What Is SocialFi

SocialFi stands for social finance: the combination of interaction and finance to build a single entity that is vital in developing social apps. SocialFi uses social data, especially on how people interact with technology and cryptocurrency in a decentralized way. It began with the concept of blockchain, especially when GameFi started gaining names among users. Social media and similar platforms have a lot of advantages for users, and the concept of these is used for cryptocurrency and global interaction. This resulted in the concept of SocialFi: a decentralized platform in a social form. Let’s talk about it in detail below to figure out how the platform works.

How SocialFi works

It functions like social media, allowing users to create an account, perform operations, and in-platform transactions. However, the cool fact — it’s also decentralized: all the operations are homogenous, transparent, and end-to-end encrypted. It also works without single ownership – all users have access to the data listed on the network, but they are uniquely made such that they cannot be altered.

SocialFi allows users to engage in media sharing: videos and photos. For these actions, they are rewarded in cryptocurrency. SocialFi operates on a Web3 decentralized platform: a network that manages and permits users to create data generally used by other participants who accumulate assets in the Crypto World.

All the features of a typical social media are incorporated into SocialFi, so that everyone has access to the data listed on the platform. It works by improving transparency so that all transactions performed on the platform are decentralized – they are exposed but cannot be changed or manipulated.

Why SocialFi is popular

SocialFi is similar to centralized social networks, which are popular, so expectedly it’d be in demand naturally. Aside from the obvious popularity, the whole operating system makes it more appealing to everyone. Let’s see the main reasons why SocialFi is so relevant today:

1. It protects user data in a decentralized form. The content produced by an individual is unique: it cannot be duplicated or manipulated by other people.
2. SocialFi is able to accumulate crypto when engaging in different activities. There are options for in-platform transactions, buying, selling, and withdrawing cryptocurrency.
3. Users get full control over sharing their content. It can help to liquidate censorship and protect individuals’ accounts from being removed or disconnected.

Thus, we can see many advantages of SocialFi, as a fresh phenomenon in both digital and crypto industries.

Sometime soon, we’ll probably see giant corporations using SocialFi, which will become a regular practice. Nowadays, it’s just gaining strength, attracting more attention and love of users and breaking into various spheres of life, including cryptocurrencies.

How SocialFi affects the crypto sphere

Simplification and globalization

The technology we are talking about is easy to use and it promotes smooth access to the Crypto World as a decentralized network. Social networks are highly popular among people; it is likely impossible for a millennial to exist without having at least one account signed up on Facebook or Twitter. The same idea is conceptualized in SocialFi so that people gain access to crypto space without a much broader step: via just owning the decentralized social media account.

Copyright issues

A lot of important data is available on typical social media, increasing copyright matters, among others. A decentralized social network allows users to store/own unique assets that no one can alter. In turn, the crypto space increases in value since anyone who wants to keep belongings in a social platform can do so with SocialFi, without bothering about copyright issues.

Increased demand for cryptocurrency

As the crypto sphere gains price, recognition and interaction, the cryptocurrencies are available on SocialFi networks too; the availability exposes users to buying and selling. Most people who are skeptical about cryptocurrency realize the effect of it on decentralized social networks – according to Changpeng Zhao (Binance CEO), cryptocurrency will increase the price by 15% in 2022 due to the global engagement in SocialFi.

Monetization

It is another great opportunity for creators to earn more while doing what they love. SocialFi allows individuals to create and expose their videos and images to the world — these media files are uniquely made on the basis of blockchain. Anyone can buy or sell them to gain profit.

SocialFi projects

Even though SocialFi might sound like a future technology, some companies have already implemented it into their platforms. Let’s check out these pioneers.

Kala Network

The nextgen Web3 SocialFi project, Kala Network, implements SocialFi for users to gain KUDO tokens via socializing and communicating with friends and to increase profit by purchasing PEN NFTs, get the level up and mint more NFTs.

Genopets

This one is a F2P and Move-to-Earn project resembling Pokemon Go. Genopets rewards gamers with KI tokens for staying active. The level of their creature increases as users gain experience via activities in real life.

Rally

It’s a platform giving creators an opportunity to build the digital economy, communicate with their community and profit through promoting their ideas. The NFTs launch is not charged with any fees, and users are provided with all the instruments needed to interact with non-fungible tokens. People are rewarded with RLY tokens for participating in the economy of the platform.

STEPN

One of the most popular SocialFi and GameFi projects today encourages users to be healthy and do sports more by rewarding them with GMT tokens. The application of STEPN offers a wide variety of virtual sneakers. There, gamers can purchase, sell, and even breed their sneakers to get a brand new pair. Sounds fantastic, huh?

AUDIUS

It is a decentralized music platform containing the features of social media. There, fans can share their works, as well as musicians are able to publish their new products. Users get AUDIO tokens for completing tasks such as uploading tracks, inviting their friends, downloading the application and so on.

Woonkly

Woonkly Metasocial Network is a decentralized social network, where users are able to monetize their posts through NFTs and gamification. Literally anything here can be easily converted into NFTs, and for selling it creators are getting WOOP tokens. Also, Woonkly is using IPFS (Interplanetary File System) for downloading the content.

The future of SocialFi

Even though the infrastructure and economic headwinds, the Social Finance based platforms look promising. The modern reality is fastly moving to creative economy models and this appears to be a huge step for the sector.

SocialFi will probably claim robustness after a couple of downs, which they have to survive. In the situation where the market supports the progress and contribution perspectives of SocialFi, the sky will be the limit.

Moreover, the SocialFi apps have a good chance to boost social networking and give creators a chance to get a stable income. It will also present a whole new user experience delivering a secure way to earn and trade NFTs.

Considering the already existing advantages of SocialFi, it seems like it’s here to stay and change networking.

Conclusion

SocialFi is a discovery that may not be called a fresh one because it is more like a modified version of social web in a decentralized world. This implies that the initial concept is not new to everyone who truly understands the terms “social media” and “cryptocurrency.” So, the future of SocialFi seems promising for all crypto developers, users, and NFT creators.

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.