Exploring the Opportunities and Mission of Web3 Social

Recently, the Web3 field has been filled with controversy, with some believing it is just a large harvesting ground for investors. However, in my view, the Ponzi model is a neutral financing technique, a means to achieve the ultimate success of a project. Whether it's DeFi, social, or other sectors, there are builders who continue to strive. As long as the pace of progress does not stop, the Web3 revolution has not failed. All technological innovations occur in an emergent manner, and a short-term low point is not enough to negate the industry's prospects. We believe in the power of crypto and look forward to a decentralized future.

This article will outline the development of the Web3 social domain over the past eight years, summarize experiences and lessons learned, and discuss potential opportunities. Although Web3 social is not mature, its achievements are noteworthy. Different people have different expectations for Web3; some hope for a better experience, while others need protection of data sovereignty. With technological advancements and lower barriers to entry, the emergence of true products may be happening right now.

The Underlying Demand Theory of Web3 Social

Successful products are built on solid demand. To break the prejudice that "Web3 is just about harvesting profits," it is essential to fundamentally demonstrate the demand for social interaction in Web3.

Humans are social animals with social needs. This has been repeatedly demonstrated by social products. People need to establish connections with others to perceive their emotional attitudes and receive feedback to adjust themselves. This need is as fundamental as eating and breathing, ingrained in our genes through evolution. In short, it is about connection, mental interpretation, and self-coordination.

Holding tokens is a brand new way of linking. An open verifiable database expands the dimensionality of information obtained through linking. The new information environment will nurture new social relationships and interaction methods.

The motivations for online social behavior can be summarized as: self-presentation, emotional release, and seeking recognition. Compared to offline interactions, the internet has created more social scenarios through multimedia. From forums to instant messaging, and then to social media, these new scenarios encompass different interpersonal networks, content, and presentation methods, resulting in a number of successful projects.

Economies of scale are a significant characteristic of internet socialization. Social projects that cannot establish economies of scale under specific demographics and purposes struggle to survive. Compared to the millions of concurrent users of Web2 giants, the scale of Web3 social networks is minimal. Scale determines whether social nature and motivations can be better realized. Without scale, how can users expand relationships, achieve presentation, and attain empathy?

The development direction of Web3 is an industrial ecosystem supported by a trusted and open data environment, as well as a financial environment backed by tokens. How does this environment nurture a new industrial pattern? The underlying information support across databases and organizations, along with the free choice of composable social interfaces in the front end, is a unique advantage of Web3 social. Tokens are a typical feature of Web3, and using social support for token issuance, with the quantification of rights interactions based on tokens as the core of organizing social relationships, represents a unique application scenario for Web3 social.

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

The Development Context of Web3 Social

The Web3 environment provides advantages for entrepreneurs, and social projects show two development trends:

1. Develop decentralized social technology standards
2. Build Token Consensus through Social Media

Competition of Decentralized Social Technology Standards

If we believe that humans are social animals and that information input determines human nature, then the power of internet social platforms is extremely great. Handing this power over to companies and governments may lead to serious consequences. Losing sovereignty over social information means losing cognitive and choice freedom. The Facebook data leak scandal led by Cambridge Analytica shows that our will can easily be manipulated. We and future generations need to take control of our data sovereignty. Therefore, decentralized social technology solutions are a necessity.

To achieve decentralized social networking, breakthroughs must be made in communication protocols, data, and applications. The communication technology that achieves consensus on the blockchain may not necessarily be suitable for decentralized social networking. Based on the experience of STEEM, new projects such as Bluesky, Nostr, Lens, and Farcaster have proposed decentralized social protocols. By relinquishing some data decentralization attributes, all protocols have made significant progress. Imitating Web2 social tools is no longer an issue, and in fact, due to decentralization, users have greater autonomy. Users have the right to maintain their intangible assets within the system. However, Web3 businesses face a significant scale disadvantage.

Technology is not the issue. How to overcome the disadvantages of economies of scale is a challenge faced by all solutions. To break through these disadvantages, token incentives have become the most direct means for most projects in the short term.

Token incentive revolution encounters obstacles

The birth of tokens is like opening Pandora's box. Web3 users are forced to face a complicated financial environment. For project parties, tokens can serve as subsidies for user desires, reducing operational costs.

Token incentives face two major dilemmas in social environments:

1. The subjective value of social content is difficult to assess, 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, taking STEEM as an example.

The STEEM blockchain is a pioneer in Web3 social networking. Its philosophy and structural design have been imitated and referenced, giving rise to a number of blockchain application teams and projects. In 2016, STEEM innovated in areas such as token incentives for content, real-person curation, data availability layers, and account hierarchical security.

Applications based on STEEM are social media, where content quality is determined by users' token stake weights. In the early stages of the project, the founding team had an absolute advantage in reputation and staking amounts. Content production and filtering recommendations based on token stake weights are effective. The huge wealth effect attracts witches, but the token staking of STEEM includes punitive powers that can provide some immunity against witch attacks.

The effectiveness is based on the centralization of asset power and a solid consensus foundation. When founder BM left, the team fell apart, and the project was sold to Sun Yuchen, leading to a collapse of consensus. In the early stages, the collapse of consensus led more people to choose witch attacks for profit: token holders praised each other, and proxy mining ran rampant. In the later stages, when algorithm recommendations and AIGC matured, the content production and recommendation system based on token-weighted voting should exit the historical stage. Now, top social media platforms have achieved user content that is tailored to each individual, and this refined content selection is unattainable by mere human resources and relying solely on content tag sorting and pushing.

After STEEM, many projects have accelerated platform expansion by issuing tokens, such as Torum and BBS. Later, there are also those like Lens protocol that rely on expected free-riding. These incentives contradict the non-monetary return element of social interactions. Experiments show that external material rewards can reduce intrinsic psychological rewards, leading to social content being mixed with non-social content. Social links serve as information channels, and the value of social platforms lies in aggregating information within these channels. Such mixing of incentives leads to reduced social efficiency, exposing already information-scarce channels to more noise, resulting in a decline being a logical outcome.

On Farcaster, Degen sends out some tokens as rewards. This is a unique financial function of Web3 social projects, incentivized by Meme tokens, not 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 superior token incentive platform technique. The Degen wealth discussion combined with Frames' innovative possibilities allows more and more builders to engage in Farcaster, triggering ecological prosperity. This is a classic operational campaign. The ecological emergence brought about by this operation cannot be ignored. Currently, the ecosystem has produced tools such as NFT piggy banks, various streaming media, launch platforms, etc. Although no signs have been found that Farcaster has broken through the business boundaries of Lens ) or the current industry bottleneck (, this emergence is worth paying attention to.

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) Content autonomous revolution phase setbacks

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

The starting point for Web3 social should be in 2016-2017. At that time, Web2 social products were developing vigorously. In the last two cycles, social projects have been focusing on independent narrative of content. Various projects attempted to put content "on-chain" and based on this, work on content assetization.

Launched in 2016, STEEM has fallen behind due to team fragmentation and slow development progress. Although it achieved content on-chain upon launch, it lacks an EVM environment and cannot run smart contracts, gradually losing ground after the DeFi summer of 2020. The leading position in content on-chain has been taken over by Mirror. Mirror's selling point lies in providing a user-friendly text content editing environment. Users can sign and publish content using their wallets. Content is on-chain and cannot be tampered with. Other users can subscribe to follow specific accounts. Additionally, content can be minted as NFTs and traded in the NFT market. Currently, the project continues to operate, with some decline in traffic, but some Degen players still use it to publish content and engage in content NFT minting activities.

Mirror is an excellent Web3 product, designed with a minimalist spirit, maximizing the use of a trustworthy and open database. Anyone can assert rights over internet content data through wallet signatures. Once rights are asserted, the content can be issued as NFTs and traded under the EVM environment NFTfi. The essence of Mirror's user loss is 1; compared to traditional Web2 content operators, not only is the operational capability lacking, but also written content, especially lengthy discourse, inherently lacks traffic and is a discarded child of the era of junk culture. At the same time, there are projects focusing on voice and video to put content on-chain. Discussing content incentives is ineffective, and the massive data volume makes it difficult for project operating costs to be sustainable. Doing content business means doing media. Either you have good content to attract users, or you have a large user base to attract good content. Simply providing technical solutions cannot become 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 related content NFTs at a unified price, but instead uses bonding curve technology to sell at varying prices, with prices increasing as more are sold. There are also projects like CloudBit that forcefully replicate Web2 content on the blockchain to generate NFT assets. There are quite a few similar projects that attempt to transform content into verifiable assets. However, what they cannot change is that in the internet age, while content can be verified, the information carried by the content can be easily transferred. Even in cases of direct theft or infringement of content, putting content on-chain does little to increase the cost of illegal activity. Therefore, there are currently no good cases of directly issuing assets based on content as a value anchor.

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

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

The emergence of STEEM has encouraged and inspired a number of blockchain projects. One of the main ideas of STEEM is to rank content using token-weighted voting based on the amount of tokens staked, creating a list. This idea has since been repeatedly borrowed by different projects.

A project that leans more towards content recommendation: Yup, exists in the form of a social plugin. By issuing tokens, it incentivizes users to interact with content through this Web3 plugin. Utilizing this interaction data, combined with token staking weights, it repositions and reorganizes content from other Web2 platforms under its own list.

Wormhole3 is also a content recommendation type plugin. Unlike Yup, it supports using multiple tokens as content recommendation incentives. The entire incentive process is implemented in code. Different incentive tokens have independent label lists on the Wormhole3 official website, achieving diversification in content recommendations. In the Wormhole3 model, it is assumed that individuals holding different tokens belong to their corresponding communities, and the amount of tokens staked determines their voice in the community channels. A portion of the token allocation power is also controlled by this voice.

Projects such as Matters, Torum, BBS, and Bihu, which have adopted token incentive-based content list recommendations, have all faced failure. The essence lies in the fact that list-based recommendations driven by token incentives cannot capture attention. In the attention market, the previous generation's simple sorting + tag classification for content recommendations is increasingly struggling to compete with intelligent algorithm-based content recommendations. As advertising systems, Web3 projects, in pursuit of decentralization and programmability, actually have immature algorithms for pricing ad placements.