The Perception of SocialFi in Crypto

By idiosyncratic | Idiosyncratic Crypto | 20 Oct 2023

Hivefest is a special organization of the Hive ecosystem to learn more about the developments in the projects, exchange ideas regarding the platforms, and strengthen the sense of community, It might be one of the few events that has been held annually as a real Web3 project.

Image from thread

This year, the SocialFi hype in crypto and Hivefest are happening at the same time. I think this is a great opportunity for Web3 enthusiasts as it is quite clear that SocialFi is a real hype that crypto enthusiasts expect. However, when we examine further, the expectations of people regarding SocialFi are rather unrealistic and unsustainable.

SocialFi's Sustainability

The recently created platforms, PostTech, Friend3, TipCoin and others are specifically designed to push people to spend their time and efforts to bring other people rather than create a really valuable and authentic content. You can easily understand the intention from their prerequisites to reward people.

Basically, the attention of people is the fuel of their short term success. However, when they reward people with their new tokens and the token gets dumped, people would not be interest in the project for the chance to get a token that loses value until they can claim it.

Here, people need to be patient and keep hustling with hopium. If the bots drain the reward pool or the reward token drops drastically, the project cannot survive under harsh crypto conditions.

While they still have hype around, they need to apply a strategy that will generate themselves some funds so that they can share the earnings with the community. This can be using real values such as ETH, BNB or other top coins or stablecoins (USDT, USDC) for trades.

Image from thread

Friend Tech is sustaining its success thanks to 3 major factors.

1- There is hype on Base to get 2 airdrops at once (FT and BASE coins) 2- It is the first Social project that is copied by others. 3- The platform uses ETH, not a newly created token

The position of FT is totally different from the others. It shows how to drive the power of hype in crypto by collecting millions of dollars worth of transaction fees.

Reward Points & Monthly Airdrops

The new project sell the narrative that there is an Epoch every month to reward the users according to their work.

Though it sounds fair and pretty good, the rewards will go lower, the bots will manipulate the points system and people will lose their interest in the project as there will be new Alphas where they can find more chances to get bigger portion of the reward pool.

Meanwhile, the narrative of airdrop requires a custom of spending money on worthless profiles. People may lose lots of money in their gamble trades of profiles for the sake of an airdrop expectation. Unfortunately, bots dump on you when you try to trade something.

Priority is Volume and Gamble

This is a pill that is hard to swallow but the concept of SocialFi is matched with a gamble that people buy and sell profiles without any rationale behind.

We saw this before in the ICO era in 2017, meme coin hype in the recent years and now with SocialFi (!) hype that people buy and sell Twitter profiles to farm airdrop.

I do not see any difference between buying ShibaDogeInuBaby coin or social profile trades that people do now. Similar intentions but the same results. While a minority group of people are making decent gains, ordinary crypto enthusiasts lose money in the rat race.

Hive is built differently with a different priority. While Hive projects try to make engagement easier and softer, the social side of Web3 has never been put into second place. Obviously, there is a mismatch between the perception of SocialFi and how a real Web3 project should be.

Witnessing the collapse of many hypes, I can easily say that the gamble side will be replaced with a search for actual SocialFi projects when the bull market comes. Good to see that SocialFi is adopted as a concept and it will have a place when the bull comes. It will the time for Hive to get thousands of new Hivers per day.

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