In-Depth Analysis of Web3.0 Social Products: Current Status, Challenges, and Future Prospects

With the rise of Web3.0 social products, the number of users is showing an upward trend. However, the number of daily active users often sees a significant drop after the airdrop ends. How can project vitality be maintained? Can tokenization truly incentivize user participation? How can Web3.0 native applications stand firm in the face of token crashes in the secondary market? How to balance content moderation with decentralized social networking?

This article will start from the essence of social interaction to explore the significance, classification characteristics, existing problems, and optimization directions of Web3.0 social products, in order to help readers better understand the current situation and prospects of this field, and provide ideas to alleviate social fatigue.

The essence of social interaction is "interpersonal relationships + interaction", which can be roughly divided into interactions with acquaintances and interest-based interactions. Due to the limited user base of Web3.0 encryption, products focusing on interactions with acquaintances may be premature. Interest-based interactions, on the other hand, require creating relationships in new scenarios, and simply replicating and migrating social relationships is not feasible.

Why are Web3.0 social products attracting so much attention?

It is expected that by 2027, the number of global social media users will reach nearly 6 billion. Currently, the average internet user spends 144 minutes a day on social media and instant messaging applications. Although traditional centralized social platforms have a large user base, they also face issues such as data leaks, content censorship, and algorithmic bias.

Web3.0 social products are based on blockchain technology, enabling a decentralized social experience that ensures user data privacy and security. At the same time, they eliminate the censorship and algorithmic bias of centralized platforms, giving original content creators more autonomy. Therefore, Web3.0 social products are gaining attention and are expected to become one of the future trends in social media development.

As the dominant player in social media, Facebook has over 2.9 billion monthly active users. The four major platforms under Meta Platforms each have over 1 billion monthly active users, including Facebook, WhatsApp, Facebook Messenger, and Instagram. These large centralized platforms monopolize the entire industry. However, with the emergence of SocialFi, this pattern may change.

SocialFi aims to address the shortcomings of traditional social platforms. Jack Dorsey, co-founder of Twitter, once proposed three principles that social media should follow:

1. Flexible control for enterprises and governments;
2. Only the original author can delete their own created content;
3. It is best to implement the review through algorithm selection.

Based on the principles of fairness and decentralization, blockchain social media applications have surged in popularity by the end of 2022. This is evident from the sharp increase in the total number of active wallet addresses interacting with social DApps' smart contracts. Currently, the total number of smart contracts for social DApps is rapidly increasing, and the new trend of SocialFi could fundamentally change the landscape of the social media industry.

Common Categories and Features of Web3.0 Social Products

Current popular social and DID projects mainly include infrastructure, middleware, applications, and tools. The SocialFi sector is growing, with many projects based on social tokens that integrate DeFi elements, continually updating and upgrading technology to become SocialFi projects.

According to the issuance projects of Social tokens, they can be divided into the following categories:

1. Personal Tokens: Symbols representing status or connection participation, early creators or entrepreneurs can receive economic returns. Typical projects include RAC, ROLL, MeTokens, MintGate, and ALEX.

2. Community Tokens: Primarily issued and controlled by a group, usually governed by a DAO. They are used to incentivize community members' contributions, such as gaining access to the community, enjoying special information, etc. Typical cases include WHALE, Mirror, FWB, Cent, Yup, etc.

3. Minting and distributing platform tokens: Represents control over the platform, facilitating creators in issuing and managing tokenized communities. Typical projects include Chilliz, RALLY, BitClout, etc.

4. Third-party tools: such as Mask Network, bridge Web2.0 and Web3.0 in a "plugin" manner, allowing users to seamlessly send encrypted messages, cryptocurrencies, and DAPPs on existing social networks.

Issues Currently Existing in Web3.0 Social Platforms

1. High data storage costs: Decentralized storage requires more computational resources and storage space. Solutions include increasing block size or shard parallel processing, as well as storing identity information and read-write permissions on-chain, while other data is stored on off-chain servers.

2. Insufficient network effects: The user scale and activity level are low, making it difficult to find suitable social circles and communication partners. Attracting traditional users to use SocialFi applications still faces challenges and requires more time and resources for public education.

3. Cross-platform interaction difficulties: Differences in data formats, encryption methods, and verification rules between different protocols require the establishment of standardized rules. Users may prefer to stay within the initially chosen protocol, leading to the fragmentation of social networks.

4. Achieving a sustainable economic model: The main value capture methods include social behavior rewards and content creation incentives. However, there is a lack of content quality and diversity, as well as a lack of high-quality creation incentive mechanisms and objective review mechanisms.

5. Business expansion is highly competitive: Top influencers have become the target of various projects, and SocialFi hopes to tokenize social influence to create a self-consistent economic system.

Direction for Optimizing Social Products

In 2023, SocialFi remains one of the hotspots for the next cycle. Middleware and protocols continue to innovate, improving the stability, security, speed, and scalability of social applications. Decentralized social media protocols and middleware are receiving attention, such as Nostr, Farcaster, and LensProtocol.

Privacy protection has become an important area of innovation, and zk technology can be used to enhance the security and privacy of lending transactions. However, it is necessary to balance the conflict between anonymity and the establishment of social status.

In the future, Web3.0 social products need to explore innovative interaction methods and social scenarios to address issues such as user experience, scalability, and privacy protection. With technological advancements, Web3.0 social products are expected to become more mature and widely adopted.