Since its inception, blockchain has evolved significantly. Initially designed to revolutionize payments, its expansion into alternative areas seems excessive. However, innovators developing protocols like Farcaster, Lens Protocol, and the now-defunct Friend.tech have seen a different vision. Collectively, these platforms form the Web3 SocialFi ecosystem.
Genesis and Adoption of SocialFi
The launch of Ethereum made many industry innovators acknowledge blockchain’s potential. Smart contracts gave developers the idea that they could replicate any dominant Web2 application. This notion gained traction with the emergence of Bluesky as an alternative to X. At different times, protocols like Farcaster, Lens Protocol, and Friend Tech emerged. Besides their incentivization models, they guarantee data security as nodes powering these platforms are distributed. SocialFi applications represent everything their big tech counterparts like Facebook, X, and Discord do not stand for. While some creators are favored on this platform, big tech trades users’ data for advertisement revenue. With billions in revenue generated, the average user has no reward despite spending multiple hours on these platforms. The promise to correct these anomalies helped platforms like Friend.tech record massive adoption over a year ago. Launched on the Coinbase-backed Base Layer-2 scaling solution, Friend Tech was an instant hit in the Web3 world. At its peak, as of September 14, 2023, Friend Tech saw a daily revenue of $2 million in fees. Farcaster is a well-funded Web3 social media site that failed to achieve a breakthrough in its UI/UX efforts. For an app that once boasted 104,000 Daily Active Users (DAUs) in July.
The Unexpected SocialFi Slowdown
Top social platforms in the broader tech world attained the level they got to over decades of consistent building. In the case of SocialFi protocols, many could barely sustain one year of optimal operation. Friend Tech has proven to be a big failure and a clear story of over-projecting. From the peak of $2 million per day, the application hardly saw $71.  Due to the lack of promise, the Friend Tech developers recently revoked the protocol’s smart contract. Assuming this were to be in the mainstream world, it might equate to bankruptcy. Though only Friend Tech has closed shop, Farcaster has suffered, with just 142 DAU now visiting the platform. Despite constant usage by Ethereum co-founder Vitalik Buterin, Farcaster has been unable to compete with Web2 alternatives like X and Facebook. Lens Protocol is also not exempt from the general market downturn. It has recorded a steep slump from a high user count of 42,281 in July to just 8,368. These protocols’ current outlook has proven that adoption and sustainability are worlds apart.
Can Big Tech Be Subdued?
Many innovators agree that new platforms powered by Web3 and Artificial Intelligence (AI) are needed. While crypto pioneers are making impressive moves in introducing unique solutions, the business aspect of their inventions needs to be discovered. A protocol cannot rely solely on blockchain’s core benefits to break the mass market. There must be a focus on Research & Development, marketing, and a well-stretched roadmap to prevent unhealthy expectations. Big tech giants can be beaten, but achieving this will take time. Web3 innovators in social networking and artificial intelligence, such as ASI Alliance, DePIN, and other areas, must learn from their respective Web2 competitors. This might be the only way to penetrate and displace big tech overall.
Blockchain, which started with the goal of revolutionizing payment systems, has evolved into new areas, forming the Web3 SocialFi ecosystem. However, despite impressive solutions and potential, sustainability and mass adoption remain challenges. Big tech companies can be beaten, but this requires time, research, and well-planned strategies.
Comments