SocialFi crypto is a revolutionary concept bridging the gap between DeFi and Web2 social media networks. It gives social users a decentralized environment in which they can earn money by engaging.
SocialFi, short for Social Finance, is a blend of DeFi and social media networks. It is Web3’s answer to social networks, where users have full control over their content due to the lack of a centralized authority operating the networks. This way, SocialFi crypto gives content creators value back.
1. DAOs control platform governance
The role of Decentralized Autonomous Organizations (DAOs) in running SocialFi crypto platforms is crucial. They control platform governance and ensure that no central authority controls network user activity. The DAOs also prevent programmers from attempting to alter the platform’s code. Every decision, including incentive sharing, is made by the DAO.
2. Monetization depends on SocialFi crypto
Platforms are monetized through social DeFi tokens, which can be native crypto tokens or other assets traded on the platform. Content creators can develop their own tokens and use them to earn money by interacting socially. SocialFi crypto platforms let creators cash in on their influence. According to industry participants, SocialFi crypto’s business model is far more desirable than that of modern-day social media titans.
3. Seamless on-ramp services for SocialFi crypto users are now fact
Global payments infrastructure provider Mercuryo has partnered with Tomo, an innovative Web3 SocialFi application, to offer seamless on-ramp services for its growing SocialFi crypto user base.
The partnership brings SocialFi and crypto together. It enables users to purchase cryptocurrency effortlessly using credit or debit cards or Apple Pay, paving the way for mass adoption in the nascent SocialFi crypto space. Creators will be able to monetize content as fans obtain exclusive access to them via chat rooms and DMs.
Tomo operates on Ethereum rollups, Linea and Base, offering a ready-to-use, simple app interface for its growing community. Web2 users from platforms such as Instagram or X can seamlessly transition to Tomo without any technical requirements or Web3 knowledge.
Marco Robustelli, Chief Marketing Officer at Tomo, commented on the SocialFi crypto partnership:
At Tomo, we constantly seek solutions that enhance our users’ experience. Partnering with Mercuryo is a significant step in our mission to seamlessly transition a vast number of Web2 users to the Web3 ecosystem. Mercuryo’s intuitive fiat on-ramp experience is precisely the kind of innovation that aligns with our vision of making the shift to Web3 as familiar and straightforward as possible for our users.
Aviessa Khoo, Executive Director, Singapore, at Mercuryo added on the subject of SocialFi crypto:
Tomo is part of a new wave of Web3 innovation taking place in the SocialFi space. Our on-ramp solution provides Tomo’s growing user base with a user-friendly interface for converting fiat into crypto. We are looking forward to growing together on what promises to be an amazing journey.
SocialFi is not a new trend. Between its launch in August 2023 and October 2023, Friend.tech saw inflows of more than $420 million, according to Dune Analytics. On December 6, however, Friend.tech recorded a historic low. Interest in the SocialFi platform has been renewed in the wake of recent developments, such as expansion beyond X and a possible FRIEND token. In anticipation of these, more than $7 million has flowed into the future SocialFi crypto platform.
Currently, the top SocialFi crypto tokens by market cap are Theta Network, Galxe, Mask Network, Decentralized Social, and CyberConnect.
The beginning of SocialFi crypto
The inception of SocialFi crypto can be traced back to March 2021, when social tokens emerged. Projects like Bitclout and Rally let people, brands, and organizations create SocialFi crypto tokens, gaining significant attention. Influencers could engage with followers through these tokens and add value to their platforms through token features. The social element of the tokens laid the foundation for SocialFi crypto project growth and helped make the Web3 community more active.
Reasons for the genesis of SocialFi
SocialFi emerged due to saturation of the DeFi market, the need to overcome the social media limitations of Web2, and growing Web3 communities.
After substantial growth of the DeFi market from 2020 to 2022, SocialFi came to symbolize a new era in the broader market’s evolution.
Current social media platforms fall short in terms of user data ownership and transparency. SocialFi crypto projects use social tokens and integrate DeFi features to eliminate these shortcomings and enhance user engagement.
The growing Web3 community has played a critical role in propelling SocialFi crypto to the forefront of the space. As it continues to expand, there is surging demand for content sharing. SocialFi crypto gives users more control over their data and assets on social networks through its decentralized approach.
