“Social media has revolutionized the way we communicate and interact. It has permanently sent the telegram service to the bone yard”–Paul Ebeling
On average, we spend 2 hrs on social media daily. Social media platforms have made us accept a radically different world we live in.
In that it is now a Key part of each of our lives. So much so that a person without social presence is a misfit.
However, the current market is dominated by Web 2.0 platforms such as Facebook, Instagram, Twitter and TikTok. These centralized players have monopolized the space, giving them the authority to not always operate in the user’s best interest.
SocialFi is the latest offering from Web 3.0’s stable that intends to infiltrate the present status quo. In simple terms, SocialFi, short for ‘social finance’ is an amalgamation of social media and DeFi.
Forged under the ethos of Web 3.0, SocialFi presents the opportunity to create, manage and own the content generated on a social media platform. As a result, participants have more control over their privacy and multiple ways to monetize their content and followers.
In short, SocialFi cuts through the equation and hands power back to the users.
The platforms work on the blockchain, and key decisions over tokenomics, content moderation and engagement are handled by decentralized autonomous organizations (DAOs) such as KnightsbridgeDAO. Click here
Every time we use a social media platform, we accept their terms and conditions, which often seek to collect personal data such as hobbies, health info, browsing history, etc. TikTok even collects biometric information about our faces and voices for as-of-yet unknown reasons.
In a Pew Research survey, 81% of respondents felt they have little to no control over how their personal information is used.
Social media is free, but “if the product is free, you are the product.” Every year, a single user contributes about $36 to Google’s ad revenue.
The figure serves as an indicator of each user’s value to these megacorporation’s that make money by monetizing customer data.
There is an apparent misalignment of interests.
SocialFi’s current positioning as a decentralized platform intends to tackle such issues by letting users have significantly more control over their data.
Instead of holding everything on a centralized server, data will have to be stored through a series of web nodes. Thus, reducing the risks of breach and single point of failure.
Also, SocialFi unlocks a whole new world of financial autonomy.
Firstly, the web nodes are rewarded for storing data, and secondly, there are plenty of avenues for influencers to monetize their content.
Even though the space is beginning to spread its wings, some platforms have started to garner attention.
These apps primarily use social tokens to drive the economy. Influencers have the ability to manage their economy on the platform through these in-app social tokens.
They can, for instance, create their own utility token that fuels their mini economy. Holders of the particular token can interact with the influencer’s content as per the assigned privileges decided by the influencer.
If the influencer’s social clout increases, the token’s value also rises. Thus, also providing followers an opportunity to grow along with their favorite influencer.
Integration NFTs becomes much simpler with SocialFi apps. Anyone can directly mint and distribute NFTs on the platform without the hassle of using a 3rd party.
Users can interact with NFTs more openly. While NFTs as avatars are already in use across several Web 2.0 platforms, SocialFi can also integrate the avatar with a futuristic metaverse.
Another lingering issue with traditional platforms is freedom of speech. Although free speech is more often than not misused in the online space, centralized platforms constantly face stark criticism for the way they manage hate content.
SocialFi can liberalize the whole ecosystem because it will not be under the pressure of higher authorities such as state governments.
As the internet shifts toward decentralization, SocialFi is destined to gain prominence.
However, a Key challenge is infrastructure. Facebook generates four petabytes of data every day. This means for SocialFi to work, it needs to create storage capacity for millions of gigabytes.
Current tech is not yet ready to handle a massive user base, but expectations are that things should improve as systems get better.
Despite the prevailing challenges, SocialFi has the potential to add immense utilitarian value to the crypto and NFT space and drastically alter the way we communicate just as centralized social media platforms did in the 90s.
Knightsbridge monitors cryptocurrencies as regulations and technology evolve. While some traders have made money on the change in price of Bitcoin or other cryptocurrencies, most investors continue to treat them as a speculative asset primarily for trading with money outside a traditional long-term portfolio.
The Knights Platform is an electronic network that links the trading floors of every relevant Crypto Exchange
Market participants, Brokers and market makers can take a price on any of the linked exchanges to find and execute the best price available. Eventually, as they are on boarded, a broker on the floor of one exchange could directly place an order through Knights rather than going through a broker on another exchange.
A tip of my hat to sovereign individuals with satoshis and Bitcoin in cold storage with our firm. Click here
Have a prosperous day, Keep the Faith!