Exploring the New Frontier of Web3 Social: Token Incentives and Digital Economic Ecosystem

In the Web3 social domain, innovation is continuously emerging. This article will explore how to utilize token economic models and incentive mechanisms to address income issues, and analyze the practices of some representative projects.

The Key to Building "Killer Applications"

The key to the success of Web3 social lies in whether it can create a new generation of "killer applications". These applications need to provide a brand new social experience to attract a large number of users. However, predicting what the next blockbuster application will specifically look like is extremely difficult.

This article will explore two possible strategies:

1. Add Web3 features to existing social platforms
2. Build a native Web3 social community

and analyze some projects that are implementing these strategies.

Enhance Existing Social Experience through Tokenization

A simple way is to add Web3 functionalities to mainstream social platforms, the most common being through tokenization, such as "X-to-Earn" projects.

Reddit's Moons program is an interesting case. Launched in May 2020, the program offers content publishing and curation rewards for users of the r/CryptoCurrency subreddit. Moons are ERC-20 Tokens issued on Arbitrum Nova, and the supply is dependent on the "reputation" users gain on Reddit.

The token economics design of Moons has been recognized by the community, with a monthly issuance reduction of 2.5%, bringing the annual inflation rate close to 1%. In the long term, the "ratio of prestige to Moons" is expected to steadily decline, increasing the scarcity and value of Moons.

Reddit is a unique case that integrates Web3 functionalities into an existing "killer app." The decentralized and community-driven nature of Reddit makes it an ideal platform for experimenting with Web3 mechanisms. In addition to Moons, Reddit has also launched a community points program that allows subreddits to issue their own ERC-20 Tokens.

However, the long-term success of the simple "post-to-earn" mechanism remains questionable. Data shows that the actual income of most users is negligible. This reveals a fundamental issue with the X-to-Earn model: the money ordinary users earn is often far lower than advertised.

Therefore, placing too much emphasis on "making money" may be unsustainable. Instead, new social experiences that users are willing to pay for should be created. The friend.tech project on the Base network is an example. The project is essentially a "stock market for X profiles," where users can buy and sell "stocks" of influencers to gain more access.

This novel experience of monetizing personal influence generated considerable trading volume even in the testing phase. However, whether the project can maintain its momentum and truly pioneer the tokenization of influencer profiles remains to be seen. Regardless, friend.tech demonstrates the potential of transforming tokenization itself into a new type of social experience.

Build a Native Web3 Social Community

Another approach is to build from scratch, starting from a unique crypto-native community and culture.

Phaver is a typical "Web3 native" social community. It is built on the Lens social graph and attracts Web3 native users through the integration of NFT communities and soulbound Token identity technologies. Phaver adopts a dual Token model, including a "reputation" and "points" scoring system, where users can earn rewards and privileges by leveling up.

"Reputation" reflects the user's standing on the platform and can be enhanced by binding soul-bound tokens or NFTs, as well as daily interactions. The "points" earned by users depend on the quality of posts and the level of interaction, which can ultimately be exchanged for Phaver tokens. The higher the reputation, the more points are earned.

This mechanism provides an effective way to differentiate between users and bots, almost serving as a "proof of social identity." Phaver suggests that projects can utilize its "reputation system" to prevent airdrop bots.

However, the main challenge faced by Phaver and other Web3 native social applications is how to expand their audience and attract users without Web3 experience. Although Phaver claims to follow a "web2.5" model that allows registration without a Lens profile, its "unique experience" largely relies on Web3, which may become a barrier to widespread adoption.

POAP is another project worth paying attention to, inspired by the unique "conference culture" in the crypto space. POAP is an NFT minted through smart contracts, digitally representing a user's participation in events or conferences. Since 2021, POAP has issued over 6 million NFTs in collaboration with several well-known brands.

The most interesting potential of POAP lies in its ability to serve as a social primitive, becoming a way to initiate social networks and find like-minded individuals. Events and conferences are concepts that ordinary people can understand, making it easy to envision various communities adopting mechanisms similar to POAP. The key is how to maintain the practicality of POAP and ultimately form a new type of social community.

Conclusion

The key to the long-term success of Web3 social lies in creating a brand new social experience, rather than simply moving Web2 mechanisms onto the chain. A qualitative leap is needed, especially experiences inspired by and rooted in Web3 culture.

At the same time, to make "killer applications" attract a wider range of users, there must be easy-to-understand use cases, rather than being filled with Web3 terminology. Web3 social needs to draw on the distribution and abstraction technologies of traditional social media to "go viral."

Ultimately, a successful Web3 social platform needs to provide users with enough creative space. The explosive popularity of social applications often differs greatly from the original vision. Only when Web3 adopts this open design philosophy, rather than focusing on financialization and on-chain imitation, can we truly begin to build the next generation of "killer applications" and bring Web3 social into the mainstream.