SocialFi (Social Finance) is a hybrid of social media and decentralized finance (DeFi). It is assumed that thanks to the blockchain, users will be able to better control their own content and personal data, since SocialFi does not have centralized management bodies that could moderate and censor content, as well as collect information about users.
At the same time, the segment is not called DeSocial (decentralized social networks), but SocialFi (social networks + DeFi). That is, the point is not just to make friends with blockchain and social networks, but to monetize them using DeFi tools. Accordingly, the monetary component plays a crucial role.
Monetization in SocialFi
Of course, there are plenty of ways to monetize in the world of cryptocurrencies. Therefore, SocialFi cannot complain about the lack of ways to earn money. Moreover, Web3, as a rule, is also associated with complex systems of economic incentives, so SocialFi can be a deeply developed system where each participant can find their niche and income.
SocialFi Tokenomics
There is a huge scope for tokenizing the interactions of participants on social networks. SocialFi uses so-called "social tokens". These are utility tokens that are used in SocialFi ecosystems and applications.
In principle, the idea is not new. In the world of DeFi, as, by the way, in GameFi, we often see utilitarian tokens that are used to create an economic ecosystem within applications. Another step has been taken in SocialFi — social tokens exist not only at the application level, but can also be created at the user level. That is, creators can now develop their own small economies through social tokens.
For example, any celebrity or even an ordinary user can create their own token and a mini-economy that functions around it. The value of the token will be directly proportional to the user's social influence. Thus, a token, for example, from Elon Musk will be valued higher than the token of an ordinary user who simply created his profile on social networks.
Here is an example of how social tokenomics can work:
Only those who have a social token from the author can interact with his publications. That is, to have access to the content, you need to buy and have the necessary token in your wallet.
If a user wants to attract the author's attention, his post will be in the top of the comments when he has the largest number of social tokens of the author among other commenters.
Authors can set thresholds that will allow subscribers with a certain number of social tokens to send them messages directly.
Content makers who have many subscribers can create a subscription model in their social token for those who would like to have premium access to their content.
When a user wants to interact with someone's content, either through likes or through a repost, it costs them money.
That is, in fact, tokenomics in SocialFi can take a variety of forms, depending on how users decide to arrange it. This allows you to create a flexibly customizable platform for social interactions.
NFT
Non-interchangeable tokens (NFTs) can also play a key role in the identification and management of digital property rights, which will allow authors to make their online presence more verifiable and effectively manage their intellectual property, for example, by selling their works or receiving royalties.
By the way, SocialFi can give a second chance to digital art, which, after its boom in 2021, has lost a lot in capitalization and popularity. Moreover, in the world of SocialFi, NFTs can get new ways of their application, since from the very beginning of the history of NFT it was clear that the potential of this technology is much higher than the then and even current ways of using it.
DAO
DAOs are responsible for managing SocialFi platforms and ensure that no centralized authority controls user activity on the networks. The DAO should also not allow developers and others to modify the source code of SocialFi platforms. This means that every decision, including the allocation of economic incentives, depends entirely on the DAO.
On the other hand, the right to participate in the DAO is also monetizable. Voting rights in a decentralized organization responsible for a large SocialFi platform can be very expensive.
The most expensive SocialFi tokens
Actually, this brings us to the original question: which SocialFi tokens are the largest by market capitalization. Despite the fact that SocialFi is a relatively new concept, there are already projects with multimillion—dollar capitalization. Here are the most successful ones.
Theta Network
Theta is a specially created decentralized network related to video content. This platform provides both technical and economic solutions to the challenges faced by the streaming sector.
The Theta Network consists of two interdependent subsystems: Theta Edge Network and Theta Blockchain. The Edge Network provides massive GPU computing power for AI, video, rendering and other tasks, while the Theta Blockchain provides payment, reward and smart contract capabilities.
Theta Network operates on the basis of two tokens, THETA and TFUEL. The Theta Token (THETA) is a management token of the Theta protocol. THETA is used for staking and managing the Theta Network protocol. THETA emissions are fixed at 1 billion and will never increase.
Staking THETA and participating in management allows you to earn TFUEL. Theta Fuel (TFUEL) is an operational token of the Theta protocol. TFUEL is used for operations in the chain, such as payments for the use of computing power, video encoding/transcoding, 3D rendering, as well as for deployment and interaction with smart contracts.
The architecture of the Theta Network blockchain allows you to create decentralized application layers that perform certain functions, such as peer-to-peer streaming, live broadcasts, video courses, conferences, television, movies and more.
The capitalization of Theta is $1.52 billion — this is the most expensive SocialFi project so far.
Galxe
Galxe is a decentralized platform that provides Web3 identity and reputation solutions. It allows users to manage their credentials, reputation, and achievements in the Web3 ecosystem.
Galxe uses the blockchain to store and verify credentials, while ensuring their security. This allows users to have full control over their digital identity and reputation, as well as share them with others in a reliable way.
The capitalization of the project is $430 million.
Mask Network
Mask offers a decentralized option for functions from Web 2.0. As conceived by the creators of the project, its users will be able to enjoy secure, decentralized messaging, payments and files.
That is, Mask offers a smooth and convenient transition from things familiar in Web 2.0 to their decentralized counterparts.
The capitalization of the project is $248 million.
RSS3
RSS3 is an open source decentralized protocol that allows you to consume, create and manage decentralized channels of information. It is designed as a more flexible and extensible alternative to the traditional RSS (Really Simple Syndication) protocol, which is widely used to distribute web content such as blog posts, news articles and podcasts.
RSS3 offers a number of functions and tools for creating, managing and subscribing to decentralized information channels, including the ability to create and configure your own channels, find and subscribe to other users' channels, and interact with channels using decentralized applications (dApps) and smart contracts.
The capitalization of RSS3 is $168 million.
Decentralized Social
Decentralized Social (DESO) is a decentralized social network built on the blockchain. It is designed as a more open, transparent and censorship-resistant alternative to traditional centralized social networks.
DESO offers users a range of features and tools for creating, managing, and consuming content, including the ability to create and customize their own profiles, post and share text, images, and videos, subscribe to and interact with other users, and receive rewards for their activity.
The capitalization of the project is $150 million.
Conclusion
In general, it cannot yet be said that the SocialFi market is very developed. The ideas behind SocialFi are of great interest and could potentially change our understanding of social interaction on the Internet. But current and future projects still have some way to go before that happens.
On the other hand, it is not a fact that this path will be long. If, for example, the same TON follows the path of the closest and most effective integration with the Telegram messenger, or large social networks begin to tokenize, then SocialFi will be able to enter the mainstream very quickly.