When decentralisation meets connectivity! How can SocialFi ensure a step forward in the digital era- 

When decentralisation meets connectivity! How can SocialFi ensure a step forward in the digital era? 

It is no longer a secret that social media has turned into a money-making hotspot. Once used only for ensuring social interactions, social media is believed to have become an important part of businesses’ revenue generation. While there have been talks about social media being controlled platforms, it’s believed that the answer, going forward, lies in decentralisation implemented through decentralised finance (DeFi). In that context, the amalgamation of social media and DeFi has given rise to the term ‘SocialFi,’ which refers to a Web3.0 take on social media. “I believe SocialFi is a new concept and it is awaited how it will make an impact in terms of decentralisation. The Internet and social media seem to have empowered citizens globally regarding access to information and connecting individuals. Decentralisation is considered important because it can transfer the share of power from centralised entities to individual content creators,” Sachin Modi, co-founder and CEO, vHub.ai, a decentralised AI-based Software-as-a-Service (SaaS) platform, told FE TransformX.Sign Up to get access to the Financial Express Exclusive and Premium Stories.Register NowAlready have a account? Sign in

From what it’s understood, SocialFi ensures earnings for users through engaging in content-oriented transactions supported by blockchain. SocialFi enables content creators to get more revenue-based opportunities, through extra authority over their assets which enables one to dictate the kind of content they would want to put out. According to media reports, platforms are adding SocialFi features to their structure for the creation of passive income sources for their users. Activities which are taken into account for SocialFi’s implementation include yield farming, token staking, and liquidity supplying, among others. Seemingly, one of the reasons why SocialFi is being inculcated into earning prospects is over increased data privacy and ownership, as users can retain their data without needing to share it with anybody. Furthermore, other SocialFi-based benefits are believed to be content monetisation, decentralised governance frameworks, access to financial facilities, token-oriented engagement, among others.

Reportedly, the different SocialFi-based technologies include Peer-to-Peer (P2P) networking, which enables direct user-based interactions without the need for third-party members, distributed ledger technologies (DLTs), which refer to blockchain that ensures data authenticity through immutability, and cryptocurrency, which provides a token-based reward system for monetising content creators. According to Sprout Social, a software company, decentralised social media platforms which are currently active in the market are Lens Protocol, which is an Ethereum-oriented platform that supplies Web3.0-backed monetisation prospects, Minds, which is another Ethereum-oriented platform that enables algorithm creation in return for crypto-based rewards, Hive Social, which supplies a feed and profile drafting facilities including colour themes and text edit functionality, Threads, which is a Meta-created platform that allows content sharing and user-based interactions, Steemit, which is a blockchain-backed blogging platform that rewards users using its native token called STEEM, and Mastodon, which is an open-source, microblogging platform that allows exchange of GIFs, videos, images, among others.

Numbers provided by Future Market Insights, a market researcher, stated that the revenue from the worldwide decentralised social network sales was predicted to clock $12,132.2 million in 2023. The researcher also mentioned that the sector is expected to cross $101,200.8 million in 2033, at a 23.6% compound annual growth rate (CAGR) for 2023-33. As of January 3, 2024, (1.16 pm, Indian Standard Time), the total SocialFi market capitalisation stood at roughly $3.85 billion, at the back of an 8.9% increase in the last 24 hours, with regards to data provided by CoinGecko, a cryptocurrency data aggregator. The aggregator also mentioned that the 24-hour trading volume for SocialFi tokens stood at nearly $112.81 million. Moreover, future trends imply that developments around compatibility are expected to happen to ensure better data-based transactions, along with the growth of decentralised autonomous organisations (DAOs and non-fungible tokens (NFTs) to ensure a democratic digital economy. “I think decentralisation will take away the regulatory powers of platforms and make social media democratic. This asymmetry of power can be resolved with SocialFi, where creators should be able to have greater access to their audience and the private data of the audience is not shared with a centralised platform. SocialFi should bring power to such individuals and reward them monetarily as well,” Modi concluded.

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