What is social media now, and how does it work?
We’ve all at least heard of social media giants like Meta’s Facebook and Instagram and platforms like X (formerly Twitter), and most of us have profiles on these platforms. According to a Kepios research published by DataPortal, in July 2023, more than 60% of the world’s population, or about 4.88 billion users have registered profiles on at least one social media platform.
But below the surface, social media platforms are money-making machines that can easily interfere with our perceptions, worldview, and well-being.
Traditional social media platforms primarily generate revenue through advertising, by selling ad space, and promoting content to their vast user bases. They design algorithms to maximize user engagement, often favoring sensational, controversial, or emotionally charged content. This can lead to the spread of propaganda, amplify social divisions, and foster addictive behaviors, which can negatively impact mental well-being and societal cohesion.
As a result, what is profitable for the platform may not always align with the best interests of the users or society. And what’s possibly the worst part of how social media works today - these platforms collect data every second of the day and often know their users better than their own family and friends.
On misinformation, censorship, and the pitfalls of social media
While on the one hand, social media has brought an unprecedented level of connectedness around the world, the behind-the-scenes operations of these platforms have long been put into question.
The significant advancement in connectivity social media has brought forward turned into a double-edged sword with censorship, manipulation, and the rise of echo-chamber content plaguing user’s feeds. What’s worse, social media platforms have now become key players in global politics, and the way the world works, influencing all aspects of our daily lives.
One of the more significant cases when the abuse of social media was brought into the spotlight was the Cambridge Analytica scandal, which saw the unauthorized acquisition and use of data from over 50 million Facebook users by the political consulting firm, Cambridge Analytica. This data was used to create psychological profiles and target users with personalized political advertisements during campaigns, including the 2016 U.S. Presidential election. The data was obtained via a quiz app on Facebook, which not only accessed the data of the individuals who took the quiz but also that of their friends.
On the other side of the pancake, content moderation threatens free speech. Most recently, actor Rusell Brand was notoriously demonetized on several major platforms, including YouTube, following allegations, but not a conviction, of committing a sexual offense. Regardless of the veracity of these allegations, the platform scrapped monetization and singlehandedly cut off his earnings. The more worrying aspect of this scandal, however, is that UK Government officials from the Culture, Media, and Sports Committee sent out emails to video-sharing platform Rumble’s CEO Chris Pavlovski to also stop monetizing Brand’s posts going out to over 1.4 million followers, effectively meddling in a private organization’s content moderation and monetization policies.
Aside from direct requests to private organizations, governments worldwide are now increasingly issuing legislation that aims to battle misinformation and hate speech. Canada introduced Bill C18, while the European Union enforces the Digital Services Act. And while these regulatory shifts presumably protect users, they are giving a lot of power and control over social media and free speech to the government bodies.
Moreover, social media platforms increasingly implement strict but not necessarily justified or disclosed demonetization policies for users. A simple word like “Amen,” as highlighted by X user Chaya Raichik, can be red-listed and cause demonetization on posts, effectively hampering creators’ earning opportunities.
In combination, these behind-the-scenes aspects of social media have created an air of distrust and concern among users. As the social media space is structured right now, the companies operating these platforms own users’ photos, friend lists, and personal data, having the power to take away access to all of these at the push of a button. And while traditional social media platforms still reign in the space, Web3 alternatives are now pioneering better solutions, bringing control back into the hands of users.
Web3, SocialFi, DeSoc and the social graph
The transition from Web2 to Web3 on a global scale is in its very early stages. However, with the emergence of SocialFi, representing the intersection of social media and decentralized financial systems, a social media space powered by Web3 is already underway.
SocialFi is about monetizing and tokenizing social aspects and is not necessarily an on-chain element, while DeSoc is about decentralizing the content, relationships and interactions in Web3 social media networks. This enables a framework where content creation, revenue, and user data are fully interoperable and controlled by users. In other words, users’ profiles, along with all content and data they generate, can be moved from one app to another in their entirety.
One of the critical elements that SocialFi aims to enhance is control over users’ social graphs. In the context of social media interactions, a social graph maps the relationships and interactions among users on a platform. It represents how individuals are connected to each other through friendships, follows, likes, shares, or comments and can be used to analyze social dynamics, tailor user experiences, or target advertisements. In legacy social media platforms, social graphs are the most valuable asset platforms have when trying to sell views to advertisers.
However, what SocialFi and the Web3 revolution are bringing to the space is complete autonomy and total control over users’s social graphs. It allows each individual user to monitor, and decide the fate of their data, followers, content, and interactions as well as the platform or app they chose to create these on. What’s more, with the rise of interoperability between Web3 social apps using the same social protocols, users can create social graphs that are easily transferable across different platforms and applications.
In this way, Web3-based social platforms push for transparency as social graphs are built on publicly audited smart contracts. Users' privacy is also protected because they can opt to use the most secure app out there without losing any of their data, content, or connections. Last but not least, an ecosystem that is rooted in transparency and interoperability creates a naturally competitive field where social apps will strive to keep their users and treat them more like stakeholders instead of banishing and blocking them.
Powering SocialFi with social protocols and apps
Different Web3 social apps are provided interoperability solutions through blockchain protocols like Lens and CyberConnect. These protocols give users ownership and control over their social connections by allowing them to easily take their profile across different social apps that support the same protocols.
The SocialFi ecosystem consists of three primary structural layers. At the foundation, blockchains offer the main infrastructure that allows decentralization and verified ownership of social graphs. In the second layer, social protocols build these decentralization avenues on top of the blockchain structure and create an opportunity for application developers to integrate decentralization features. Finally, the top layer consists of SocialFi apps. These can be entirely decentralized and based on blockchain technology or only utilize some features offered by the social protocols and are still operated by a centralized entity. However, thanks to social protocol integration, SocialFi apps allow users to control the entirety of their social graph and easily move it from one app to another based on features like ad revenue, subscription models, and engagement.
Lens Protocol is a blockchain-based open-source social graph aimed at redefining social media in a decentralized manner. Unlike traditional platforms, it allows users to own their digital connections and monetize content. It operates via a graph database, creating a network showing members and their relationships, with smart contracts ensuring data accessibility, unlike centralized services. Its modular design facilitates feature additions while securing user relationships and content and promoting cross-platform interoperability.
Functioning in a similar way, the CyberConnect protocol is a Web3 social network protocol allowing developers to build social apps where users own their digital identity, content, and interactions. It fosters on-chain connections, with its v3 upgrade introducing a multichain future for Web3 social DApps, comprised of three core components: CyberAccount for identity infrastructure, CyberGraph for recording user content and connections, and CyberNetwork for scalability and global reach.
Protocols like Lens and CyberConnect form the infrastructure and framework for social media platforms to create user-centric applications based on decentralized data storage and zero control from third-party entities over users’ personal information and social graphs.
What are decentralized social media apps, and how do they work?
To illustrate how dramatically different decentralized social media platforms are from legacy names in the industry like Facebook and TikTok, we’ll look at Phaver - a Web3 social app purpose-built for the permissionless and noncustodial ecosystem within the Web3 space.
Launched in 2022, with the release of Lens Protocol, Phaver aims to bridge the gap between Web2 and Web3 users. It facilitates accessible and well-known sign-up practices with a simple email and password combination that does not require a Web3 crypto wallet. However, once registered, users can start integrating on-chain functionalities by minting a blockchain-based Phaver profile. The on-chain profile allows users to publish their content on the blockchain through Lens protocol, and have full ownership over their social graph, on the protocol level.
Importantly, once users start using Phaver, they are incentivized to be active participants in curating content on the platform. Replacing the infamous social media algorithms with incentivized user curation allows Phaver to both ensure the quality of the content it offers to users and to give content creators and viewers a chance to participate in monetization.
To date, the Phaver app has generated over 250,000 app downloads across Android and iOS with 100,000 monthly active users and is steadily pushing for the decentralization of social media globally. Thanks to its integration of protocols like Lens and CyberConnect, this decentralized social app puts control back in users’ hands.
Challenges for SocialFi
A significant hurdle is the onboarding process; familiarizing individuals with blockchain technology and motivating them to transition from traditional to decentralized social platforms can be daunting. Simplifying onboarding is crucial to attract a broad user base.
Scalability is another mountain to climb. As user numbers swell, ensuring the network remains fast, efficient, and cost-effective is imperative. Solutions to scale the infrastructure without compromising user experience or incurring exorbitant fees must be identified and implemented.
The evolving landscape of social media, driven by the innovative frameworks of SocialFi, and applications like Phaver, heralds a new era of user-centric interactions. And while the road to widespread adoption is steep, the promise of decentralized control and monetization paves a path for a more inclusive, transparent social media ecosystem focusing on user empowerment.
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