MEXC’s MEXC Talk Show series “MEXC Talk Show – Is the future of SocialFi promising?” Twitter Space event was held on September 26 (SGT) at 10:00. In this roundtable, We invited r/CryptoCurrency Moderator John Murphy, Sarge and Nano to provide our audiences with more SocialFi insights through an open discussion. They are all experienced blockchain community practitioners.
In the Web 2.0 era, Internet giants hold all the data of people on social media platforms, and trap users in the information cocoon through algorithmic push. In addition, the giants gain by using users’ information and creators’ content and do not fairly distribute the profits to creators and users.
Therefore, creating a free, open, and equal decentralized social media platform has become the vision of many Web3 projects. In the social media platform of the Web 3.0 era, people will have absolute control over their social data, which is a decentralized way of socializing. Based on the underlying infrastructure of Web 3.0 and starting from people’s needs for ‘decentralized social’ and ‘decentralized finance’ (i.e. DeFi), SocialFi products are projects that integrate the two needs.
In fact, SocialFi has been very popular in 2021. But what problem does SocialFi solve, and what are its core differences compared to Web 2.0 social products? Does it bring a fairer and freer social media environment to users or is it a new way to generate wealth? Let’s discuss these issues with members of the r/CryptoCurrency community today.
Q1: What are the core differences between social media products in the Web 2.0 era and those in the Web 3.0 era?
John Murphy: In the Web 2.0 era your data is owned and controlled by a company that provides a service: Facebook, TikTok, etc. In the Web 3.0 era the goal is that you will retain ownership of your data, and/or that you will earn ownership in the platform you are using. In the case of Reddit MOONs, the MOON tokens are distributed once a month based on your contributions to the subreddit, and they represent a piece of ownership of the r/CryptoCurrency community. This ownership is a bit nebulous at the moment, but the idea is that your ownership stake and reputation are held in your wallet and can taken with you around the web.
Q2: Can you take Reddit as an example and talk about what problems the SocialFi project solves in the Web 3.0 era?
John Murphy&Sarge: Web 2.0 products are inherently lacking in user ownership of the community, and the majority of the value produced by the community is funneled to the corporation that owns the product. Web 2.0 communities are locked inside apps and platforms, where they do not have independence or control anything of value. In order for communities to become independent from their platforms they need to be able to own them in ways that the platform cannot take away. Prior to the advent of blockchain and Web 3.0 there wasn’t really a feasible solution to this issue.
With Reddit’s switch towards rewarding users with tokens such as Moons they are giving units of ownership to their community members and redirecting where the value produced by the community goes. This makes time spent in the community feel more meaningful and incentivizes the community to grow beyond what it would be capable of otherwise.
Another benefit to Web 3.0 over Web 2.0 is the level of transparency achieved through using a public blockchain rather than private servers. Arbitrum nova network maintains a record of all Moons transactions and account balances that are accessible to anybody, which is far preferable to legacy products where all data would be privately maintained and stored by a single company.
A third issue I see with Web 2.0 products is the lack of openness and portability outside of the platform. When users earn Moons in r/CryptoCurrency they are able to take their reputation with them anywhere on the internet where they are supported, and as they are on a public blockchain anybody can integrate them into new or existing sites. This model allows for communities to grow and expand beyond the confines of Web 2.0.
Q3: We all know that SocialFi products have attracted a lot of venture capital in 2021, and many people are interested in the wealth-making effect of SocialFi. What do you think of this and the future development of the SocialFi sector?
Sarge&Nano: Personally (speaking as u/jwinterm), I think that building a real community around simply the idea of getting rich is not going to be a place that most people want to spend time, and it will short-lived at best. I think that the best path for web3 growth will be from adding a token or other element of ownership to existing communities, like Reddit has done with MOONs. Before the introduction of MOONs, r/CryptoCurrency already had millions of subscribers and was a place that people wanted to hang out and participate – adding MOONs has only made it more attractive. If other web2 giants started down the same path, such as Twitter or Instagram, then I think they would have a huge advantage over nascent start-up projects whose value proposition relies completely on the token at the start.
When it comes to the topic of SocialFi, I believe that many users are very concerned about the soul of SocialFi – social tokens. A social token is defined as “a token backed by an individual’s reputation, brand, or community.” The SocialFi project manages the community by issuing tokens and divides the levels of users according to their activity and contribution to the community. The tokenized rights and interests increase the benefits for creators, cultural producers, and related participants.
Q4 (Let’s welcome SGTSLAUGHTERTV to share about his insights on social tokens)：Where are social tokens being successfully used today, and where do you see them being used in the future?
John Murphy: There have been a lot of other projects that created Socialfi Tokens previously that rose in value previously. In 2017, one of them was in the top 10 tokens by market capitalization, but now that token has fallen well below the 200 spot.
My own personal belief system is that the future of web 3 and big corporations and companies getting into this space is going to be almost everything like reddit’s model: airdrops of avatars and/or cryptocurrencies and then letting the users of these platforms determine the actual monetary value of these digital assets. We’ve already seen one big gaming company (ubisoft) try to sell their own NFTs, and regardless of the fact that it was on a carbon-neutral blockchain, their fans had a major backlash. I believe this was mostly due to the fact that this game company was trying to sell them and not “gift” them to their users like reddit did.
I know there are bigger companies that are watching the situation with reddit NFTs, and maybe there are some who are watching the situation with Moons and other reddit community points. However, the most meritocratic element of all of this is that reddit, as a corporation allows the free market to determine whether or not these digital assets have their own value. When bigger companies see this and what web 3 is capable of, they’ll realize that seeing an NFT that represents something from their own game in games from a different company is free advertising.
Q5: How can we allow social tokens to work within and across centralized platforms such as reddit, discord, etc.?
Nano: Simply put, I believe that if the owners of these centralized platforms mimic the reddit model, with an initial airdrop of a certain amount of tokens and/or NFTs to users, and then let the free market determine whether or not these things have value – that would be the best start possible.
However, with reddit in particular, in the beginning an airdrop was given based on the amount of Karma a user accumulated in the cryptocurrency subreddit. This is extremely specific and specifically “catered” for cryptocurrency enthusiasts. For each platform, determining their own distribution model cannot be a one-size-fits-all solution. I wrote a whitepaper for a social media platform and new token a few years ago, but then I abandoned it because I had an extreme sense of doubt with regards to how to reward good-faith-actors and how to punish bad actors. I could not come up with a perfect distribution and rewards mechanism. I also saw the rise of another very similar project and thought that perhaps they had already created an accurate enough representation of my own idea.
In short, I believe that a good distribution and rewards mechanism for any centralized platform would be to first ensure that the user receiving the initial airdrop or distribution is an authentic user. The authentication process should be rigorous enough that it stops click farms and bots from joining, but also not too complicated to make authentic users think that it is too much trouble to authenticate their own account.
Q6: In fact, the Reddit community has also launched the social token MOONs in 2020. Can you introduce how the MOONs project works and what application scenarios are there?
John Murphy: The best place to start understanding how the project works is the post that Reddit made when they introduced them to the community in 2020.
They are a token distributed by Reddit every 28 days based on how many upvotes you received in r/CryptoCurrency, and they can be used to vote on governance polls about how the subreddit operates, they can be used to buy Reddit Coins to give awards, and they can be used to purchase special memberships that allow you to decorate your username in the sub.
Sarge: Moons are an ERC-20 governance token that are distributed to active users of r/CryptoCurrency every 28 days based on their contributions to the community, which can take the form of content creation or moderating. Users are able to set up an Ethereum wallet dubbed “the vault” using the official Reddit mobile app for iOS or Android in order to store and access their Moons as well as other digital goods.
Moons are a unit of ownership in r/CryptoCurrency and are meant to give users more control over the community. Community members can use their moons that they earn to vote on governance polls that either influence community rules or alter how Moon distribution is calculated. The votes are weighted by a user’s Moon balance, so through this model users who have contributed more to the community and earned more Moons are able to have a larger influence in the direction that the community takes. Moons can also be tipped between users directly in the app or redeemed for premium benefits in r/CryptoCurrency.
What really sets Moons apart from traditional web 2 experiences is that they are on a public blockchain, and once earned they cannot be seized or frozen by the sub moderators or even Reddit. This makes users’ reputation portable and actually usable anywhere on the internet where they are supported. Developers are able to integrate Moons into external sites for any number of uses, and we’re really excited to see how the community builds around them.
Q7: We notice that MOONs is actually a social token launched by members of the Reddit community. Can you introduce the community members who created this project together, and share some of your experiences and thoughts in the process of running the SocialFi community.
John Murphy: MOONs are not actually launched by members of “the Reddit community”, they were designed and implemented by engineers that are employed by Reddit the corporation, and they were launched by Reddit the corporation. They are however stewarded by the moderators of the r/CryptoCurrency subreddit, many of which have been volunteering their time to moderate long before MOONs have existed. We do our best to integrate MOONs into the subreddit, while at the same time not allowing MOON discussion to take over the subreddit, because ultimately it is r/CryptoCurrency and MOONs are a very small part of that world. We have launched a separate subreddit, r/CryptoCurrencyMoons that is solely devoted to the discussion of MOONs and this has helped give people a place to go have more focused discussion about MOONs.
Q8: Last question. At present, new SocialFi products are emerging one after another, and many of them are very homogenized. What plans and vision does Reddit have in the future?
John Murphy: We do not speak for Reddit, but I think Reddit has a unique opportunity to launch these community points in other subreddits and avoid homogenization because they have a very diverse collection of communities on their platform. For instance, they launched on r/CryptoCurrency with MOONs and on r/FortniteBR with BRICKs. The Fortnite subreddit is much less excited overall by the “blockchain” and “finance” aspects of these tokens, and much more cautious about how it will impact the quality of their subreddit, but they have still incorporated the tokens as a governance feature that they use for deciding the direction of their community. Now that MOONs and BRICKs have transitioned to mainnet on Arbitrum Nova, I believe that Reddit will expand these community points to other large subreddits that have very different userbases, and we will see different forms of adoption and use cases arise from those users who have different ideas and experiences than those of r/CryptoCurrency or r/FortniteBR subreddit users.
Andrew：Thank you for the in-depth explanation and professional analysis, and thank you for the support and positive interaction. This concludes today’s MEXC TwitterSpace. Welcome to join our community MEXC English https://t.me/MEXCEnglish and share your thoughts; there are many MEXC events and prizes waiting for you. For those who participate in our gleam task, you can type the password MOON in the gleam to win the prize.
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