With the emergence and development of Web 3.0, a new social application, SocialFi, has emerged. SocialFi is changing social networks, which is the integration of DeFi, NFT technology and social networks, allowing creators to completely control their content and property without being controlled by intermediaries. So, what does SocialFi mean? Why do we need SocialFi? Next, let's take a look.

What does SocialFi mean?

SocialFi is defined as social finance. As the name implies, SocialFi is the combination of social and finance. SocialFi is a new way of creative social finance. The combination of social media and DeFi opens up new social methods.

Features of SocialFi:

1. SocialFi is a combination of social, web3.0 and finance. It provides rewards and benefits to users according to the social influence of the logo. Customers have the profit of works on the platform, and works on the platform are not exploited by the platform monopoly.

2. Compared with the single blockchain+social network, SocialFi emphasizes the characteristics of DeFi more. The SocialFi project builds the "Lego" of decentralized finance under the premise of smart contracts. A number of high-quality projects have created a new generation of SocialFi platform integrating social, financial attributes and data NFT trading.

3. There are many forms of mining in SocialFi, including social mining with obvious social attributes, content mining, and mobile mining with DeFi attributes. Project users can carry out content mining based on content creation, and carry out social mining with effective and high frequency sociality. In addition, some project currencies of SocialFi can also be used for liquidity mining.

Main components of SocialFi:

Content: The content is the "work certificate" that the participants in the SocialFi project platform get in currency or NFT.

Social: Social activity is the foundation of survival of SocialFi project.

DeFi-centered economic system: currency or NFT is a way of social capital to measure the contribution and social activity of participants, maintain the operation of social platforms, and achieve more profits through DeFi Lego.

Decentralized organizational structure: Decentralized token rewards and transmission constitute a decentralized value circulation system and further define the governance structure of the decentralized platform.

Why do we need SocialFi?

Although we have long been accustomed to the traditional community platform, as they gradually expand and continue to encounter various problems, the concept of SocialFi also came into being.

1、 Defects of traditional social network platform

1. The approval authority is too large and the regulations are different

The platform manager can delete the content of the creator at will, and even ban the user's permission; Moreover, the standards of platform approval are different. Some systems will delete some content without any problems, but they will save the words that promote discrimination and hatred.

2. Exclusive algorithm

Another problem that seriously affects the customer experience is the algorithm of the platform. Perhaps in order to obtain higher traffic or advertising revenue, the platform gives priority to the advertising content through the algorithm, and removes the sensitive content in their eyes, becoming a kind of changing monopoly. In addition, customers' personal data also often come with concerns about being tracked or leaked.

3. Unbalanced distribution of benefits

Although the global advertising market is expanding, it is difficult for creators to get advertising revenue through the platform. Therefore, there are often creators who describe high-quality content and add traffic to the platform, but they may not get corresponding benefits from it (for example, although there are many praises on Facebook and Twitter, the official will not award you, so you must attach the industry matching).

2、 SocialFi solves the problems encountered by traditional social media platforms

SocialFi can return the ownership and control right of the platform to the customers through the decentralized system, and the whole community can formulate the review mechanism. At the same time, it can also bypass the annoying algorithms. Customers can only see the people they are tracking, without being harassed by advertisements.

At the same time, creators can also finance their social popularity on the platform, and make profits through such mechanisms as "like sponsorship" and "content mining", and the platform will not deduct huge service fees in the middle.

In addition, due to the high invasion cost of blockchain and the anonymity of customers, we can also respond to the problem of personal information disclosure. Although this does not mean that it will never be invaded, at least the threshold will rise and the customer will suffer less damage.

Having said that, I believe you have a certain understanding of what SocialFi means and why it is needed. In general, with the development of relevant technologies such as the Meta Universe, SocialFi may also derive a lot of existing ways and playing methods not limited to Facebook, Twitter, Instagram, etc. to meet the needs of creators and create an unprecedented social network.