TLDR Decentralized Social networks (DeSoc) and SocialFi combine the most profound and the slightly shadier elements of crypto. On the one hand, they can give users of social networks ownership over their social identity and social graph. On the other hand, some introduce an element of financial speculation that people may find off-putting. In any case, with protocols such as Farcaster getting significant adoption, they appear to be more than a flash in the pan.
Decentralized Social Network Platforms are also called social graph platforms. They are protocols in the way the SMTP protocol is a base layer onto which anyone can build apps that let people send and receive emails.
DeSoc platforms provide the essential tools for any social app by hosting user profiles, followers, and posts. All have crypto wallet integrations.
The Difference Between DeSoc and SocialFi
While there is no sharp distinction between Decentralized Social Networks and the category of Social Finance (SocialFi), the latter always includes a financial element, an element of trading.
Platforms like Friend.Tech and FantasyTop include a token and NFTs, respectively.
For DeSoc, monetization is not an essential element, though some platforms have tools for rewarding creators. DeSoc is all about decentralization and user sovereignty. For SocialFi, monetization is key. Users earn tokens for their engagement. Let’s first dive into SocialFi.
SocialFi Platforms Tokenize Creators or Content
In the same way different blockchains are on different layers, SocialFi projects also have different focus. The main distinction is whether they tokenize content or… creators (?).
Creator Tokenization apps: these apps allow users to buy and sell tokens linked to creator profiles. Users are in a sense Venture Capital investors in content creators. Fees from the trades go back to the creator.
Content tokenization apps: these apps let creators turn their content—like blogs, music, or other media—into tokens that users can buy. When someone buys this tokenized content, the creator earns a fee, and the buyer gets a copy of the media in their digital wallet. This content can unlock future rewards. Examples include Mirror for blogs and Sound for music.
Creator Tokenization Apps
Friend.Tech
An example of a creator tokenization app is the infamous Friend.Tech. Some have called it a get-rich-quick-scheme for influencers. Users get a Base address and can buy (with ETH) their first share/key of themselves. This opens up their ‘room’. People can buy keys of you and unlock your room and interact with you. The more keyholders you have, the more shares are issued. But it doesn’t dilute the price. Instead, the base price for new members rises.
What is cool from a technical and fundamental perspective is Friend.Tech’s shares or ‘keys’ can be plugged into the rest of DeFi. You could for example make ERC-20 tokens of the keys. In that case, ‘you’ can be traded on the vast DeFi market.
Friend.Tech saw a big wave of adoption in the fall of 2023. Activity has stalled, even though there are occasional bursts.
Fantasy Top
A second example of a SocialFi app is Fantasy Top. It is built on Ethereum Layer 2 Blast and is like fantasy sports, but with more options and more financial speculation. It falls in the…
Erik started as a freelance writer around the time Satoshi was brewing on the whitepaper.
As a crypto investor, he is class of 2020. More of a holder than a trader, but never shy to experiment with new protocols.
