Opportunities and Mission of Web3 Social

Recently, the Web3 discourse is filled with hostility, as if it were a large field of leeks. But in my opinion, Ponzi is neutral; it is a financing technique that reduces project operating costs and serves as a means to support the ultimate success of the project. Whether in DeFi, social, or other arenas, there have always been builders who continue to strive. As long as the pace of progress does not stop, the Web3 revolution has not failed. All technological innovations emerge in waves, and short-term downturns are not sufficient to prove that the industry lacks prospects.

This article reviews the achievements of Web3 builders in the social field over the past 8 years from a developmental perspective,整理经验教训, seeking potential opportunities and blueprints. Although Web3 social has not fully matured, the industry's development results are noteworthy. As Web3 technology continues to advance and the cost barriers keep lowering, the emergence of real products may very well be happening right now.

The Fundamental Demand Theory of Web3 Social Networking

Any successful product is built on solid demand. The most criticized aspect of Web3 projects is their inability to integrate with the real economy. To break the prejudice that "Web3 is just for harvesting leeks", we need to fundamentally prove the demand for social interaction in Web3.

Humans are social animals with social needs. This conclusion has been repeatedly demonstrated by social products. People need to establish connections with others, perceive the emotions, attitudes, and mental activities of others through these connections, and receive feedback to adjust their own emotional cognition. This need is as essential as eating, drinking, and breathing; it is something that humans cannot live without and is ingrained in our genes from thousands of years of evolution. This is the basic need for social interaction, which can be summed up as connection, mental interpretation, and self-coordination.

Holding tokens is a brand new way of connecting. An open and verifiable database expands the dimensions of information we obtain from connections. A brand new information environment will foster entirely new social relationships and interaction methods.

The psychological motivations behind most social behaviors on the internet can be summarized as: self-presentation, emotional venting, and the need for recognition. Compared to traditional offline socializing, the internet world has created more social scenarios through multimedia. The internet has evolved from forums, BBS, chat rooms to blogs, instant messaging (IM), social media, and gaming spaces. These new scenarios encompass different interpersonal relationship networks, content, and presentation methods, leading to the emergence of many successful projects.

Looking at the development of social networking on the internet, economies of scale are a significant feature. Historical experience tells us that social projects or products that cannot establish economies of scale in social activities targeting specific groups and purposes cannot survive.

Compared to the global web2 social giants with millions of concurrent users, the scale of Web3 social is even less than a fraction of that. Economies of scale are a mountain; if scale economies cannot be formed in a certain scenario, one cannot escape the outcome of subsidizing to death. The scale of social networks and content determines whether social nature and motivation can be better realized. How can products without scale help users expand their social connections? How can personal display be achieved, and empathy be reached with others?

The development direction of Web3 has been set since the concept was proposed. In short, it is an industrial ecosystem supported by a trustworthy and open data environment and a financial environment backed by tokens. How does such an environment give rise to a new industrial pattern? With underlying information support across databases and organizations, the ability to freely choose front-end, composable, and plug-and-play social interfaces is a unique advantage of Web3 social. Tokens are typical characteristics of Web3, where social interactions support token issuance, and the core content is the quantifiable rights interaction through tokens, making the organization of social relationships a unique application scenario of Web3 social.

In recent years, the Web3 industry has really put in a lot of effort to gain competitive advantages in the local social market.

The Development Context of Web3 Social

This chapter aims to demonstrate that Web3 social is continuously progressing, further illustrating the industry's accumulated experiences and lessons, as well as the ongoing advancements in technology that continuously bring us closer to the singularity of industry explosion.

The advantages provided to entrepreneurs by the Web3 environment have led to two parallel trends in the development of social projects:

1. How to develop decentralized social technology standards
2. How to Build Token Consensus Through Social Interaction

Competition of Decentralized Social Technology Standards

If we consider humans to be social animals, our information input determines what kind of person we are. Therefore, the power of internet social platforms is immense. We can hardly imagine the serious consequences of handing this power over to companies and governments. Losing sovereignty over social information means we also lose the freedom of cognition and choice. The Facebook personal data leak scandal led by Cambridge Analytica tells us how easily our will can be manipulated. We and future generations need to have control over our own data sovereignty. Therefore, decentralized social technology solutions will be a necessity in the future.

To achieve decentralized social networking, breakthroughs must be made in communication protocols, data, and applications. The communication technologies used to achieve global consensus in blockchain may not be suitable for decentralized social networking communication. Therefore, based on the experience of STEEM, new projects like Bluesky, Nostr, Lens, and Farcaster have all provided their own decentralized social protocols. By sacrificing some degree of data decentralization, all protocols have made significant progress. On any given protocol, mimicking web2 social tools is no longer an issue, and even due to achieving decentralization, users have greater autonomy. Users have the power to maintain their intangible assets within the system. However, as mentioned earlier, Web3 businesses face a tremendous scale disadvantage.

Technology is not the issue. The challenge faced by all project parties proposing solutions is how to move the mountain of economies of scale blocking the road to success. To overcome this disadvantage, token incentives have become the most direct means for the vast majority of projects in the short term.

Token incentive revolution encounters obstacles

The birth of tokens is like opening Pandora's box. From the moment all web3 users step into the industry, they are forced to face a complex financial environment. For project teams, adopting tokens can use users' desires as a subsidy, reducing the operational costs of the project.

The revolution of token incentives faces 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.

These two issues have not been fully resolved to this day. We introduce a case that helps us understand.

The STEEM blockchain can be considered a pioneer of the entire Web3 social industry. To this day, not only do many of the concepts and structural designs it proposed continue to be imitated and referenced by current projects, but it has also nurtured a group of blockchain application teams and projects. In 2016, the STEEM blockchain initially made innovative attempts in multiple dimensions such as token incentives for content, token incentives for real-person curation, data availability layers, and account hierarchical security.

Applications built on the STEEM blockchain are a form of social media, where the quality of media content is determined by users weighted by the amount of tokens staked. In the early stages of the project, the founding team had an absolute advantage in both reputation and the amount of staked tokens. At that time, content production and filtering recommendations based on token staking weight were effective. Like the vast majority of projects that adopt token incentives, the huge wealth effect attracts swarming witches. However, the token staking on the STEEM blockchain includes punitive power, which can provide a degree of immunity against witch attacks.

This validity is based on the centralization of assets and power, as well as the solidity of consensus. When the founder BM left, the founding team fell apart, and the project was sold to Sun Yuchen, a collapse of consensus occurred. In the early stages, the collapse of consensus led more individuals to choose witch attack methods to profit: token holders liked each other, and proxy mining ran rampant. In the later stages, when algorithm recommendation systems and AIGC technology matured, this content production and recommendation system based on token-weighted voting reached its moment to exit the historical stage. Today's top social media platforms have achieved personalized content for each user; this refined content selection is something that human resources combined with purely content-tag-based sorting and pushing cannot reach.

After STEEM, many projects have used token issuance to accelerate the platform's scale expansion, like Torum, BBS, and any project that wants to scale tends to adopt token incentives. Of course, later there are also projects like Lens protocol that rely on expected free-riding. These incentives violate the element of "non-monetary rewards" in social interactions. Experiments show that external material rewards can reduce intrinsic psychological rewards, which leads to the mixing of non-social content in social content. Social links are information channels, and the value of social platforms lies in aggregating information within these social channels. However, this sand-mixed incentive instead leads to lower social efficiency. A channel that is already information-scarce has to face even more noise, and decline is a natural outcome.

Like Degen on Farcaster, a part of the tokens is sent out as rewards. This incentivizes social projects in web3 with meme tokens, focusing on the unique financial functions of ( rather than content creation or recommendations ). By introducing the financial attributes of crypto social, it creates a wealth effect and triggers ecological prosperity. A platform can only have one token, but it can have countless meme tokens. Meme tokens can fail, but platform tokens cannot. Using meme tokens to boost social projects will become a superior token incentive strategy for platform projects. The wealth discussion of Degen, combined with the innovative possibilities on Frames, has attracted more and more builders to participate in Farcaster, triggering the ecological prosperity of Farcaster. It can be said that so far, I personally believe: this is a classic operational battle. The ecological emergence brought by this operation cannot be ignored. So far, the ecology has already produced tools including NFT piggy banks, various streaming ( voice chat rooms, short videos, GIFs ), launching platforms, and more. Although I have not found signs of Farcaster breaking through Lens's business boundaries ( and the current industry bottlenecks ), this emergence is worth paying attention to.

Content self-revolution stage setbacks

Web3 emphasizes decentralization, which in business means eliminating monopolies.

The starting point of Web3 social should be around 2016-2017. At that time, Web2 social products were already developing rapidly. In the previous two cycles, social projects were all focused on the narrative of content autonomy. Various projects were attempting to put content "on-chain," and based on the content "on-chain," they could work on content assetization.

STEEM, born in 2016, has fallen behind due to the disintegration of its project team and slow development progress. Although it implemented content on the blockchain at the time of its launch, it lacks an EVM environment and cannot run smart contracts, leading to its gradual decline after the DeFi summer that began in 2020. The leading position in content on the blockchain has been taken over by Mirror. The selling point of Mirror is that it provides a relatively user-friendly text content editing environment. Users can publish their text content by signing with their wallets. Content is on the blockchain and cannot be tampered with. Other users can subscribe to and follow a specific account. Additionally, content can be minted into NFTs and traded in the NFT market. So far, this project continues to operate, although traffic has decreased; however, some Degen players are still using the project to publish content and engage in NFT minting activities.

Mirror is an excellent web3 product that embodies the spirit of minimalism in its design and makes great use of a trustworthy and open database. Anyone can assert ownership of content data on the internet through wallet signatures. The asserted content can be issued as NFTs and traded in an NFTfi environment within the EVM ecosystem. The essence of Mirror's user attrition is 1. Compared to traditional Web2 content operators, it not only lacks operational capability but also, written content, especially lengthy discourses, inherently lacks traffic, making it a discarded relic of the era of garbage culture. During the same period, there are also projects focusing on putting audio and video content on-chain. Without discussing the incentives for content.