One of crypto's niche concepts that seems to have been lost in the noise of exploit-focused project developments of recent times is SocialFi.
SocialFi is a blend of social media and decentralized finance. How this is integrated can differ across platforms. For instance, some SocialFi apps may simply focus on offering a decentralized and immutable storage solution for social contents + an integrated DeFi wallet that allows peer-to-peer monetary transactions between users of the platform.
Others may take a step forward by offering content-layer incentives, like what we have on Hive with the rewards pool. At the end of the day, all SocialFi offers users a platform for social interactions and an integrated wallet solution for censorship-resistant transactions or payments.
Due to the failures of popular SocialFi apps like Friend.tech, the concept seems to have simply gotten lost as people moved to the next shiny project.
The problem Friend.tech had is that it incentivized scammers and offered no fair playing field. By launching an incentivized social platform without a unified economy, friend.tech made it easy for influencers(which includes lots of scammers) to capitalize on their existing network of gullible followers on web2 social platforms like X.
In my opinion, friend.tech was the worst kind of SocialFi to exist and it's still surprising that it took off the way it did, maybe a case of internal players running initial interactions to build hype?
It was built on Base after all and that's an ecosystem with enough financial pull. Nonetheless, given how unsustainable it was and how it was open to optimizing to be a true SocialFi, it's death was inevitable — not that the developers cared after making their money.
SocialFi to merge e-commerce and payments
Social platforms are fast becoming a sort of town square where people gather and discuss a variety of things across the global.
As the internet gears for a transition from web2 to web3, social interactions will be reshape by SocialFi.
By blending social media with decentralized finance, we eliminate the need for banks in our every day monetary transaction and essentially make payments much more flexible.
Jack Dorsey, in a recent report on Cointelegraph suggests that the privacy messenger, Signal, adopts Bitcoin payments. Signal reportedly already has an integrated payment system that's based on an ERC-20 token and Jack's suggestion earns support from former PayPal president David Marcus, who wrote that “all non-transactional apps should connect to Bitcoin.”
Surely, Signal is not a full-fledged social platform as it is just a privacy messenger, but it's a social app nonetheless.
By having an in-app payment system for users, applications like this would make needing to moving from social apps to bank apps just to make payments a thing of the past.
With SocialFi, we'll have this solution in a way that full ownership, control and flexibility is prioritized. Users will be able to generate payment requests that appears a message bubbles and paying users can easily click to finalize the payments in a peer-to-peer manner.
When a system as this is in place, the only logical next step is for businesses to bring their products and services aboard. This is where e-commerce platforms and individual stores and companies that would usually operate on stand alone frontends will now have the ability to integrate with Social platforms and promote their businesses directly to users who are just a few clicks away from making payments without leaving the apps they are spending time on.
What people don't understand about crypto and blockchain is that at its core, this technology seeks to unify systems without centralizing any parts of it. SocialFi will accelerate e-commerce as it merges payments and a marketplace for businesses across the global access consumers that can place orders and make payments within few seconds.
It's about making every day operations as flexible as possible by placing them within the apps that we use more frequently.