Tuesday, May 21, 2024
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SocialFi Is the New Buzzword in Web3 World, Here’s What We Know About It

The sector of blockchain-based Web3 is rife with buzzwords and the latest one to emerge on top of the heap is called SocialFi. Comprised of two words – social and finance – SocialFi is a category of Web3 sector that brings together social networking and decentralised finance (DeFi). Essentially, the concept of SocialFi is to bridge the gap that exists between existing social networking platforms and Web3. The sector is particularly seeing growth in the US, Canada, Germany, France, the UK, China, and India.

SocialFi apps let users churn rewards for posting high-quality content while also offering them more control over their data and the content they post on social media. Barterchain, SocialTrader, ChatMint, and Troop Finance are reportedly among some popular SocialFi apps available for use.

SocialFi apps are also called DAOs or Decentralised Autonomous Organisations. These platforms and protocols are not controlled by one single entity, in fact the decisions on how to grow these platforms are taken on the basis of what their community wants. This prevents the apps from censorship-related crackdowns giving users more control over their right to freedom of speech and expression.

Apps that fall under the SocialFi category come with their native in-app utility tokens. These tokens can be used by creators to monetise the engagement on their posts through social media. Instead of one company making money from content engagement on the platform, SocialFi apps or DAOs let creators earn capital from their posts and content. The rewards are usually crypto-based.

According to CoinGecko, the total market cap of SocialFi tokens, as of May 9, stands at $5.28 billion (roughly Rs. 44,091 crore). The season of SocialFi growth is already around the corner, ‘vying for attention’, a recent research report published by K33 Research says.

In the report, blockchain analyst David Zimmerman noted that the recent airdrop of the $FRIEND token by SocialFi platform Friend.tech has by far been the ‘most highly anticipated SocialFi airdrop to date’.

The report posted on K33 Research also said, “The market is always hungry for the next hyped-up product. Fantasy Top is positioning for this, running a series of incentivised competitions.” The Fantasy Top lets users buy/sell virtual trading cards of Twitter/X accounts and use them to compete in tournaments.

The SocialFi market size is projected to grow from $2 billion (roughly Rs. 16,702 crore) to $20 billion (roughly Rs. 1,67,022 crore) in the coming few years. Digital engineering and IT firm Systango said in a research report last year that the SocialFi category of Web3 apps have already seen 14 million users out of which five million are active.


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