Web3 Social: Exploring the Latest Digital Frontier
When was the last time you went more than an hour without checking your social media feeds? Whether it’s X, Instagram, or TikTok, these platforms have become deeply ingrained into our daily lives, to the point of addiction for some. Yet even as we spend countless hours scrolling, liking, and posting, social media today looks much different than what many of us idealistically imagined during its early days.
Rather than empowering users, social media platforms have centralized power in the hands of a few big tech companies. They control the algorithms that dictate what we see. They monitor and monetize our data without transparency. And they censor content based on opaque policies and political pressure.
This centralization prompted the birth of Web3 socials – envisioning a new, decentralized internet where power lies with users and communities, not corporations. And now, a vanguard of Web3 projects is aiming to realize this vision specifically for its social aspect.
Web3 socials offer a compelling alternative, building on blockchain and crypto as the foundation. Users retain ownership of their own content, profiles, and networks. Moderation and governance are community-driven, not dictated from the top. And creators can monetize through embeddable crypto payments and NFT sales.
While Web3 social networks are still in their early days, the opportunity is immense. As public backlash mounts against centralized giants, Web3 innovation may offer users the choice many have waited for. This report explores the landscape of this emerging field, the infrastructure supporting it, key applications, investment trends, and future opportunities.
The History of Web3 Social Project
Steemit – An early web3 blogging and social networking website that rewards users with the cryptocurrency STEEM for creating and curating content. At its peak in 2017, it had over 1 million users and substantial engagement. However, numerous issues like centralized control and inflationary tokenomics led to its decline.
Peepeth – One of the earliest web3 social networks built on Ethereum. It allows users to post short messages (“peeps”) which are stored on the blockchain. Peepeth introduced innovative crypto economic incentives, paying users crypto to post content. However, it has struggled to gain significant user traction.
BitClout – A web3 social network that allows users to buy and sell creators’ “social tokens.” It replicates popular social media features and gained quick hype, but has been controversial due to lack of creator consent in launching their coins.
The early web3 social projects like mentioned above struggled or failed to achieve mainstream adoption for a few key reasons:
- Poor user experience – The UX was often slow, clunky and not intuitive compared to familiar centralized social apps. This made retention and virality difficult.
- Speculative focus – Many users were drawn for get-rich-quick schemes from tokens/coins rather than organic social incentives. This did not lead to sustainable communities.
- Centralization – Despite claims of decentralization, some projects like Steemit had excessive central control by founders/developers, going against web3 ethos.
- Toxic communities – Lack of effective moderation led to spam and abuse issues on some platforms.
- Technical limitations – Early protocols were slow and costly to use due to blockchain limitations at the time. This also limited future iteration and feature development.
The current web3 social landscape is still early but evolving rapidly. Some key differences from the earlier platforms include:
- Modular architecture, you own your data.
- Interoperability across platforms via social NFTs and decentralized identity.
- Leveraging newer infrastructure like Layer 2/sidechains scaling solutions to improve usability.
While still niche, web3 social shows potential to empower creators and users in new ways. But significant user adoption challenges remain. As infrastructure matures, web3 social could see more mainstream uptake in the coming years.
Understanding Protocol Layer of Web3 Socials
By now you probably get the idea behind Web3 social networks is decentralization – taking power away from centralized platforms and giving it back to users. To accomplish this, Web3 social projects leverage blockchain, crypto-economic incentives, and open standards.
Leading Web3 social protocols include Lens and Farcaster. Lens operates as a decentralized social graph, recording activities like posts, comments, and follows on the Polygon blockchain. This persistent social graph allows profiles and networks to live on across different applications built on Lens, like Lenster and Orb
Farcaster similarly offers an open social graph protocol for activities like broadcasts, reactions, and connections. It uses a hybrid on-chain and off-chain architecture, with identity management and consensus on-chain while content lives off-chain.
On the non-blockchain side, Mastodon operates on a federated model, more akin to email networks. Users can join or run independent Mastodon servers while still being able to seamlessly interact with the broader network.
Other Web3 social projects focus more on specific applications rather than protocols. For instance, CyberConnect builds tools for aggregating on-chain and off-chain social connections.
A key influence of Web3 social projects is showing that user data and online identity do not need to be siloed within closed platforms. Decentralized identity and social graphs allow users to own their networks and seamlessly move between applications. This shifts power away from monopolistic data hoarding and towards open ecosystem collaboration – fulfilling some of the early internet’s original promise.
For example, if you use a new app built on Lens like Lenster, your existing connections and conversation history from previous Lens apps would automatically carry over. This portability stands in stark contrast to walled gardens like Telegram or Discord where entire relationship graphs are locked in.
Mature decentralized identity and portable social graphs unlock the ideal of an open metaverse – not fragmented walled gardens but rather an interconnected and user-owned social web. Infrastructure projects establishing these building blocks are laying the essential groundwork for the next generation of social technology.
Infrastructure in Web3 Social Projects
While flashy new social apps on the frontend capture a lot of attention, foundational infrastructure is absolutely critical for realizing the long-term decentralized social vision. One of many key pieces of infrastructure is decentralized identity
Decentralized identity refers to users owning and controlling their personal data and online profiles outside of any specific platform’s silo. Rather than profiles being locked in Facebook or Twitter databases, users hold sovereign identity that persists independently.
Projects like Unstoppable Domains and ENS are building systems for self-sovereign digital identity anchored to public blockchains. Unstoppable Domains uses NFTs to give users control over censorship-resistant blockchain domains that point to their profiles and content. ENS offers similar functionality using the Ethereum naming system.
Decentralized identifiers allow user profiles, relationships, reputations, and content to persist across platforms and applications. For example, the Galxe credentialing platform leverages decentralized identifiers so users can carry reputation across different apps – earning credentials in one app contributes to an aggregated cross-platform reputation score.
Exploring Applications in Web3 Social Projects
Several projects focus on recreating familiar social media experiences in a decentralized way. For example, Lenster provides a Twitter-like feed where users can post short updates, follow accounts, and interact with posts. Another is Friend Tech, a platform which allows users to tokenize their social network by buying and selling “shares” or Keys of their connections.
Messaging apps are also emerging, like Dialect, Salsa and Frens. These allow private conversations and group chats based on blockchain account addresses rather than being locked into a specific provider.
Web3 livestreaming integrates deeper community interaction and monetization for creators. Unlonely enables streamers to earn crypto tips and share revenue with transcoders who encode their streams. Audius takes a similar approach for music streaming.
Long-form written content has also found a home in Web3 through platforms like Mirror and Paragraph. These decentralized blogging sites allow bloggers to own their content, build subscription models, and embed crypto patronage abilities.
Underlying all these experiences are unique solutions made possible by decentralization. Users own their social history and connections. Moderation and governance are community-driven. Pseudonymity enhances privacy and reduces bias. Direct crypto payments and NFTs unlock new monetization avenues. And censorship resistance ensures speech stays uncensored.
Protocol Layer Traction
Infra layer traction
App layer traction
VC Investment Landscape
Venture capital investment into Web3 social startups is heating up rapidly as VCs recognize the massive opportunity up for grabs. Investment activity in web3 social protocols is increasing, with over 20 rounds in 2022-2023 so far as the market matures
Active thesis-driven funds:
Notable recent raises:
- Lens: $12M at $100M valuation with Global Coin Research participation
- Farcaster: $30M from a16z
- Bluesky: $13M from Jack Dorsey
- Yup: $3.5M led by Distributed Global and Dapper Labs
- Push: $10M+ led by Jump, ParaFi, Wintermute, Tiger
- XMTP: $20M from a16z, Redpoint, and Nascent
- Lit Protocol: $10M+ from 1kx, Lattice, Village Global
Web3 social tokens have ample room to expand as the field matures. If adoption accelerates, market caps could scale 10x or more in the coming years. While still a nascent industry, the growth signals are promising.
The decentralization movement spearheaded by Web3 social networks represents a significant shift in how people connect and share online. These early platforms offer an alternative vision to centralized social media giants – one where users retain ownership, communities self-govern, and creators have expanded opportunities.
However, challenges remain around mainstream adoption and competing with entrenched giants. As the technology and design matures over time, decentralized social projects have potential to gain wider traction. But the outcome is still uncertain.
Much comes down to whether Web3 social developers can create seamless user experiences, vibrant communities, and sustainable tokenomics that fulfill their vision’s promise. Venture investment accelerates innovation but winners have yet to emerge. While the decentralized future is not guaranteed, these projects represent ambitious efforts to reshape social technology and empower users – achievements that could deeply influence the internet’s next chapter.
This article has been written and prepared by zkCyborg a member of the GCR Research Team, a group of dedicated professionals with extensive knowledge and expertise in their field. Committed to staying current with industry developments and providing accurate and valuable information, GlobalCoinResearch.com is a trusted source for insightful news, research, and analysis.
Disclaimer: Investing carries with it inherent risks, including but not limited to technical, operational, and human errors, as well as platform failures. The content provided is purely for educational purposes and should not be considered as financial advice. The authors of this content are not professional or licensed financial advisors and the views expressed are their own and do not represent the opinions of any organization they may be affiliated with.