Plug Chain: What exactly is SocialFi?
SocialFi is defined as Social Finance, and as the name suggests, SocialFi is a combination of Social and Finance.
SocialFi attempts to shift the social economy into the decentralised world, with issuers rewarding participants via tokens. The consensus is that general public can gain more benefits through the decentralised finance and tokenisation of how social media works.
Leveraging blockchain technology and introducing token incentives to build decentralised social platforms has long been the goal of the cryptocurrency industry. Back in 2017, blockchain developers started venturing on the path to tokenising Social Media + Finance.
As DeFi continues to grow, more market opportunities are explored, and cryptocurrency users have a clearer and deeper understanding of Web 3.0 and decentralisation, we are now able to take a broader view of where SocialFi is going and build more imaginative protocols.
The cryptocurrency industry has raised expectations that Web3.0 will break the monopoly of traditional Internet giants and create a new free world. What we are about to witness is that the Internet will evolve with the needs and uses of its users and ultimately belong to them.
Web 2.0 gives creators a way to build reputations and businesses and “connect the world.” In the Web 2.0 era, users can not only read content, they can also interact with it. Facebook gained prominence in the early days of Web 2.0, and Facebook’s massive outage on October 5 — including its subsidiaries Instagram and WhatsApp was down for more than 5 hours — Reminding people that the web is embedded in “almost every aspect of existence” — retailers, news producers, health care providers and even religious services around the world have been disrupted.
Facebook is a declining company, and so is the entire Web 2.0 business model. As the Wall Street Journal reports in the Facebook Profile, that era is coming to an end.
Much attention has turned to the exciting world of cryptocurrencies. This is especially true for young people, who used the downtime during the Novel Coronavirus pandemic to figure out how to generate farm tokens, chat and express themselves with non-homogeneous tokens (NFT) on cryptographically specific platforms — Discord and Telegram.
The vast majority of Internet users use social networks, and having DeFi directly appear on mainstream social networks at home and abroad, such as Twitter, Facebook, Reddit, is probably the most critical step for DeFi and Web 3.0 to become mainstream users.
On August 17, 2021, the Social DeFi Alliance was founded, These include Mask Network Polygon, SushiSwap and Quickswap and a number of dapps with strong social attributes developed. The main objectives of the alliance are to launch more social DeFi projects suitable for social network users, promote the connection between Web 2.0 and Web 3.0, guide more users of Internet social platforms to access DeFi, and promote the large-scale application of Web 3.0, etc.
DeFi → GameFi → SocialFi. It’s an evolutionary path, and if you take Fi out of it, it’s almost surprisingly similar to the way the Internet evolved — from a community of people, to gaming, to people interacting in games.
For 19 years, DeFi has built a self-consistent economy for linked games, where players and developers can share profits from the ecosystem. The same is true with SocialFi, which builds a self-consistent economy for its users, where everyone benefits by demonstrating their value.
SocialFi is trying to solve two kinds of monopolies: the monopoly of traditional social platform giants over content creators, who only get a small percentage of the economic revenue, and the monopoly of ordinary content creators by people with a lot of social influence.
SocialFi was founded on the premise that all economic activity was open and transparent, allowing for more gameplay and models. On the contrary, traditional social platform companies that monetise their users’ contributions, users who spend a lot of time and effort don’t receive any direct rewards. SocialFi turns users into direct beneficiaries, receiving equivalent incentives for their effort or time.
Therefore, SocialFi is all about demonstrating individual value. Only by enabling individual creative content and social influence can more individuals benefit from the creator economy and the value ecosystem of SocialFi can grow and expand.
SocialFi’s market space is even more unimaginable than GameFi’s. As humans, we can leave the game, but we can never leave the social network as we need human interaction.
At present, SocialFi is in its early stages of development, and most ecological participants are spreading concepts and updating technologies based on Social tokens. There are few platforms that are classified by SocialFi concept alone. In addition, some projects have overlapping areas with concepts such as NFT and GameFi.
The growth potential of SocialFi
The best example of SocialFi’s future potential is the relationship between Elon Musk and the $DOGE ecosystem.
Every time Musk tweets about $DOGE, the value of $DOGE will rise due to his influence on the social platform, affecting tesla’s market price. This Meme culture develops with distinctive content style and extremely fast propagation speed. In the Doge series ecology, there has been the “Doge++” project featuring “social mining token”.
The effect is not limited to $DOGE either. On many occasions, Elon Musk has made positive comments about a cryptocurrency on social platforms, and its market value has increased significantly.
This is in line with SocialFi’s quest to shift to decentralisation along with social influence, enabling both participants and issuers to benefit directly from it through social tokens.
Twitter has recently been experimenting with SocialFi in a different way. Twitter is extending its “Tip Jar” feature, which it launched earlier this year, to allow users to Tip content creators in Bitcoin, or “tips.” Twitter is also testing a new feature that allows users to add bitcoin or Ethereum addresses to their profiles so they can receive cryptocurrency rewards through the “Tip Jar” feature.
Although this way, not completely accords with the definition of SocialFi, but this allows the Twitter social ecological circle and the relationship between the encrypted currency be more closely integrated. Twitter even has plans to launch its own social platform tokens for platform of management and maintenance.
SocialFi’s ecological classification and representative types
Currently, SocialFi is in its early stages of development, and most ecosystem participants are spreading concepts and updating technologies based on Social tokens. Few platforms are categorized by SocialFi concepts alone, and some projects have crossover areas with NFT and GameFi concepts.
On The Coingecko platform, 33 types of Social tokens are included with a relatively clear “Social Money”, and on The Zerion platform, 18 types of Social tokens are included according to the classification of Social tokens.
The current mainstream definition of Social Tokens is “Tokens that are supported by a person’s reputation, brand or community.” In addition, social tokens are built on the premise that their community value will continue to rise, among which casting, distribution and content capitalisation are the mainstream project concepts at present.
Most social tokens are based on ERC-20, which mainly extends technology and innovates projects from four main directions of distribution mode, asset preservation, token model and community management. In terms of functions, it can be divided into personal tokens, community tokens and social platform tokens.
Here are a few typical SocialFi tokens today, based on their capabilities.
I. Personal tokens
ROLL (Creator Token)
ROLL is one of the oldest social coin offering platforms. Under the platform’s launch model, ROLL creates ERC-20 tokens on behalf of users, which is a personal social token for content creators. Each individual social token has a supply of 10 million, of which 2 million are issued directly to content creators, 1.2 million belong to ROLL, and the rest will be unlocked linearly every month for three years. ROLL also provides a storage and trading platform.
So far, 200 content creators have issued their own social tokens through ROLL.
Whale is a mature personal token. It is issued by WhaleShark, an individual buyer, on the Roll platform, and its token value is calculated based on the NFT assets held by WhaleShark. Whale allocates 50,000 tokens a month for NFT acquisitions, donations to artists, team salaries, community events, and more, and keeps records through the Discord community.
In addition, creators can earn Whale by pledging their NFT work, or sell their work for Whale on Opensea.
RALLY (Creator Token)
RALLY is one of the early well-known social token issuance platforms, which features the ability to combine its native governance token RLY with the creator’s social token and mint new personal tokens, but the conversion of personal tokens must be done through RLY.
RALLY uses a Layer2 solution to optimize real-time transactions, and the token-holder has management rights over RALLY Network. RLY is currently available for liquidity mining at Uniswap and Balancer.
Mirror provides a platform for every article to have “NFT+ governance” properties from a content financialization perspective, where the content can be invested, traded, and governed. Creators can launch crowdfunding under the article if they meet the conditions, and users can get it if they participate in crowdfunding. Each transaction of NFT share token “Article NFT” is linked to investors’ dividends. In addition, the invitation token “WRITE” is used to create a column and the holder is entitled to vote. Under certain platform preset conditions, “WRITE” can also serve as a credential of admission.
Yup is a protocol that tracks social activity and behavior, tokenizing social activity such as likes and comments to influence content quality. In the platform, each user and content address (URL link) will be assigned a certain influence score, and the platform will allocate rewards to content with more social value based on users’ social behaviors such as likes and comments. Content producers and middlemen can earn assets.
Karma DAO is a very typical DAO community, which originated from the social experiment of cryptographic fans. It aims to create a community that shares investment ideas, provides insights and advice, leads the community, helps raise funds for projects, hosts virtual meetings and more. The main value of a community is information and insight.
The Karma DAO is managed by issuing the community’s exclusive token $Karma, which is also a necessary condition for the entry of community members. Members with 200 $Karma can enter the private group to chat and communicate.
Social platform tokens
Zora defines its agreement as a “common market agreement for media ownership.” The platform allows creators of art, articles or music to issue their own tokens. Zora is also the co-issuer of RAC community tokens. Currently, Zora makes social media clients, and the platform attributes are more NFT casting.
About Plug Chain
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