Opportunities and Mission of Web3 Social

Recently, the discourse around Web3 is filled with negativity, as if it were a large field of leeks. In my view, Ponzi is neutral; it is a financing technique that reduces operational costs for projects and a means to safeguard the ultimate success of a project. As long as the pace of advancement does not stop, the Web3 revolution has not failed. All technological innovations emerge in bursts, and a short-term slump is insufficient to prove that the industry lacks prospects.

This article will outline the achievements of Web3 in the social field over the past 8 years from a developmental perspective, organizing experiences and lessons learned, and seeking potential opportunities and blueprints. Although Web3 social has not yet fully matured, its developmental results are noteworthy. As technology continues to advance and the cost barriers decrease, the emergence of genuine products may be happening right now.

The Underlying Demand Theory of Web3 Social

Any successful product is built on solid demand. Humans are social animals with social needs. This conclusion has been repeatedly demonstrated by social products. People need to establish connections with others, perceive others' emotional attitudes and psychological activities through these connections, and obtain information feedback to correct themselves. This need is as essential as eating, drinking, and breathing; it is engraved in the genes of human evolution.

Holding tokens is a brand new way of linking. An open and verifiable database expands the dimensions of information obtained from links. A brand new information environment will nurture new social relationships and interaction methods.

The main psychological motivations for online social behavior include: the need for self-presentation, the need for emotional venting, and the need for seeking affirmation. The internet has created more social scenarios through multimedia. From forums, BBS, chat rooms to blogs, instant messaging, social media, and gaming spaces, these new scenarios encompass different interpersonal relationship networks, content, and presentation methods, resulting in a number of successful projects.

Economies of scale are a significant characteristic of internet socialization. Projects that cannot establish economies of scale in social activities aimed at specific groups and purposes struggle to survive. Compared to the millions of concurrent users of global Web2 social giants, Web3 social platforms barely reach a fraction of that scale. Economies of scale are a mountain; without achieving them, it's hard to escape the fate of being subsidized to death.

The direction of Web3 development has been set since the concept was proposed: an industry ecosystem supported by a trusted and open data environment, as well as a financial environment backed by tokens. How does such an environment foster a new industrial pattern? With underlying information support that crosses databases and organizations, the ability to freely choose a modular and pluggable social interface is a unique advantage of Web3 social. Tokens are a typical feature of Web3, where social support for token issuance and the quantification of rights interaction through tokens serve as the core content, while the organization of social relationships represents a unique application scenario for Web3 social.

In recent years, the Web3 industry has really gone to great lengths to gain scale advantages in the local social market.

The Development Context of Web3 Social

The advantages provided by the Web3 environment for entrepreneurs have led social projects to present two parallel development trends:

1. How to develop decentralized social technology standards
2. How to Build Token Consensus through Social Media

Competition of Decentralized Social Technology Standards

The power of internet social platforms is immense. We cannot imagine the severe consequences of handing this power over to companies and governments. Losing sovereignty over social information means losing freedom of cognition and choice. The Cambridge Analytica scandal involving Facebook showed us how easily our will can be manipulated. We and future generations need to take control of our data sovereignty. Therefore, decentralized social technology solutions are an essential need for the future.

To achieve decentralized social networking, breakthroughs must be made in communication protocols, data, and applications. The communication technology used for global consensus in blockchain may not be suitable for decentralized social communication. Therefore, based on the experience of STEEM, new generation projects like Bluesky, Nostr, Lens, and Farcaster have all proposed their own decentralized social protocols. By sacrificing some degree of data decentralization, all protocols have made significant progress. It is no longer a problem to imitate Web2 social tools on any protocol, and even due to the realization of decentralization, users have greater autonomy. Users have the right to maintain their intangible assets within the system. However, as mentioned earlier, Web3 businesses face a huge scale disadvantage.

Technology is not the problem. The challenge facing all solution-oriented projects is how to move the mountain of economies of scale that blocks the road to success. To penetrate this disadvantage, token incentives have become the most direct means for the vast majority of projects in the short term.

Token Incentive Revolution Hit a Snag

The birth of tokens is like opening Pandora's box. From the moment all Web3 users step into the industry, they are forced to confront a complex financial environment. For project parties, adopting tokens can leverage users' desires as subsidies, reducing project operating costs.

Token incentives face two major dilemmas in social environments:

1. The subjective value of social content is difficult to judge, and the effectiveness of token incentives is questionable.

2. Token incentives face witch attacks.

These two issues have not been completely resolved to this day; we introduce a case to help understand.

The STEEM blockchain can be considered a pioneer in the entire Web3 social industry. To this day, not only are many of its proposed concepts and structural designs still being imitated and referenced by current projects, but it has also nurtured a batch of blockchain application teams and projects. In 2016, the STEEM blockchain initially made innovative attempts in several dimensions such as token incentives for content, token incentives for real-person curation, data availability layers, and account hierarchical security.

Applications built on the STEEM blockchain are a form of social media, where the quality of media content is determined by users based on the amount of tokens staked as weight. In the early stages of the project, the founding team had an absolute advantage in both reputation and the number of tokens staked. At that time, content production and filtering recommendations based on token staking weight were effective. Similar to most projects that adopt token incentives, the huge wealth effect attracts a rush of "witches." However, the token staking on the STEEM blockchain includes a penalty power that can provide a certain degree of immunity against witch attacks.

This validity is based on the centralization of assets and power and a solid foundation of consensus. When the founder BM left, the founding team fell apart, and the project was sold to the infamous Sun Yuchen, leading to a collapse of consensus. In the early stages, the collapse of consensus caused more individuals to choose witch attack methods to profit: token holders liked each other, and proxy mining ran rampant. In the later stages, when algorithm recommendation systems and AIGC technology matured, this content production and recommendation system based on token-weighted voting reached the moment to exit the historical stage. The current top social media platforms have achieved user-generated content that varies from person to person; this refined content selection cannot be matched by simple content sorting and pushing based on human resources and content tags.

After STEEM, many projects have used token issuance to accelerate platform expansion, such as Torum, BBS, and any project aiming for scale has adopted token incentives. Of course, later there were also those like Lens protocol that relied on the expectation of free riding. These incentives contradict the "non-monetary reward" element of social interactions. Experiments show that external material rewards diminish intrinsic psychological rewards, leading to a mix of non-social content in social media. Social links serve as information channels, and the value of social platforms lies in aggregating information within these channels. However, the incentivization that adds "sand" leads to reduced social efficiency. It makes an already information-scarce channel face even more noise, making decline an inevitable outcome.

Like Degen on Farcaster, part of the tokens are distributed through tips. This is the unique financial function of Web3 social projects incentivized by Meme tokens, rather than content creation or recommendations (. By introducing crypto social financial attributes, it creates a wealth effect and triggers ecological prosperity. A platform can only have one token, but it can have countless Meme tokens. Meme tokens can fail, but platform tokens cannot. Using Meme tokens to boost social projects will become a more superior token incentive technique for platform projects. The wealth topics of Degen combined with the innovative possibilities on Frames have attracted more and more builders to participate in Farcaster, leading to the prosperity of the Farcaster ecosystem. It can be said that so far, I personally believe: this is a classic operational campaign. The ecological emergence brought by this operation cannot be ignored. So far, the ecosystem has produced tools including NFT piggy banks, various streaming ) voice chat rooms, short videos, GIFs (, and launching platforms. Although I have not seen signs of Farcaster breaking through the boundaries of Lens business ) and the current industry bottlenecks (, this emergence is worth paying attention to.

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) Content autonomous revolution stage setbacks

Web3 focuses on decentralization, which in business means breaking monopolies.

The starting point for Web3 social should be around 2016-2017. At that time, Web2 social products were developing rapidly. In the previous two cycles, social projects were focused on autonomous content narrative. Various projects were trying to put content "on-chain", and based on putting content "on-chain", they could work on assetizing content.

Launched in 2016, STEEM faced setbacks due to the disintegration of its project team and delays in development progress. Although content was already on-chain when the project launched, it lacked an EVM environment and could not run smart contracts, which led to it gradually falling behind after the DeFi summer that started in 2020. The leadership in content on-chain has been taken over by Mirror. Mirror's selling point is that it provides a relatively user-friendly text content editing environment. Users can sign and publish their text content using their wallets. Content is on-chain and immutable. Other users can subscribe to and follow a specific account. Additionally, they can mint content as NFTs and trade them on the NFT market. So far, this project continues to operate, and while traffic has declined, some Degen players still use the project to publish content and engage in content NFT minting activities.

Mirror is an excellent Web3 product that embodies the spirit of minimalism in its design and makes excellent use of a trustworthy and open database. Anyone can assert rights to online content data through wallet signatures. Once rights are asserted, the content can be issued as NFTs and traded in an NFTfi environment within an EVM context. The loss of users on Mirror fundamentally stems from 1, as compared to traditional Web2 content operators, who not only lack operational capability but also face inherent traffic issues with text content, especially long-form articles, which are often seen as discarded artifacts of the culture of garbage. At the same time, there are projects focused on putting audio and video content on-chain. Without discussing the ineffectiveness of content incentives, the overwhelming amount of data makes project operational costs unsustainable. Doing content business means doing media. You either have good content to attract users, or you have a large user base to attract good content. Simply providing a set of technical solutions cannot turn into a business.

At the end of 2013, another content-based project emerged. Bodhi is also a minimalist product. Inspired by Friend tech, Bodhi no longer mints NFTs associated with content at a uniform price, but instead adopts bonding curve technology to sell at varying prices; the more sold, the more expensive it becomes. There are also projects like CloudBit that forcibly replicate Web2 content on the blockchain to generate NFT assets. There are quite a few similar projects, all attempting to transform content into certifiable assets. However, what they cannot change is that in the internet era, content can be certified, but the information carried by the content can easily be transferred. In cases of direct theft or infringement, putting content on-chain does little to increase the cost of illegal activities. Therefore, directly issuing assets based on content as a value anchor has not yet found a good case.

Another reason why the market is insensitive to the assetization of content is that the timing is not right. Although rationality tells us that personal information is valuable, users actually do not care much about their own content sovereignty.

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) The New Journey of Attention Sovereignty: The Development of Content Recommendation Systems

The emergence of STEEM has encouraged and inspired a group of blockchain.