Blockchain and cryptocurrency, once brand new concepts have now become the center of attention. Even with the volatility of the crypto market, blockchain adoption is growing very quickly. Mass adoption has been a long-standing goal for the blockchain and crypto industry. Almost every business in this space strives for mass adoption in one way or the other. However, even at its peak, there’s still a long way to go.
If you were to make a comparison, then the internet itself was in a similar situation, back when it was a niche and not something even a child knows and has access to. However, with the launch of social media, particularly Facebook in 2004, the whole dynamic changed. The internet saw an influx of new users from across the globe who perceived it to be one of mankind’s greatest innovations. Social media have been an important part of the internet ever since the adoption of the second iteration of the world wide web, also known as Web2.0. It wouldn’t be wrong to say that social media is the reason for the global adoption of the modern internet.
SocialFi in simplest terms is social media built on the blockchain and in this article, we’ll find out what it truly is and why we think that just like traditional social media, SocialFi will be the key to global blockchain adoption.
What is SocialFi?
SocialFi is short for Social Finance. It’s the combination between social network and decentralized finance.
A SocialFi platform works similarly to popular social networks like Facebook or Twitter. It has all your favorite social features: friends, groups, chat, comments, like… but also adds the benefits of a blockchain-based platform.
SocialFi platform provides various DeFi services like social trading, staking, yield farming, NFTs marketplace, and many more. These services allow participants to invest and earn from activities on the platform.
Unlike the average social network where one big bad company can take hold of all the data, SocialFi networks spread the data throughout a web of nodes, and everyone who helps maintain functionality is financially rewarded. Security and privacy are improved, data breaches are minimized and single points of failure are eliminated.
Why SocialFi is revolutionary?
There was a time when cryptocurrency was only a niche market. Things have changed, giant social media corporations are starting to embrace crypto and allow millions of their users’ easy access to blockchain technology. Twitter is the first big name to encourage the use of cryptocurrency as a payment method by rolling out bitcoin tips within its platform. The company also enabled users to connect their crypto wallets and authenticate the ownership of NFTs they tweet with a special badge. Meta founder Mark Zuckenberg has also teased the inclusion of NFTs for Facebook and Instagram. Reddit has just released its NFT avatar collection.
This is where SocialFi comes in. At present SocialFi projects may seem like an ordinary part of the growing metaverse, but soon they will become the lifeblood of the ecosystem. This rise of SocialFi has raised a significant amount of attention from major venture capital. Binance Smart Chain’s $500 million Investment Program has listed “SocialFi” as one of its sectors of focus. Reddit Co-Founder and Solana Ventures also announced a $100 million fund to power the next generation of Web3.0 Social Media. Moreover, in what could be the largest crypto fund ever, the venture capital firm Paradigm announced a $2.5 billion funding for web3 and crypto startups.
The future of SocialFi and mass adoption
Mass adoption is one of those things that is easier said than done. It is quite a challenge to convince a significant portion of the population to adopt emerging technology. This is where social media could be crucial. Social media networks have a universal appeal and with things like SocialFi and decentralization coming into the picture, they could be the very key to unlocking mass adoption. And given their obvious advantages, it is only fitting that they take over the next stage of crypto adoption just like how social media did with the internet.