Deep Dive into the Opportunities and Mission of Web3 Social

The recent Web3 discourse environment is filled with hostility, with many viewing it as a place for harvesting profits. However, there have always been persistent builders in the Web3 social space. This article will outline the development of Web3 social over the past eight years, summarize lessons learned, and explore potential opportunities.

Although Web3 social is not yet mature, its development achievements are noteworthy. With technological advancements and lower barriers to entry, true products may emerge right before our eyes.

The Underlying Demand Theory of Web3 Social

Successful products are built on solid demand. Web3 projects are often criticized for failing to connect with the real economy; we need to fundamentally prove the demand for social interaction in Web3.

As social animals, humans have an innate need for social interaction, which has been repeatedly validated. People need to establish connections with others, perceive their emotions and attitudes, and receive feedback to correct themselves. This need is as essential as eating and breathing.

Holding tokens is a brand new way to connect. An open and verifiable database expands the dimensions of information obtained from connections. The new information environment will give rise to new types of social relationships and interaction methods.

Internet social behavior primarily stems from the needs for self-presentation, emotional venting, and seeking recognition. The internet has created more social scenarios, ranging from forums, instant messaging to social media, gaming spaces, and so on. New scenarios include different interpersonal networks and content presentation methods, giving rise to a number of successful projects.

Economies of scale are a significant feature of internet social interactions. Social projects that cannot establish economies of scale for specific groups and purposes struggle to survive. The scale of Web3 social is far less than that of Web2 giants, and overcoming this scale disadvantage is a key challenge.

The unique advantage of Web3 lies in its cross-database, composable social interfaces, as well as interactive scenarios that quantify rights through tokens. In recent years, the Web3 industry has made significant efforts to gain scale advantages in the localized social market.

The Development Context of Web3 Social

Web3 social presents two parallel development trends:

1. Develop decentralized social technology standards
2. Establishing Token Consensus through Social Networking

Competition of Decentralized Social Technology Standards

The internet social platforms wield immense power, which can lead to serious consequences. Therefore, decentralized social solutions are a necessity.

Decentralized social requires breakthroughs in communication protocols, data, and applications. New generation projects such as Bluesky, Nostr, Lens, and Farcaster have proposed their own decentralized social protocols, making significant progress while retaining some centralized attributes.

Technology is no longer the main issue; the key lies in how to overcome the disadvantage of scale. Token incentives have become a direct means for most projects.

However, token incentives face two major dilemmas in social environments:

1. The subjective value of social content is difficult to assess, and the effectiveness of token incentives is questionable.
2. Token incentives face witch attacks.

Taking STEEM as an example, it initially innovated in various aspects such as token incentives for content, data availability layers, etc. However, as consensus collapsed and witch attacks became prevalent, the token-weighted content production and recommendation system gradually became ineffective.

Many subsequent projects such as Torum and BBS adopted token incentives to expand their scale, but they contradicted the "non-monetary reward" element of social interaction. External material rewards can reduce intrinsic psychological rewards, leading to decreased social efficiency.

Degen on Farcaster creates a wealth effect by giving away part of their tokens as rewards, introducing the financial attributes of cryptocurrency socializing. This method of promoting social projects with Meme tokens is more advantageous. The innovative possibilities of Degen combined with Frames have sparked the prosperity of the Farcaster ecosystem.

Content self-revolution stage setbacks

The starting point for Web3 social should be around 2016-2017. Early projects attempted to put content "on-chain" and based on this achieved content assetization.

Projects like Mirror have implemented on-chain content that is immutable and can be minted as NFTs for trading. However, due to a lack of effective operation and user base, such projects find it difficult to scale.

The main obstacles facing content assetization are: in the internet age, content can be authorized, but the information it carries is easily transferable. There is currently a lack of successful cases for issuing assets directly anchored in content value.

Another reason is that the timing is not right. Although it is rational to believe that personal information is valuable, users do not actually care much about their own content sovereignty.

A New Journey of Attention Sovereignty: The Development of Content Recommendation Systems

STEEM has inspired a number of blockchain projects, and its token staking weighted voting mechanism for content ranking has been referenced multiple times.

Projects like Yup and Wormhole3 attempt to use token staking weights to reorganize recommendations for content on Web2 platforms. However, such simple sorting and tagging-based recommendations struggle to compete with intelligent algorithms.

Experience shows that even low-cost token incentives must encourage advanced production methods. Projects like Phavor are turning to using Web3 databases for cross-database recommendation middleware. The participation of on-chain data in system decision-making is the essential difference between Web3 and Web2 recommendation systems.

The "Subscription Stream Generator" created by BlueSky combines recommendation algorithms with communication protocols, allowing users to subscribe to custom algorithms, which is an innovative attempt.

The social module of Debank has great potential. Its badge and account display combined with streams have reached a level that many badge-focused projects find hard to achieve. In the future, integrating more on-chain activity data will help improve the accuracy of content recommendations.

Overall, the current development status of decentralized social networking is:

1. The token incentive scale strategy is not going well, and an independent user group with significant scale advantages has not been found.
2. Content on the blockchain and users' self-managed social assets are difficult to gain attention without scale.
3. The content recommendation system continues to develop, showing signs of hope after multiple iterations.

Possible breakthrough directions in the future are: seeking unique scale advantages among Web3 users, leveraging tokens to introduce financial attributes, and creating entirely new relationships and interaction possibilities.

Notable positive attempts include:

• TGbot: Directly integrates trading into social interactions, achieving a seamless connection between socializing and trading.
• Farcaster: Introduce asset issuance into social scenarios, attract more teams and projects to participate, and promote ecological prosperity.

Social Asset Tokenization

Another evolutionary path of Web3 social is to use social media for token issuance. For project parties, it is a means of financing, while for users, it may be a financial product. The key lies in how to establish consensus on token value and liquidity.

Historical experience provides three ways to establish value consensus:

1. Attention Tokenization: The elements of creating token attention include content, KOL, community, and wealth effect. Farcaster's frames, ERC404, Donut, etc. enhance the Meme attributes of token issuance from different technical levels. However, the consensus of Meme tokens is difficult to sustain, easily falling into a two-way spiral collapse of value and liquidity.

2. Tokenization of social relationships: Inject the value of social relationships into tokens, such as DAO projects and Friend.tech. Establish token value through the permission of social relationships.

3. Content Tokenization: Emphasize the relationship between tokens and content ownership. From Mirror, Paragraph to Lens, Farcaster, always focus on the assetization function of content ownership. However, there is currently a lack of practical applications, and we need to wait for most rights confirmation businesses to migrate to the blockchain before the economic value can be realized after the protection paths mature.

Bonding curves solve the liquidity cost problem for small-scale projects. The steep version of the bonding curve proposed by Friend.tech significantly reduces the operational costs of providing liquidity for individual tokens. Projects like Bodhi and DeBox are also experimenting with new pricing curves in their respective fields.

Pump.fun invented the segmented bonding curve, using different curves at different fundraising stages, which is an innovation in liquidity supply.

Opportunities and Mission of Web3 Social

Over the past two cycles, although Web3 social has continuously failed in exploration, the progress is still significant:

• From PC to mobile, and then to progressive web applications
• Wallet login from mnemonic phrases to MPC and abstract accounts
• Advances in blockchain infrastructure reduce bookkeeping costs and increase transaction speed.
• The social protocol layer actively builds layer 3 to achieve decentralized social usability.
• Network expansion enhances user experience, supporting more concurrent information.

Embedded social scenarios are an innovative direction for the industry. The characteristics of open-source projects and databases allow social functions to be seamlessly integrated into various interactions.

Many achievements have also been made in the middleware area, such as on-chain data integration, analysis, labeling, token behavior management based on game theory, and rich liquidity provision solutions.

Compared to the previous period, the infrastructure and tools are more完善, the number of Web3 natives continues to increase, and Meme tokens and NFTs educate potential users through multiple waves.

Social innovation still has opportunities, such as the recently launched ReelShort which focuses on short drama content, providing a low-cost social media platform solution for small-scale content creators.

Dopamine, the Opium of the Masses, the Antidote of Web3

Current mainstream social platforms rarely have pure text and image products, with streaming media dominating. Top short video platforms are filled with highly entertaining content, while the content on Web3 social platforms often lacks appeal.

To achieve the large-scale adoption of Web3 social, it is necessary to combine it with attractive content. The past content incentive models often overlooked the value of top creators. A possible future direction is to make every content creator the core of a small economic cycle, allowing them to freely choose suitable protocols and tools, and use tokens to enable other participants to join the economic cycle.

Blueprint of Web3 Social

Imagine a content creation and distribution solution that combines various Web3 technologies:

• Use decentralized media solutions ( like farcaster+livepeer) to create and publish content.
• Airdrop content tokens to early viewers
• Coin holders can influence the storyline, participate in character selection, etc.
• Directly sell related products in the frames.
• The character has an independent fan token system.
• Special content requires token combination to unlock
• The new coins issued in the play are simultaneously released in reality.
• Sell and lease overflow traffic through curation tools
• The edited content is synchronized and released on Web2 platforms.

This model will provide users with a richer participation experience, achieving interactive effects that are difficult to attain in Web2.

The Mission of Web3

The foundation of the Web3 revolution is liberalism. Its mission is to return the rights taken away by centralization to each individual, providing more choices rather than imposing ideals.

Conclusion

Web3 social is facing the dual challenges of immature technology and organizational form issues. In the future, it may center around content publishers and build an ecosystem around users and related service providers.

How to leverage Web3 technology to enhance user social interactivity is key. Finding better ways for content and communities to interact in a decentralized environment will determine whether Web3 social can truly attract traffic and take root.