DeFi
SocialFi Comes of Age: Solving User Experience, Then DeFi
SocialFi platforms can benefit greatly from merging elements of web2 and web3 while integrating DeFi features that are less of a technical barrier and more of complementary resources.
We are rapidly approaching a trillion-dollar economy of creators and freelancers.
Yes, Trillion, with a T.
With advancements in consumer technology products and growing public demand for digital earning opportunities, we are entering an exciting new era. This is the start of the most exciting debut cycle in SocialFi history.
Side hustles, remote work, personal branding and monetizing your passion are nothing new. Traditional social media opened new doors to these opportunities over twenty years ago. However, as the creator and freelance economy now eclipses traditional job sectors in terms of career choice and job demand, social platforms are scrambling to focus more on monetization opportunities.
But Big Tech platforms are not up to the task.
The platform of the future is one that ensures that not only are creators fairly rewarded for their contributions to content, but that participants within the ecosystem are also rewarded: viewers and all those who engage with and support the content itself that allows platforms to thrive. This is where tokenized Web3 platforms have the greatest opportunity.
However, despite the promises of DeFi, most creators and users continue to spend time on traditional social media platforms. The reasons are many: an intuitive user experience, familiar fiat payments, a fulfilling dopamine rush, and a feeling of connection with the glamorous life portrayed online.
Unfortunately, Web3’s insistence on a technology-first, experience-second approach misses the mark in attracting the masses and converting Web2 influencers into Web3 users. Web3’s current USP and pitch is the promise of decentralized control of your creations and various monetization opportunities for creators and their subscribers. This sounds good in theory, but most established creators struggle to see the value in this offering, especially given the relatively complicated integration and unfamiliar user experience of most DeFi-enabled social platforms.
Token-controlled access is seen as Web3’s answer to big tech’s control of creator revenues, enabling staking, governance, and the formation of tightly knit communities. While this is a great opportunity for crypto-native users, it is a steep learning curve and a daunting process for everyone else. SocialFi platforms must therefore not only compete with each other, but also with the status quo. The fight for user adoption in this environment can seem daunting, and the next wave of SocialFi will need to flip that equation and put “ease of use” ahead of “breakthrough technology” in order to gain market share with of Big Tech’s current user base.
SocialFi needs to bust myths about bad user experience
At the heart of challenging the traditional status quo is moving away from the rigid thinking that SocialFi must be entirely blockchain-focused, end-to-end. It’s not. The masses don’t care about the technology a platform uses, they care about convenience and experience. They want simplicity, not revolution.
It is true that critical elements of SocialFi, such as the use of tokens, are ultimately on-chain technology. However, from a utility perspective, it is just another means of monetization. Even though infrastructure and technology are evolving rapidly, innovation in how users interact with these platforms is not.
There’s no denying that the lack of interoperability, scalability, and App Store restrictions limit the options for developers building for SocialFi when trying to appeal to the masses. The result is a fragmented ecosystem in which neither creators nor users find products that provide real long-term value. The sudden rise and plateauing of platforms like Friend.Tech strengthens this case.
On the other hand, we are now seeing some Web3 platforms succeed, especially those that move away from overused and tired buzzwords like NFTs, the Metaverse, and speculative elements of GameFi.
The Farcaster Protocol is a great example of this. Farcaster is a blockchain technology dedicated to decentralized social networks, which focuses on user engagement while stealthily packing crypto features under the hood. Clever. Its Frames feature, which enables interoperable user navigation across on-chain platforms, is akin to the convenience of a cross-platform social commerce experience offered by Web2. Other end-to-end SocialFi Web3 platforms will need to implement their own versions of features that facilitate a seamless and intuitive user experience if they want to appeal to the masses. After all, only after the integration is complete will users care about DeFi functions. Never the other way around.
It’s a natural extension of how our minds work in today’s age of commerce. Creators are always looking for ways to expand their reach and amplify their digital earning potential. Despite Web3’s focus on tokenization and community building, traditional social media continues to lead and win in helping creators break new barriers by expanding their networks, leading to greater opportunities monetization. In this case, we see that ease and familiarity are key to user loyalty and satisfaction.
While big tech’s monetization pitfalls are plain to see, the reality of Web3 user adoption inertia is often hard to ignore unless the benefits are truly worth it. Thus, any move to DeFi platforms will need to ensure significant benefits for creators and users, including an intuitive and familiar user experience and high levels of user engagement and monetization opportunities.
For starters, SocialFi platforms can benefit greatly from merging elements of web2 and web3 while integrating DeFi features (such as tokenization) that are less of a technical barrier and more of a resource complement. This is the key to unlocking the economic value of SocialFi and making these platforms attractive to the general public. Furthermore, the development narrative must seek to express ease of use while seeking to reduce transaction costs and real-time cross-border payments. Otherwise, touting Web3 features alone adds little value from a user perspective.
Like everything about Web3, SocialFi also has the potential to become a bridge between two worlds. The utility of DeFi should be a given here, not an exception, and the focus should remain on creating business flow and a balance between innovative technology and intuitive UX. Tokens and exchanges will then arrive organically, and this time, with greater assurance of success and user loyalty.
Dave Catudal is an international technology and wellness entrepreneur and co-founder of Lyvelya Super Media SocialFi platform.