The blockchain-based Web3 sector is full of buzzwords and the latest to rise to the top of the heap is called SocialFi. Composed of two words: social and finance, SocialFi is a Web3 sector category that brings together social networks and decentralized finance (DeFi). Essentially, the concept of SocialFi is to bridge the gap between existing social media platforms and Web3. The sector is experiencing growth especially in the US, Canada, Germany, France, the UK, China and India.
SocialFi apps allow users to earn rewards for posting high-quality content while giving them more control over their data and the content they post on social media. Barterchain, SocialTrader, ChatMint, and Troop Finance are among some of the popular SocialFi apps available for use.
SocialFi applications are also called DAOs or Decentralized Autonomous Organizations. These platforms and protocols are not controlled by a single entity, in fact, decisions on how to grow these platforms are made based on what their community wants. This prevents apps from being clamped down on censorship-related issues, giving users more control over their right to freedom of speech and expression.
Apps that belong to the SocialFi category come with their native utility tiles in the app. Creators can use these tokens to monetize engagement on their posts across social networks. Instead of a company making money from sharing content on the platform, SocialFi's apps, or DAOs, allow creators to earn capital from their posts and content. Rewards are usually cryptocurrency based.
According to CoinGecko, the total market capitalization of the SocialFi token, as of May 9, stands at $5.28 billion (roughly Rs. 44,091 crore). SocialFi's growth season is just around the corner, “competing for attention,” says a recent research report published by K33 Research.
In the report, blockchain analyst David Zimmerman noted that the recent launch of the $FRIEND token by the SocialFi platform Friend.tech has been by far the “most anticipated SocialFi air launch to date.”
The report published in K33 Research also said: “The market is always hungry for the next promoted product. Fantasy Top is positioning itself for this by hosting a series of incentivized competitions.” The Fantasy Top allows users to buy/sell virtual trading cards from Twitter/X accounts and use them to compete in tournaments.
The SocialFi market size is expected to grow from $2 billion (roughly Rs. 16,702 crore) to $20 billion (roughly Rs. 1,67,022 crore) in the coming years. Digital engineering and IT firm Systango said in a research report last year that the SocialFi category of Web3 apps has already seen 14 million users of which five million are active.
