A Brief Analysis of Several Cases of Tokenized Social Networks: BitClout, CyberConnect, and MonacoPlanet
What they are building and how they are achieving network effects.Author: IOSG Ventures
After the NFT craze that allowed digital artists to earn a fortune, what’s next? We believe it is the tokenization of social networks, which includes audio, video, information streams, personal media, publications, and more. The market has historically under-served digital artists, and NFTs have powerfully demonstrated that digital jpegs on the blockchain provide an easier way to profit due to their inherent ledger properties.
The theory and discussion around decentralized social networks have existed for a long time. During Donald Trump's presidency, Twitter banned his account, making the demand for decentralized and censorship-resistant social networks very evident in the Western world. To create network effects similar to Facebook in 2004, Web3 native social network platforms like BitClout, CyberConnect, and MonacoPlanet have raised millions of dollars from investors.
Let’s take a look at what these projects are building and how they achieve network effects.
Cyber Connect
CyberConnect focuses on providing a standard data layer for dApps, user identities, and user relationships. This is accomplished through API calls: using GraphQL for read paths and JavaScript for write paths, users can access and use their DIDs (decentralized identities) and social graphs by signing in with Metamask. All relationship data of DIDs and usage data of dApps will be stored on IPFS via Ceramic Network.
Since you can universally store and retrieve data in your dApp/social application, dApps integrated with Cyber Connect essentially function like a one-click OAuth process in the Web3 world (Note: OAuth is an authorization standard under web2 that allows third-party applications or clients limited access to user account information on HTTP services).
So, who is their target audience? This is an infrastructure application, so their target customers are dApp developers, while the users are dApp/wallet users.
Monaco Planet
(1) Web3 Narrative & Gamification
Monaco's attempt at social networking is quite interesting. They have created a future world set in 2150 through their NFT series and social platform in a gamified Web3 manner. The platform is currently in private testing, available only to YachtClubNFT holders (NFT airdrop) and referred users. Others can visit the platform as guests but cannot participate.
How are they approaching building social media? The team's initial approach was to attract crypto ordinary users through their YachtClubNFT airdrop (which includes early access to the platform and future $MONA airdrops). Monaco mimics Clubhouse's rules, limiting each person to 5 referral slots—this makes access to the platform a symbol of identity, and their YachtClubNFT has also become a commodity.
(2) Narrative and Token Economics
This social media platform features a "write-to-earn" or "content mining" token economics, aiming to ensure that the right content is discovered rather than through paid promotions or algorithmic bias. Active content creators will receive MONA tokens monthly, distributed over two years.
Traditionally, advertising revenue has been the primary profit model for social media platforms, and this model often works well due to the strong demand for targeted advertising. This model is difficult to replicate in Web3 because it infringes on a lot of privacy, but that doesn’t mean Web3 native platforms have given up all their advertising revenue. In Monaco, once the platform's usage reaches a threshold, advertisers can purchase and burn MONA tokens to promote posts, broadcasts, and insert streaming ads. This revenue channel brings in $4 billion annually for Twitter and $100 billion for Facebook. Additionally, MONA will introduce a triggering mechanism recently adopted by Twitter.
(3) Platform
The platform's personal interface and discovery page look similar to existing social media platforms, especially Twitter (as shown below). The native features of Web3.0 mainly include:
One-click login using your digital crypto wallet, such as Metamask, instead of registering with an email. (Imagine CyberConnect infrastructure being used to implement this authentication across multiple social platforms)
The profile interface embeds an NFT section where users and creators can showcase their NFT portfolios.
The right panel displays NFT net worth and Influence rankings, showcasing the most influential investors.
The platform is not yet open to the public, so many details remain unclear: for example, how the rankings are indexed, how to add multiple wallet addresses in profiles, private and public forums, etc. The project will open to the public after December 31, at which point these questions may be answered.
BitClout (now DeSo Network)
BitClout is the first experiment in this category within the social network space. Their platform is similar to Twitter or Monaco, but each user profile has a personal token associated with it that can be traded on the market. Meanwhile, each personal token has a joint curve to incentivize popular users.
(1) GTM and New User Acquisition
There are two strategies for acquiring BitClout platform tokens: one is that users can purchase them for a certain amount of Bitcoin, and the other is that the platform pre-sets profiles of top Twitter users for them to claim. However, both GTM strategies raised red flags for the public, as people perceived paying with Bitcoin to access their personal tokens as a "scam," and pre-inserting public figures' profiles as an invasion of privacy.
Since then, they have slightly adjusted their strategy. Now, users must purchase $0.10 worth of DESO to create their profiles. Users can buy $DESO in exchange for Bitcoin or through fiat payment channels. Alternatively, if a user verifies his/her phone number and/or email, they can receive up to $4 worth of DESO tokens for social activities.
(2) Platform
BitClout has its own format—the "Explore/Discover" section looks similar to existing social platforms. Users can see the token prices of other users on the explore page. On a post, other users can see how much in "diamonds" each post has received in tips. Similar to other social network platforms, BitClout will also have an NFT showcase/gallery, but this feature has not yet been launched.
BitClout has an interesting feature typically found in trading platforms, which is the financial trend chart. It showcases "Daily Top Earners," "Daily Top Diamond Creators," and "Top Community Projects," supported by its analytical tool: deso pulse.
(3) Token Economics
DeSo/BitClout seems to have a complex token economy. The value of DESO tokens is generated from activities like creating new profiles, but this revenue stream has a boundary condition: the value of DESO tokens comes from running nodes, meaning operators can charge transaction fees on creators' coins, promoted content, etc.
Social Token Integration Use Cases for Social Platforms
A great use case for these social platforms is adopting a social token-first approach, which can guide early communities for new cryptocurrency projects, allowing them to airdrop their social/community tokens to early investors. Given that these tokens have consensus-based value alongside governance tokens, this could also be an interesting way for future DAOs and community building.
