What is SocialFi? Top 5 Noteworthy SocialFi Projects in 2024

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The integration of social media with blockchain technology is a bold and exciting development, opening up immense growth potential in the world of cryptocurrency, particularly in the promising field of SocialFi. So, what is SocialFi? Which projects are the most noteworthy in this domain? Let’s explore these questions with AZC.News!

What is SocialFi?

SocialFi is the fusion of social media, blockchain technology, and decentralized finance (DeFi). It represents a decentralized Web3 solution that enables users to create, manage, and own their social media accounts and content.

SocialFi stands out by allowing content creators to have greater control over their data, freedom of speech, and the ability to monetize based on interactions. Users typically earn income through cryptocurrency, with NFT technology facilitating identity management and digital ownership.

SocialFi projects often operate as decentralized autonomous organizations (DAOs), aiming to avoid centralized censorship. With the advancement of blockchain technology, SocialFi infrastructure can efficiently handle social media interactions.

Why Was SocialFi Created?

DeFi Market Growth and Saturation: The DeFi market experienced significant growth from 2020-2022 and began to saturate. SocialFi emerged as a new development to expand the market and attract new users.
Addressing Web2 Social Media Limitations: Web2 social media connects communities but lacks transparency and data ownership. SocialFi integrates DeFi and social tokens to enhance user interaction and motivation.
Growth of the Web3 Community: The expanding Web3 community has a growing demand for content sharing. SocialFi offers a decentralized method for users to control their assets and data.
Support from Major Players like Binance: Although still small, SocialFi has gained attention thanks to major players like Binance. Since April 2022, Binance Labs has been seeking SocialFi projects to invest in, setting trends and attracting followers.
Development of Social Tokens: Social tokens, first mentioned in March 2021 with projects like Rally and Bitclout (DeSo), allow brands and individuals to issue their own tokens, increasing interaction and creating value through token features.
Integration of NFTs into SocialFi: SocialFi can use NFTs to represent intellectual property rights for artworks, images, music, or content shared on social media, protecting copyrights and enhancing community reach.

Why is SocialFi Important?

SocialFi is creating a revolutionary change in social media by combining the power of social networks with the decentralized nature of Web3.

Decentralization: SocialFi removes intermediaries, giving users control over their data and income. Distributing data across web nodes reduces privacy breach risks.
Content Control: SocialFi balances content moderation and circulation. Users can manage and interact with content, increasing freedom of speech.
Monetization: Content creators and followers can earn through various means, such as using their own tokens, selling exclusive products, or NFTs.

Limitations and Barriers of SocialFi

Despite the benefits SocialFi offers, there are several challenges to overcome to attract users from Web2 to Web3.

Complexity: SocialFi platforms can be complex and difficult to understand for users unfamiliar with decentralized wallets and blockchain activities.
Scalability: Current blockchain technology has limits on the number of transactions it can process simultaneously, causing delays and high fees, reducing platform attractiveness.
Legal Regulations: Cryptocurrency and decentralized finance regulations are unclear in many countries, making it challenging for SocialFi projects to operate and posing legal risks for users.
Security Risks: Ensuring security for SocialFi platforms is more complex than traditional DeFi or social media projects, requiring close collaboration between users and projects to prevent security breaches.
Adoption Limitations: While SocialFi has great potential, its popularity remains low due to the lack of push from major players. Many projects have yet to be applied to create real value.
Content Control Framework: Decentralized social networks allow users to share content without control, but regulations are needed to ensure shared content does not infringe on rights or negatively impact others.

Top 5 Prominent SocialFi Projects in 2024

Cyber (CYBER)

A multi-chain decentralized social network protocol providing infrastructure for developing social media applications. Cyber allows users to own their digital identity and data, share content, and interact. Using account abstraction technology, Cyber simplifies cryptocurrency use and offers a decentralized social media experience. The CYBER token allows users to vote on governance proposals and pay transaction fees.

CYBER raised approximately $30 million from Multicoin Capital, Binance Labs, etc.

Project Galaxy (GAL)

Provides community-building solutions for Web3 projects, creating a network of credentials on an open and highly connected infrastructure. It helps Web3 projects connect with communities through mission chains and giveaways, fostering connections between members and projects. The GAL token enables fee payments and governance rights within the ecosystem.

Galxe raised about $35 million from Coinbase Ventures, Binance Labs, etc.

Friend.tech (FRIEND)

The largest SocialFi platform built on the Base blockchain, allowing users to connect and interact through the social token ‘Keys’. Keys provide access to private conversations, giveaways, and other account-related perks. Friend.tech offers better data privacy and allows users to actively participate and earn on the platform.

Friend.tech raised funds from Paradigm, amount undisclosed.

Farcaster

A Social Graph protocol focusing on multiple decentralized social media applications. Users are represented by ENS (Ethereum Name Service) and managed by data Hubs, communicating with the Optimism and Ethereum networks. Farcaster leverages blockchain technology to effectively connect and manage user identities while maintaining decentralization and anonymity.

Farcaster raised $180 million from a16z, Coinbase Ventures.

The Open Network (TON)

A Layer 1 blockchain using Proof of Stake (PoS) consensus to improve user experience by processing transactions quickly with low fees. Developed by Telegram, TON aims for widespread cryptocurrency adoption, creating a distinct Web3 platform with DeFi, Dapp, and DAO. TON collaborates with the TON Foundation to support over 700 million Telegram users worldwide.

Conclusion

SocialFi is rapidly developing with great potential and advantages, promising to become a new trend replacing Web2 applications.

This article provided insights into SocialFi and the top 5 notable projects in this field. We hope you found this information helpful.

If you have any questions or concerns, feel free to leave a comment, and AZC.News will address them promptly!