Author: LianGuaiUL VERADITTAKIT; Translation: Huohuo, Plain Language Blockchain
In 2017, a group of researchers from MIT Media Lab claimed in Wired magazine that decentralized social networks were “never achievable” . In their article, they listed three challenges they believed were impossible to overcome in reality:
(1) The problem of attracting (and retaining) users from scratch
(2) Handling user personal information (or misinformation)
(3) Profitable advertising targeting users (how to monetize)
They believed that in these three cases, the economies of scale of existing tech giants such as Facebook, Twitter, and Google have had a profound impact and have already divided the market cake, leaving no space for new competition.
Fast forward to now, five years later, what was once considered “impossible” no longer seems 100% “impossible”. It seems that we are now in the dawn of a paradigm shift in the concept of social media networks. In these three challenges, we will explore new approaches in decentralized social (DeSo) to solve these problems, specifically divided into the following three categories: (1) Using open social graphs to solve the cold start problem
(2) Using identity verification and encryption technology to solve the problem of user identity
(3) Using token economic models and incentive structures to solve the revenue problem
01 Creating “Killer Apps”
The ultimate question for Web3 social as a vertical field is whether it can generate a new “killer app”. Just like the previously popular TikTok or Instagram, to provide a truly novel social experience and attract users on a large scale. Without this “killer app”, all the development of underlying infrastructure (such as decentralized social graphs and human identity verification protocols) would lose their intended purpose.
However, the problem with these “new social experiences” is that they are almost unpredictable. Despite people repeating the slogan of “building killer apps” over and over again, no one knows exactly what form this app will take—after all, there haven’t been many successful attempts to predict human behavior. In this article, I won’t attempt the impossible task of predicting what the next “killer app” in the social sphere will be. Instead, I will explore two strategies:
(1) Enhancing existing social experiences with Web3 functionalities and creating Web3 social communities
(2) Describing some projects that follow these potential innovation routes
02 Enhancing Existing Social Experiences through Tokenization
One way to build a Web3 “killer app” is to add new features to existing “killer apps” (mainstream social platforms that users are already familiar with). The most common form of these “Web3 new features” is tokenization elements in the form of X-to-Earn projects.
From the Reddit Community Points Program
One of the most interesting projects in this direction is Reddit’s Moons program, which was launched in May 2020 and rewards users who post and curate content on the subreddit r/CryptoCurrency.Reddit Moons is an ERC-20 Token launched on Arbitrum Nova, and its issuance is based on users’ Reddit “karma” calculated according to the upvotes and downvotes received by the user. Moons allow users to vote in community polls to decide on the future distribution of Moons and the overall direction of the community.
The overall tokenomic strategy of Reddit Moons has also received positive feedback from the community, with a monthly reduction in supply of 2.5% and an annual inflation rate gradually approaching 1%. Therefore, over time, the number of Moons obtained by users through “Karma” will steadily decrease, making Moons more scarce and increasing their value in the long run.
Reddit Moon Token Economics
Reddit is a particularly interesting case when it comes to integrating Web3 functionality, such as tokenization of Moons, into existing “killer applications”.Among all mainstream social media platforms, Reddit can be said to be the most decentralized and community-driven, as its unique “subreddit” structure allows these platforms to have a high degree of autonomy and self-regulation, rather than enforcing traditional top-down content moderation methods.
It can be said that these design decisions make Reddit one of the most suitable platforms for experimenting with Web3 mechanisms. In fact, Moons are just one example of Reddit’s innovative community points program, which allows subreddit communities to launch their own ERC-20 Tokens and even provides a Reddit Vault, based on Ethereum, for storing these tokens. In addition to Moons, the Brick Token of FortniteBR is another well-known example of this program.
As of August 2023, Reddit Moons have gained attention after being listed on several major CEXs, including Kraken.However, despite the exciting surge in token prices, the long-term success of this simple “X-to-earn” mechanism remains uncertain.
Based on the above data and price data from August 12th, the maximum income of the largest holder of Reddit Moons is about $4200, and the median income is about $0.9. This is a thought-provoking statistic that reveals one of the fundamental problems of the X-to-Earn model: you simply don’t earn much money, or at least far below the “life-changing money” advertised by such projects. Moreover, income tends to be skewed and concentrated among a few users, making it difficult for ordinary users to “earn” a lot of money, even if they participate in “X” activities. Ultimately, users may be disappointed with these meager earnings and gradually move towards collapse, as was the case with StepN in the past.
Therefore, for a simple “social earning” project, emphasizing “earning money” may not be sustainable in the long run.Instead, a novel social experience must be created for end users, a process in which users are willing to pay rather than receive rewards. The recent popularity of the friend.tech project on the Base network highlights this point. Friends.tech is essentially a “stock market for X (formerly Twitter) profiles,” where you can buy and sell “stocks” of profiles of X’s big V users. By owning a “share” of a big V, users can enjoy relevant access privileges (such as private chats and other exclusive benefits) and freely trade these shares.
Data and prices as of August 22, 2023, source: Dune Analytics
This novel social experience and the ability to tokenize through X followers have generated over 12,479 ETH and over 1.56 million transactions in the past few days since its limited invitation-only beta launch. However, there are still lingering doubts about whether Friends.tech can sustain this early momentum and pave the way for a new form of social experience through the tokenization of influential profiles, or if it will evolve into another “rug-pull” scam.
Coindesk specifically pointed out the project’s lack of effective privacy policies and documentation on data collection practices, as well as the absence of a roadmap or whitepaper. Additionally, it remains unclear how the platform and its influencers will uphold their commitment to “access” to their “shareholders,” thus truly creating a new form of social experience. Nonetheless, friends.tech remains an impressive experiment that transforms tokenization itself into a new form of social experience.
03 Building a Web3-featured social community
It is unnecessary to add Web3 features such as tokenization to existing Web2 social platforms, which are built on completely different profit models. Another approach to building a “killer social app” in Web3 is to start from scratch, self-developing from a unique crypto-native community and culture.
Phaver is a typical example of a Web3-featured social community. It is built on top of the Lens social graph (recently integrated with Cyberconnect’s social graph) and attracts the Web3-native community through integration with other Web3 social identity technologies such as NFT communities and soul-bound tokens. It is a platform with a unique dual-token model that employs a novel “credit” and “score” rating system, allowing users to earn rewards and privileges by leveling up on the platform.
Phaver credit system
“Credit” essentially represents a user’s credibility on the platform. Users can increase their credit by linking soul-bound tokens or NFTs to their accounts and through daily participation on the platform. “Score” is rewarded to users based on the quality and engagement of their posts and can be eventually exchanged for Phaver tokens. Importantly, the higher a user’s “reputation,” the more points they earn from their posts.
Because users need to link soul-bound tokens and specific NFT collections (such as Cryptopunks and Bored Apes) to gain “credit,” it provides a useful method to distinguish users from bots on the platform. In fact, it’s almost like a “proof of stake” but for social identity. Imagine how expensive it would be for a bot farm to purchase a Bored Ape for each bot just to gain high Phaver credit! Therefore, Phaver proposes that the “credit system” can be used to prevent airdrop bot farming and ensure that users are human without the need to scan any retinas.
From the above, we can see that Phaver has created a novel Token economy system to create a Web3 social community. However, for Phaver, like many Web3-related social applications, the main challenge is to expand beyond the native Web3 audience, to expand to a crowd that has no web3 experience and does not know what a boring ape or soul-bound Token is, while providing these users with clear reasons to use the platform. Although Phaver claims to follow the “web2.5” model, allowing users to register without a Lens configuration profile, most of Phaver’s “unique experience” heavily relies on Web3 industry knowledge, which comes with potential educational costs and becomes a major barrier to widespread user adoption.
Another famous project inspired by the Web3 community subculture is POAP, which stands for Proof of Attendance Protocol. It originates from the unique “conference culture” and annual global event series in the crypto field, such as ETHGlobal. POAP is essentially an NFT or ERC-721 Token that is minted through the POAP smart contract to digitally represent a user’s attendance at an event or conference and permanently store it on the chain. Since 2021, POAP has collaborated with internationally renowned brands such as Adidas, Vogue, Github, and the US Open tennis tournament, and has issued over 6 million NFTs of this kind. However, perhaps the most interesting part of POAP is how it serves as a social primitive, as a way to guide social networks and find others with similar interests and networks.
In addition, events, conferences, and conventions do not require specific Web3 knowledge to understand—it is easy to imagine implementing similar POAP-like mechanisms for various communities and subcultures, such as anime conventions, world expos, and national art museums. However, the core issue here is how to maintain the utility of these POAPs, whether through loyalty programs, trading opportunities, or exclusive events, in order to ultimately guide novel social communities and create a new form of digital social experience.
04 Conclusion
So how exactly can we create a “killer app”?
In the end, the long-term success of Web3 social lies in creating a new form of social experience, rather than replicating certain web2 mechanisms and simply claiming it is special because it is “on-chain” or “Tokenized”. Instead, a completely new experience is needed, especially one rooted in Web3 culture and inspired by Web3—whether it is the NFT community, asset Tokenization, or crypto conference culture.
More importantly, while Tokenization and other Web3 mechanisms allow for many new application designs, in order for “killer apps” to expand beyond the native audience of crypto, there must be a use case that is easy to understand (such as event attendance), instead of being filled with Web3 jargon and concepts. Essentially, the development of Web3 social must leverage the distribution and abstraction techniques of traditional social media platforms like TikTok or Instagram to achieve “viral spread”.
Because social media is ultimately a way for users to express their personality and personal preferences, any successful Web3 social media needs to have an open design space where users have enough “blank canvas” to create their own uses.
Often, the reason why social apps have “viral spread” is completely different from their initial goals. Taking TikTok as an example, the company could not predict the various fashion trends and challenges that would appear on the platform. The advantage of this platform lies in its open creative platform, which unleashes unlimited creativity for this application. Only when Web3 embraces this design decision, instead of focusing on financialization and on-chain imitation, can we truly begin to build a new “killer app” and promote Web3 social media to become the only “social” way.
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