Exploring the Future of Web3 Social: Token Incentives and Digital Economy Ecosystem

In 2017, researchers at the MIT Media Lab believed that decentralized social networks faced three impossible challenges: attracting and retaining users, handling personal information, and advertising issues. However, over time, these challenges that were once considered "impossible" seem to be gradually overcome.

This article, as the third part of a series, mainly explores how to utilize token economic models and incentive mechanisms to address the revenue issues of decentralized social networks.

Create "Killer Application"

The key to the success of Web3 social lies in whether it can create a new "killer app" that offers a truly innovative social experience to attract a large number of users. While we cannot accurately predict the specific form of the next "killer app", we can explore two high-level strategies:

1. Enhance the existing social experience by adding Web3 features.
2. Create a Web3-first social community

Enhance Existing Social Experience through Tokenization

A simple approach is to add Web3 features to mainstream social platforms, such as X-to-Earn projects in the form of tokenization.

The Moons program on Reddit is a typical example. This program rewards users of the r/CryptoCurrency subreddit for posting and curating content. Moons are ERC-20 Tokens issued on Arbitrum Nova, with the issuance amount based on the "reputation" users gain on Reddit. Users can participate in community governance through Moons.

Reddit's community points program allows subreddits to launch their own ERC-20 Tokens and provides an Ethereum-based Reddit Vault wallet to store these Tokens. In addition to Moons, the Brick Token from r/FortniteBR is also a representative of this program.

However, the sustainability of the simple "post to earn money" mechanism is questionable in the long term. Data shows that the actual income of most users is minimal, which may lead to disappointment with this model.

Therefore, Web3 social projects should not overly emphasize "making money," but rather create novel social experiences that users are willing to pay for. The friend.tech project on the Base network demonstrates this, creating a "stock market for X profiles" where users can buy and sell "stocks" of influencers to gain unique access.

Building the first social community of Web3

Another approach is to build from scratch, based on a unique crypto-native community and culture.

Phaver is a typical "Web3 first" social community. It is built on the social graph of Lens, attracting Web3 native communities through integration with other Web3 social identity technologies. Phaver adopts a dual Token model, using a scoring system composed of "reputation" and "points", allowing users to earn rewards and privileges through upgrades.

POAP is another noteworthy project that originates from the "conference culture" of the crypto space. POAP is an NFT that digitally represents proof of a user's attendance at an event or conference. It can serve as a way to kickstart social networks and find like-minded individuals.

Conclusion

The long-term success of Web3 social lies in creating a brand new social experience, rather than merely replicating Web2 mechanisms and tokenizing them. This new experience should be inspired by and rooted in Web3 culture, while also requiring easily understandable use cases to attract a broader audience.

Successful Web3 social media needs to have an open design space that provides users with enough "blank canvas" to create their own use cases. Only when Web3 adopts this design decision, rather than focusing on financialization and on-chain imitation, can we truly begin to build a revolutionary "killer app" that brings Web3 social into the mainstream.