Earlier, Xiaobian has introduced what is SocialFi. 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. So, what problem did SocialFi solve? What are the main categories of SocialFi projects? Next, let's take a look.

What problem has SocialFi solved?

In the era of Web 2.0, the information of social customers is controlled by major social operators, such as Meta (formerly Facebook), WeChat and Twitter. Moreover, operators continue to make profits based on the use of these underlying social data, while customers make little profit. SocialFi purposefully solves some disadvantages of traditional social interaction:

1. Problems of data rights

In traditional social platforms, customer social data is stored on the operator's server in the form of fields, and the data belongs to the platform party; Relying on blockchain applications, SocialFi's tamper-proof data features are of great help for processing the key of customer data authentication.

2. Benefit distribution

Under the algorithmic system of traditional social platforms, there is an imbalance in the distribution of benefits in the realization of traffic between customers and platforms, which is not conducive to the maintenance of users' rights and interests; SocialFi is a way for users to gain profits by using the form of financialization of their social popularity, without the problem of third-party commission such as platform.

3. Privacy security issues

In traditional social networking, the registration of all accounts requires the customer's real identity information, and the information stored in the background of the operator is easy to leak; SocialFi is based on blockchain technology. The secret name feature of customer identity information is helpful for the protection of privacy security.

What are the main categories of SocialFi projects?

Although the SocialFi industry is still in its early stage, and we have not seen the emergence of products like Twitter that can monopolize the market, in recent years, more and more new ideas and projects have emerged in this field. According to the data of Coingecko, the market value of SocialMoney has exceeded 1.4 billion dollars.

There are several key categories in SocialFi:

1. Personal token

Personal currency is the currency issued by the brand of personal influence, whose purpose is to create a more direct and closer relationship between creators and fans. For example, Rally enables creators to generate and sell their own creator coins for fans to enjoy membership privileges, such as browsing the creator's personal community or purchasing VIP products.

2. Community Token

Projects in this field include Chiliz, Zora, CirclesUBI and Loop Finance. These projects mainly manage the whole community through monetary incentives. Users in the community can be divided into several levels according to their activities and contributions, and enjoy corresponding rights and interests.

In the SocialFi cell model, the key is not limited to content creation. Communities created based on social currency are also active in the investment field. They can pool assets through voting mechanism and smart contracts to find and discover investment opportunities. For example, in Flamingo, community members have the right to decide the NFT artwork they want to invest, and can split and lend the NFT they choose to buy, or put it as collateral on other DeFi platforms.

3. Decentralized social platform

These platforms try to subvert the major traditional social networking sites such as Facebook and Twitter. According to the token system, content creators can get more fair benefits for their efforts.

A famous project is BitClout, which claims to create a distributed alternative to Twitter based on workload proof and blockchain. Last March, it disclosed its strong investment background, including Sequoia Capital, a16z and Coinbase Ventures. After several famous influencers promoted the BitClout account on Twitter, it became famous in the industry.

So far, I believe you have a certain understanding of what problems SocialFi has solved and the classification of SocialFi projects. In general, the future of SocialFi has come. Now the concept of metauniverse is still in the process of development, and the potential of SocialFi has been highlighted. When the system of the metauniverse is gradually built and perfected in the future, SocialFi will also explode a new upsurge. Let's wait and see.