have already facilitated over $6.2 million in economic activity through trading and collecting user media NFTs. Similarly, Link3, a web3 social platform built on top of the open social graph Cyberconnect, enables users to purchase and own their social profiles. To date, Link3 has facilitated hundreds of thousands in mint fees from user profile minting showcasing early desire for users to own their social namespaces.
Building the next great social game
What the next crypto social app will look like is hard to predict, but these are some of the imaginative SocialFi behaviors and experiences that will enjoy significant tailwinds:
- Multiplayer capital coordination schemes, like group-buying of NFTs combined with social experiences as we see in experiments like Forum, Lore, and Sail.
- Social games based on permissionless capital coordination through InvestmentDAOs, Juicebox, ConstitutionDAO, etc.
- Federated social experiences within unfederated social networks – permissionless social graphs can have subgroups based on token gated interest graphs, onchain credentials, social financial games
- Enhanced discovery experiences empowered by providing curators better platform incentives and monetization tools
- Onchain experiences that offer social status and enhance content (e.g. Sound.xyz music NFT purchasing requires signing and commenting into a song)
- New livestreaming formats that leverage programmable content, tokenized assets, and creator tokens
- Dynamic NFTs that are degradable (e.g. Stepn) or upgradable (e.g. ERC 6551) and provide unique perks in a network
- New crypto economic mechanisms and business models, including onchain micropayments and competitive minting, as Stealcam does with its reveals and steals. Platforms might also offer creator rewards tied to in-app economic activities like remixing and licensing.
The game of building and monetizing social capital online is evolving.
Many of the most successful web2 social media apps started as useful tools or apps with specific purpose-driven social experiences. Instagram, originally called Burbn, was a location-based check-in service with photos. Twitter’s initial 140-character content format was constrained, not by Twitter, but because the platform was built on top of SMS messaging. However, the short message format led to unforseen user behaviors like threads, retweets, hashtags, and @-replies. Facebook started as an exclusive network for college students, but became a global social layer and marketplace that facilitates billions in transaction volume. In other words, the platform social experiences were initially focused and limited but eventually morphed into larger social platforms.
Similarly, the winning social games of web3 will be the platforms that design opinionated social experiences and leverage the financial power of crypto primitives.
If you’re building a next-generation SocialFi app, my DMs are open.
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