Exploring the Opportunities and Mission of Web3 Social

Recently, the Web3 discourse is filled with hostility, and both insiders and outsiders believe that Web3 is just a way to exploit investors. However, in my view, Ponzi is a neutral financing technique and a means to safeguard the success of a project. Whether it’s DeFi, social networking, or other sectors, there have always been persistent builders working hard. As long as the pace of progress does not stop, the Web3 revolution has not failed. All technological innovations emerge in a surge, and short-term lows are not enough to prove that the industry lacks prospects. We believe in the power of cryptocurrency and look forward to a decentralized future.

This article will summarize the development of the Web3 social field over the past 8 years across two cycles,整理经验教训, and look for potential opportunities. Although Web3 social is not yet mature, its achievements are noteworthy. Different people have different expectations for Web3; some hope for a better experience, while others need protection of personal data sovereignty. With technological advancements and lowered barriers, genuine products may soon emerge.

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 from users", it is necessary to fundamentally prove the demand for social interaction in Web3.

Humans are social animals with social needs. This has been repeatedly proven by social products. People need to establish connections with others, perceive others' emotional attitudes through these connections, and obtain feedback to correct themselves. This is a need ingrained in our genes through evolution, akin to eating and drinking. In short, it is about connection, cognitive interpretation, and self-coordination.

Holding tokens is a brand new way to connect. An open and verifiable database expands the dimensions of connection information. The new information environment will foster new social relationships and interaction methods.

The main motivations for social behavior on the internet are: self-presentation, emotional venting, and seeking recognition. The internet creates more social scenarios through multimedia, ranging from forums and blogs to instant messaging and social media. New scenarios encompass different interpersonal networks and content presentation methods, leading to successful projects.

Economies of scale are a significant characteristic of internet social interactions. Projects that cannot establish economies of scale under specific demographics and purposes find it difficult to survive. The scale of Web3 social interactions is far less than that of Web2 giants. Without scale, how can users expand relationships, achieve representation, and foster empathy?

The development direction of Web3 is an ecosystem supported by trustworthy open data and a financial environment backed by tokens. How will this give rise to a new industrial landscape? The underlying information support across databases and organizations, along with composable social interfaces, is the advantage of Web3. Using social support for token issuance, with the core organizational relationship being the quantification of rights interaction through tokens, creates a unique scenario.

The Web3 industry goes to great lengths to gain localized competitive advantages.

The Development Context of Web3 Social

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

1. Develop decentralized social technology standards
2. Establishing Token Consensus through Socialization

Competition of Decentralized Social Technology Standards

The power of internet social platforms is immense and should not be entrusted to companies and governments. Losing sovereignty over social information means losing freedom of cognition and choice. The Facebook data breach incident shows that our will can be easily manipulated, and we need to take control of data sovereignty. Decentralized social solutions are a necessity.

To achieve decentralized social networking, it is necessary to make breakthroughs in communication protocols, data, and applications. Next-generation projects like Bluesky, Nostr, Lens, and Farcaster have their own protocols. By giving up certain decentralization attributes, each protocol has made significant progress. Mimicking Web2 tools is no longer an issue, and user autonomy is stronger. However, overcoming the challenges of scale disadvantages remains a challenge.

Token incentives have become a direct means for most projects in the short term.

Token Incentive Revolution Stalled

The birth of tokens is like opening Pandora's box. Web3 users face a complex financial environment. Project parties can use tokens to reduce operating 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 are facing witch attacks.

These two issues have not been completely resolved to this day. STEEM is a pioneer in Web3 social media, and its concepts and structural design are still referenced today. In 2016, STEEM innovated in multiple dimensions. Applications based on STEEM are social media platforms where content quality is determined by token-staked users. In the early stages of the project, the founding team's advantages were evident, and the content production and recommendations weighted by token staking were effective. However, the wealth effect attracted witch attacks. STEEM's token staking includes punitive powers, which provide a certain degree of immunity against witch attacks.

This effectiveness is built on the centralization of asset power and a solid foundation of consensus. After the founding team disintegrated, the collapse of consensus led to more witch attacks. After algorithm recommendations and AIGC mature, this token-weighted voting system will exit the stage. Now, top social media platforms have achieved personalized experiences for thousands of users, and refined content selection is beyond the reach of human effort and simple tagging.

After STEEM, many projects used tokens to accelerate expansion, such as Torum, BBS, etc. These incentives contradict the social element of "non-monetary rewards." External material rewards can diminish intrinsic psychological rewards, leading to a mix of social content with non-social content. Social links serve as information channels, and the platform's value lies in aggregating channel information. Incentives that are polluted with noise result in lower social efficiency, and channels with insufficient information face more noise, leading to decline being a natural consequence.

Degen on Farcaster rewards with tokens. This incentivizes Web3's unique financial capabilities with Meme tokens, creating a wealth effect that leads to ecological prosperity. There can only be one token for the platform, but countless Meme tokens can exist. Meme tokens can fail, but the platform token cannot. Using Meme tokens to boost social projects will become a superior skill. The wealth topics of Degen combined with the innovative possibilities of Frames attract more builders to participate in Farcaster, leading to ecological prosperity. This is a classic operational campaign. The ecology has produced tools including NFT piggy banks, various streaming services, and launch platforms. Although there are no signs of Farcaster breaking through industry bottlenecks, this emergence is worth paying attention to.

Content autonomous revolution stage 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 was developing rapidly. In the first two cycles, social projects focused on autonomous content narratives. Various projects attempted to "put content on the blockchain" and worked on content assetization based on this.

Launched in 2016, STEEM gradually fell 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, leading to its decline after the DeFi summer of 2020. The throne of content on-chain was taken over by Mirror. Mirror's selling point is its user-friendly text content editing environment. Users can publish content by signing with their wallets. Content on-chain is immutable. Other users can subscribe to accounts and mint content as NFTs for trading in the market. Currently, the project continues to operate, with a decrease in traffic, but some Degen players are still using it to publish content and engage in NFT minting activities.

Mirror is an excellent Web3 product, designed with the spirit of minimalism, pushing the use of a trustworthy open database to the extreme. Anyone can assert rights over internet content through wallet signatures. Once rights are asserted, content can issue NFTs and engage in NFTfi trading in an EVM environment. The loss of Mirror users is essentially due to insufficient operational capability, and textual content inherently lacks traffic, making it a discarded piece in the era of trash culture. At the same time, there are projects focusing on audio and video to bring content on-chain. Without discussing the ineffectiveness of content incentives, the massive data volume makes it difficult to sustain project operating costs. Doing content business is essentially doing media. Either one has good content to attract users, or one has a large user base to attract good content. Simply providing technical solutions cannot become a business.

By the end of 2023, more content-based projects have emerged. Bodhi is also a minimalist product. Inspired by Friend tech, it no longer mints associated content NFTs at a uniform price, but uses bonding curve technology to sell at varying prices, where the more sold, the higher the price. There are also projects like CloudBit that forcibly replicate Web2 content on the blockchain to create NFT assets. There are many similar projects that attempt to turn content into verifiable assets. However, what cannot be changed is that in the internet era, content can be verified, but the information it carries can easily be transferred. Even in cases of direct theft or infringement of content, putting content on-chain does little to increase the cost of illegal activities. Therefore, there are currently no good cases of issuing assets directly 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. While rationality tells us that personal information is valuable, users do not seem to care much about their own content sovereignty.

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

The emergence of STEEM has inspired a batch of blockchain projects. One of its main ideas is to create a ranking list for content based on token staking weight voting. This idea has been repeatedly borrowed by different projects.

Yup is a project that is more focused on content recommendation and exists in the form of a social plugin. By issuing tokens, it incentivizes users to interact with content through Web3 plugins. By utilizing this interaction information along with token staking weights, it reorganizes and reconstructs content from other Web2 platforms under its own list.

Wormhole3 is also a content recommendation plugin. Unlike Yup, it supports multiple tokens as content recommendation incentives. The entire incentive process is implemented through code. Different incentive tokens have independent label lists on the official website, realizing the diversification of content recommendations. In the Wormhole3 model, it is assumed that people holding different tokens belong to corresponding communities, and the number of tokens staked determines the influence within the community channels. Some token allocation powers are also controlled by this influence.

Projects like Matters, Torum, BBS, and Bihu that adopted token incentive content listing recommendations have all failed. The essence lies in the fact that token incentive listing recommendations cannot capture attention. The previous generation of simple sorting + tagging classification content recommendations has a hard time competing with intelligent algorithms. As an advertising system, Web3 projects, in pursuit of decentralization and programmability, find that immature algorithms for ad placement pricing are not as precise as the professional algorithms of Web2. The monopolistic nature of the advertising market is not as strong as that of centralized exchanges. Therefore, projects like QuestN and RSS3 that utilize data to influence content distribution have also ultimately pivoted.

Experience teaches us that even low-cost token incentives must encourage advanced production methods. Phavor still relies on Web3 databases to serve as middleware for cross-database recommendations; content recommendation systems are a necessary component of social media. Token incentives are not the key to Web3 recommendation systems, but the token holding structure and on-chain behavior are. The participation of on-chain data in system decision-making is the essential difference between Web3 and Web2 recommendation systems. Compared to airdrops, the cost of on-chain social interactions is extremely low, thus giving rise to witch arbitrage attacks.

Using tokens to control content recommendation, the underlying power logic is: attention is controlled by organizations rather than individuals. The allocation of content according to organizational needs resembles work communication platforms like DingTalk and Feishu. It is more accurate to say that these are DAO tools rather than social tools, as voting reflects power. The ability to manage organizational power without trust is undoubtedly an advantage of blockchain and even Web3. Currently, there are content recommendation incentives based on organizational ( platforms or communities ).

The social tools loved by ordinary people have been replaced by solutions targeting individual attention. The current generation of social media focuses on pushing content to individuals, adjusting recommendations based on personal real-time likes and dislikes. If 1V1 content pushing is advocated, on-chain information should serve more as the raw data for content and user tags.

The "Subscription Stream Generator" created by BlueSky is a combination of recommendation algorithms and communication protocols. Anyone can provide their own recommendation algorithm for the communication protocol. Users can subscribe to their favorite recommendation algorithms as needed.

The Debank social module has great potential. Although many people use Debank as a data tool, its launched badges and account displays combined with streams have reached an industry height that many projects focused solely on badges cannot achieve. Long-term NFT players say that NFT information is definitely more important than for others. How can users who do not participate in DeFi provide guidance to others about DeFi? As on-chain activities increase, using accounts to correct user data and content data by treating on-chain behavior as a data source will improve.