Why Are Social Media Platforms Expanding Into SocialFi And NFTs?
Main Takeaways:
NFTs are revolutionizing the world with their innovative technology, and many industries have experienced rapid changes.
A decentralized, open and user-controlled ecosystem, SocialFi protects the privacy and safety of users and the ownership of users' personal assets.
As SocialFi projects are gaining more attention, social media giants like Meta, Twitter and Reddit are expanding their exploration of the space through NFT integrations into their platform.
In this article, you’ll learn what SocialFi is and why major social media platforms are adopting SocialFi by venturing into the world of NFTs.
DeFi, NFT and crypto have been trending on social media since 2020. But what do you get when you merge social media, DeFi and NFTs all into one? A powerful ecosystem called SocialFi.
The current model of social media landscape as we know it is inherently extractive. Most major platforms take their users’ data and sell it to serve them increasingly intrusive advertising. However, with the building of Web 3.0 and the metaverse, we collectively witnessed the explosive growth of DeFi and NFTs making headlines internationally. We also saw well-established cryptocurrencies such as Bitcoin and Ethereum, and even a select few altcoins rise to new highs. With that said, what more will the future of DeFi hold? This is where SocialFi comes in. Keep on reading to learn more about SocialFi, why social media giants are interested in this ecosystem and how this all relates back to NFTs.
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What is SocialFi
SocialFi, short for social finance, refers to the combination of social networking and blockchain finance. The SocialFi space lets users earn income from content creation, participation in DAO governance, NFT minting, communicating with other users, watching entertainment and gaming. Unlike the Web 2.0 social networks that we’re familiar with, SocialFi projects provide higher levels of privacy and security for users' personal data, fairly distribute advertising revenues and offer a more valuable user experience.
Social Media Companies Entering The SocialFi Space By Embracing NFTs
As the SocialFi space gains more momentum, more and more social media giants are expanding the exploration of NFT integration into their platform. Below we’ve listed the companies actively integrating or exploring the NFT space.
Facebook/Meta
With an estimated user base of over 2.89 billion as of 2021, it comes as no surprise that Facebook ruled communication in Web 2.0. Facebook, now known as Meta, is making strides in its transition towards Web 3.0. Meta's move in building the world's biggest social media metaverse.
Although the photo-sharing platform hasn't hopped onto the NFT train yet, the company's CEO revealed late last year that they are exploring the NFT space in hopes of making NFTs more accessible to their user base.
With plans to integrate cryptocurrencies into their platform, Twitter has rolled out a new feature that allows their Twitter Blue account users to show off their NFT as their profile pictures.
Not missing out on the opportunity to emerge into the SocialFi space, Reddit followed closely behind Twitter with the NFT profile picture rollout. On top of planning to create an NFT marketplace in the near future, the social media giant has plans to convert people's Karma points into crypto tokens.
YouTube
As part of efforts to expand their ecosystem, YouTube has started looking into NFTs as an alternative source of revenue for their creators. To start, YouTube has been distributing personalized NFTs to influencers on the platform and has announced that creators will be able to monetize the video content they create and sell them as NFTs.
Why Are Social Media Giants Obsessed With NFTs
NFTs are currently not made, bought or sold on any social media platform. However, the success of an NFT project relies on how well the creator markets their work on social media. And as social media platforms passively shape the future of NFTs, tech conglomerates like Instagram, Twitter and Reddit see this as an opportunity to get directly involved in the space.
Most NFT owners believe that displaying the NFT they purchased on social media adds value to their holdings. Thus, providing crypto-compatible social media companies the chance to reach and retain new NFT-oriented customers. Additionally, the social media companies with the most influence in the NFT space can impact the development of Web 3.0 since this iteration of the web revolves around the concept of storing user data on blockchains.
SocialFi NFT Trends On Social Media
NFT Avatars
Avatars have long been used in the social media space to represent a user's identity online. In SocialFi spaces, an NFT Avatar can represent the owner’s identity in both the crypto world and the futuristic metaverse. For example, Twitter Blue allows users to verify and use their NFT as their profile picture, and more social media platforms are following suit.
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Buying and selling directly on social media platforms
Decentralized Finance apps are gradually being introduced to platforms like Facebook and Twitter to provide users with a next-generation personal finance experience. This means users will be able to send payments, trade tokens, participate in public offerings and much more all on one social network platform.
Making NFTs more accessible to the masses
More open source Web 3.0 application makers, like the Mask Network, are creating decentralized application ecosystems that bridge the existing Web 2.0 and Web 3.0. In hopes of bringing more Web 3.0 applications to traditional social media platforms like Twitter and Facebook.
On top of enriching NFT-related content options by making it easier for people to discover talented creators, DApps like the Mask extension can save NFT creators and NFT enthusiasts a lot of tedious steps. For example, instead of needing two different accounts, one for your social platform and one for an NFT marketplace, content creators and NFT collectors can seamlessly move between platforms, browse for information and shop NFTs with just one account.
Is SocialFi Going To Be The Next Big Thing?
Looking at the trajectory of growth that SocialFi currently has, many believe that it’s a great development in the technology industry and a great way to ensure users' personal interests in the virtual space. Although still in its early stages, SocialFi can significantly impact the cryptocurrency, blockchain and NFT space, and how we operate socially around the world. It’s entirely possible that SocialFi will become an integral part of the Metaverse ecosystem in the near future.
Conclusion
The SocialFi ecosystem can solve copyright problems and allow content creators and users to earn through social interaction while protecting their personal interest in the virtual space. And, judging by its promising growth in the Web 3.0 era, it won't be surprising to see SocialFi take off in the near future.
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DISCLAIMER: NFTs are an emerging asset class that is still evolving. The information in this article should not be construed as investment or financial advice. Always do your own research before making any decision to buy, sell or trade NFTs.