SocialFi Track Analysis: Pioneers of the Next Generation Social Revolution

SocialFi, as an emerging field capturing value in social networks through blockchain technology, is still in its early stages of development. Although there has not yet been a true killer application, its potential should not be underestimated.

The anonymity of the Web3 world allows for the separation of online traffic and offline life, lowering the threshold for becoming an opinion leader. SocialFi projects are expected to form competitive advantages against traditional social media in the future.

The current total market value of SocialFi tokens is approximately $1.7 billion, accounting for only one-thousandth of the total cryptocurrency market value, which is significantly lower than mainstream sectors like GameFi and NFTs. However, considering the strong monetization ability of Web2 social traffic, SocialFi still has great growth potential in the future.

The development of SocialFi can be traced back to 2017, when a number of early projects such as Steem emerged. The year 2021 can be regarded as the inaugural year of SocialFi, with several projects completing financing and remaining active to this day. In 2023, Friend.tech briefly gained attention with its innovative model, but its token economics design was rudimentary, and the hype has significantly decreased.

Despite the trillion-level market size of the SocialFi track, users still face significant resistance when migrating to new platforms. Currently, Web3 communities mainly use traditional social software, and the scale effect is particularly evident in the social field.

SocialFi projects are mainly divided into two categories: social protocols/graphs and social applications.

In terms of social protocols, Lens Protocol utilizes ERC-721 to NFT social activities, fully embodying the spirit of Web3. Farcaster, on the other hand, adopts a three-tier architecture, sacrificing some decentralization while focusing more on recreating the smooth experience of traditional social media. CyberConnect, as one of the social graph projects with the largest number of users, has gained certain advantages through multi-chain deployment.

In terms of social applications, Phaver is based on the Lens protocol, achieving a dual incentive for high-quality content creation and discovery through a unique incentive mechanism. Warpcast, as the flagship project of the Farcaster ecosystem, closely replicates the experience of traditional social platforms while integrating unique Web3 elements, lowering the participation threshold for users.

Future SocialFi projects need to think about how to spread decentralized social communication to a broader audience while applying new technologies. On one hand, it is essential to optimize operational processes and reduce user learning costs; on the other hand, it is important to utilize the unique token mechanisms of Web3 to incentivize quality content and creators, achieving long-term user retention and positive feedback loops.

SocialFi has inherent advantages in privacy protection and data value distribution. As users' demands for personal privacy and freedom of speech continue to grow, SocialFi is expected to usher in breakthrough developments in the near future, becoming a pioneer of the next generation social revolution.