Zee Prime Capital: What Should Web 3 Social Look Like? How to Achieve Web3 Social?

Original Title: “Beyond Buzzwords: Next Generation Of The Social Internet”

Authors: Cam & Matti, Zeeprime Capital

Compiled by: Guo Qianwen, Chain Catcher

History

Social media has become an important part of most people's lives. It is estimated that people currently spend an average of over 2 hours a day on social networks. Although the growth of this data has leveled off in recent years—perhaps influenced by increasingly negative external factors—social media clearly plays an important role in our lives.

Data 1: Global social media usage data (Statista)

Social media can be traced back to a website called "SixDegrees.com" in 1997. On this site, users could create accounts, connect with others, and send messages. Since then, the web has developed into a more complex and sophisticated environment. In the following years, Friendster and Myspace emerged, some gaining fame while others did not. The networks we know today originated from Facebook and Twitter in the mid-21st century.

These platforms rely on advertising for monetization. They use data to increase the likelihood of ad clicks—optimizing ads with additional user data—and repeat this process. This cycle is an interactive process; the more they understand you, the better they can serve you ads.

The most challenging part is how willing these Web2 platforms are to acquire this data and the inconsistent driving forces behind the competition.

Platforms inherently chase users and do not share data with other platforms. If they can perform better than their competitors and attract users to generate higher click-through rates, they can capture a larger share of two stable resources: your disposable income and time. In the competition for users, we have already seen many negative behaviors on these platforms.

Social media has been criticized for many reasons, including the increasing intensification of social conflicts. We wonder if 15th-century Europe felt the same way. Can you blame Martin Luther's ideas for the religious wars? Could people go back in time to restrict the development of the printing press? Would that prevent people from having any ideas?

Today, many advocate for moderation in social media, which is essentially a euphemism for censorship and political correctness. The interference of third-party platform authorities should not be the ultimate solution. Therefore, we need to balance the anarchic chaos with authoritarianism; we seek progress in technological innovation. After all, fundamentally, "the medium is the message."

The web has changed the structure of human communication, and existing social platforms are merely a proof of concept. We are willing to embrace more extreme technologies as long as they can form tribes from the bottom up, rather than being centrally controlled by top-down algorithms. If algorithms can determine the "official truth," then everyone will strive to seize the algorithm.

Existing social platforms control the narrative, leaving users powerless, almost becoming slaves in the electronic realm. As Chris Dixon said, despite the platforms' great success, their relationship with web users has shifted from positive-sum to zero-sum, from attraction to extraction. Meanwhile, the cost for users to abandon a platform is much higher than the cost for the platform to abandon users—this is a dangerous asymmetry.

Intuitively, we understand that the present is not perfect, but to make changes, we also face collaboration issues. Even if you choose to join a new, better platform, you are ultimately still alone. It only makes sense to switch when others do.

In the past five years, Facebook's free cash flow has grown from $14 billion to $40 billion, doubling. The platform can create value, often because it is highly efficient and provides certain social functions, making it less likely for people to abandon it.

As we mentioned earlier, the current issue is not whether we need these platforms, but how we can enhance experiences at both personal and societal levels. Of course, the former is more feasible, while the latter is much harder to achieve because technology cannot suppress human evil.

We believe the next generation of social media can leverage what is now referred to as Web 3.0 technology. Social interaction will not stop evolving. However, relying solely on idealism to drive the adoption of related technologies is naive. We need a better user experience than what we currently have; we need to invent tools that users in the Web 2.0 space cannot obtain.

What is Web 3 Social?

Breaking it down, we can get "Web3" and "social." We use the popular term Web3 to describe the next generation of applications related to or built on blockchain. The main characteristics of Web3 are decentralization and open-source. However, many applications claiming to be Web3 today lack these features.

We still believe many of these applications are "Web3," but it is more beneficial to understand Web3 as a phenomenon rather than a specific application. Web3 is a choice or a tendency that exists on a very fluid technology stack.

Applications can enhance the Web3 experience, but "Web2 to Web3" is more like a spectrum related to user preferences. This may depend on how data and states are distributed between decentralization and centralization.

The simplest form of Web3 social resembles an optional model. The biggest functional change it brings is that users own their social graphs and data, allowing them to use attractive monetization models.

Users can choose to join established platforms (sharing data with them) and decide the extent of their participation (and sharing). We have already seen examples of this model in use, such as Lens, and other platforms built on it. Brave Browser is an early pioneer of this strategy; from the timeline of Web3, it can be seen as the Netscape of its time.

Perhaps the more interesting aspect is that we can improve the algorithms for social media content delivery. We briefly touched on this point in the middleware theory, but here we will delve deeper.

Existing models optimize engagement (time spent on the platform, click rates, etc.). In future Web3 platforms, flexible content presentation will be possible. In fact, considering the accessibility of data in Web3, we believe content presentation is key to value accumulation. The winners will be those who can provide a good user experience (a better balance).

We can approach this from multiple angles, balancing between private social content (your friend got engaged) and non-social content (like news), profitability (users choose to see more ads), educational value (educational content), and emotional value (more happy content—more "low-quality" nonsensical content).

How to Enter Web3 Social?

Mapping the Network & New Network Packets

Google introduced page ranking algorithms, structuring scattered, unfiltered information, thus achieving great success in Web1. Page ranking reads inbound and outbound links, creating a landscape of web pages. There were other attempts before this, but none achieved such a response.

Each website is ranked based on its importance in the landscape, with importance determined by traffic through the site and the degree of connection to other important nodes in the network.

The background of page ranking is that data cannot be filtered, making the web a reflexive feedback loop. It creates momentum—more popular websites become more famous, and fame further increases a website's popularity. In this reflexive dynamic, high-ranking websites emerge—these are the signposts that guide us in the internet.

If we consider blockchain protocols as the foundation of Web3, then I believe wallet addresses are the new websites, and we should index based on addresses rather than applications.

Web2 is a top-down structure. Websites (applications) anchor information—this is an application-centric process. Applications own users.

Web3 is address-centric. Users embed protocols; they do not require applications or websites to create accounts or online identities for them.

Blockchain eliminates intermediary applications, allowing users to directly embed protocols. Users own addresses, which are essentially accounts without identifiers. Users do not need to rely on services to provide them with identity backgrounds; instead, services entirely depend on users to provide identity, thus creating an initial background from the bottom up.

Blockchain is a machine for state recording. They separate background (state) from services. This is the process through which we create a new network packet.

Addresses and the underlying blockchain that provides state transitions are crucial for these new packets. Although applications still provide UX entry points, they cater to different users. For example, restaurants and customers need to use the city's infrastructure, and applications and users use blockchain addresses in the same way.

These addresses can send transactions, sign information, and create a complex interactive landscape. The existing Web3 landscape focuses more on financial aspects, recording the flow of value between addresses.

How can we ensure the reasonable use of these landscapes? How do we make it "social"?

Horizontal and Vertical Correlation

What we now understand about Web3 is more independent of context: monetary value does not depend on anything—it is horizontally correlated. Financial capital has value without relying on context.

In contrast, social interactions formed by social media depend on context: if likes are detached from context, they become almost meaningless. Therefore, social capital is vertically correlated, non-transferable, and non-generalizable.

Here, context mainly refers to groups within the network. If you maintain a certain status within a community, that status cannot be transferred to another community. For example, you can give people tokens for boring apes, but you might not be able to use them to buy a certain energy drink.

As an opinion leader on a platform, what you are trying to do is convert vertical correlation into horizontal correlation. This is called "monetizing your social network."

The vertical correlation standards in the social domain are reflected in engagement, such as likes, replies, subscriptions, votes, etc. These are the reputation scores of our online identities. Currently, these social standards are almost non-existent in Web3, primarily tied to Web2.

Today, we see some social standard cases from user interactions, notably DegenScore. However, financial transactions are not the only form of interaction that constitutes Web3. We need to incorporate non-financial contexts to add social identifiers to the value network.

Before page ranking emerged, the internet lacked a clear application (website) landscape that could anchor Web2. Web3 is also troubled by this issue. The separation of states helps maintain sovereignty in the electronic realm but hinders the creation of context.

What is context?—the context on the web is composed of network landscapes with indexing properties. This landscape is a mathematical structure that carries information. We add identifiers to nodes within the structure, thereby constructing its framework.

Given that the relationships of Web2 users are hidden beneath the boundaries of applications, we cannot create context in isolation. Everything we receive comes from algorithms that use closed mathematical structures.

Identifiers as a Service

Your Web3 address is anonymous. Its default identity is that of having no identity. This has its pros and cons. The advantage is that you can still remain anonymous. The downside is that, due to the lack of any identifiers, it cannot possess sociality, as it cannot connect with others on a large scale.

The default identity of Web2 accounts comes from applications. To obtain an identity for a Web3 account, we need "identifiers as a service." In other words, we need applications that can provide identifiers for accounts.

As discussed earlier, Web3 lacks a social landscape but has a financial landscape, allowing us to establish financial flows between accounts. Unlike financial capital, social capital cannot be converted, at least not directly. Vitalik refers to this characteristic as soulbound.

One way to assess a person's social capital is to look at how many friends they have. In the online world—it's about how many followers a person has or where they work. Here, centralized institutions provide proof for individuals. Institutions act as reputation third parties, and this proof can indicate personal identity, aiding them in interacting with others.

Generally speaking, identity is non-transferable but also fluid. If you create a LinkedIn profile, you can flexibly manage your career history. You can delete or change it, but you cannot sell it.

Web3 social media is more likely to be an emerging phenomenon. This indicates that it will not be built on social platforms but driven by social identifiers. Non-transferable proof is the identifier. Web2 or Web3 will also become reputation third parties.

Web3 will be very fluid, modular, and relatively dynamic. It is identity-centric. You can carry your identity everywhere. This will promote innovation in downstream applications to cater to users' desires to increase identifiers, which are the driving force of the next generation of social networks.

The benefit of this is that you can transplant Web2 identifiers into Web3. This way, Web2 applications can continue to serve Web3, relinquishing some power. This also indicates that Web2 does not end and then Web3 begins.

Web2 applications can provide services to Web3 accounts as a source of proof. They can monetize local states. Universal state retention is established within accounts, which exist on the blockchain or new modular data layers like Ceramic or Kwil, which are legacy platforms transitioning to more native Web3 monetization models.

Web3 (or Web3's) describes more of an ability to transition from Web2 applications, but this is not the endpoint. Controlling the state means controlling collaborative tools on the network. For example, Twitter's role may change, but it will still be used as an application. Your Twitter account can become a component, enriching identity within the Web3 multichannel.

Blue Checkmark: Seeking Relevance

We are very fond of a white paper released in 2017, from a project called Userfeeds, which was an early failed project. Userfeeds aimed to build a protocol that could "create an open layer, placing integrated relevance algorithms that could consolidate signals from the consensus layer (blockchain) while providing personalized settings."

What does this mean? Let's break it down. Userfeeds defines relevance from a mathematical perspective, calling it "predictability."

"The stronger the correlation of signals, the stronger its predictive ability for other signals. In X, 'compressing' information while being able to predict Y, this process is identifying relevant information about Y within X. After compression, you can use as little information from X as possible to predict Y. The relevant information about people's behavior (x) on the platform (X) can provide insights into others' behavior (y) on the network (Y)."

When people talk about decentralized social landscapes, they forget that we do not need new nodes; we only need to describe boundaries; that is, we only need to define relationships between users. This can be accomplished through verifiable proofs, or what we refer to in this study as: identifiers.

We will have numerous providers offering permissionless blue checkmarks. We will have various identifier providers, some more attractive than others, and some may stand out more in certain groups.

Twitter could transform its business model into a more open network dynamic by providing its proof, though it may not do so. Imagine an NFT badge saying "Vitalik is following me." They could update identifiers to monetize them, as the value of such proof would decrease over time.

Transplanting Web2 identifiers is one way to describe the relationships of wallet addresses. Meanwhile, we have already generated some social proofs on Web3: owning NFTs, holding fungible tokens, being part of a DAO, participating in governance, etc.

All of these can be converted into identifiers without compromising privacy. Pseudonyms are the future of Web3 because "pseudonyms allow for freedom of speech after speaking, resisting disruptions in the social supply chain." (Balaji Srinivasan: "The Pseudonymous Economy").

Today, Web3 refers to the pseudonymous economy in the cloud. In the near future, with the emergence of user-friendly identity management, it will become richer, protecting user privacy, allowing them to collect reputation, manage online identities, and "own their social graphs."

Sismo is one of the projects dedicated to this, a user-friendly Web3 identity management system based on metadata encrypted proofs relying on zero-knowledge proofs. Users can manage a collection of metadata from their ETH addresses and Web2 social profiles through Sismo, selectively displaying information via NFT badges as proofs of participation.

For example, wallet X can prove it is followed by Vitalik on Twitter without revealing who is behind the wallet.

Sismo allows you to aggregate reputation signals into a collection and use specific online personas. People may want one persona for governance discussions and another different persona for other purposes.

We can view Sismo as an identity middleware. It is scalable and gamified; based on proofs like "followed by X+Y" or "holding X amount of token Z," users can extend their thoughts.

We foresee many proof providers like Sismo competing to offer the most reliable and popular identifiers. Some will be adopted, some will not, and some will become popular in the short term (like Instagram or TikTok filters). Choosing identifiers is like selecting personal filters to display on the available social landscape.

In addition, we see similar attempts—ETHdos won at the ETH New York hackathon. It effectively shows the degree of separation between people on Web3 in a zero-knowledge manner—this interesting concept is a new way to explore connections.

Once proof services are adopted, we will need aggregators and algorithm providers. Imagine subscribing to various index providers similar to page ranking, customizing the network experience based on desired personalization. Switching algorithms according to preferences.

This is how relevance will be defined in the next generation of network user experiences. Returning to the importance of presentation, since these proofs exist in a distributed manner, you need an explanatory layer to understand these contents, thereby providing a visible experience.

Another important aspect of improving collaboration is to establish applications that help form consensus.

"Consensus is often crucial for coordination. For example, a group of people may want to express opinions on a certain issue, but they only feel safe doing so when enough people express their opinions simultaneously." (Vitalik)

If we can achieve this, we can not only establish private, permissionless social landscapes but also begin to form open-source knowledge landscapes—a user-centered, dynamic, ever-changing information directory, like Wikipedia, but more fluid and potentially verifiable through encryption.

Conclusion

To recap, we discussed the patterns of past Web2 social media, the potential prospects of Web3 social, and how we can reach the ideal state from the current state of Web3. We understood a world of proof/soulbound/NFTs that provide the necessary vertical context for Web3 social to occur.

To better illustrate how the social aspect of Web3 will differ, we provide a simple illustration.

The social internet of Web2 is built on network effects and slowly transitions into content services similar to news feeds, which will become very redundant in the future. It will not remain static but can transform itself into an optional reputation ledger through verifiable proofs (that is, identifiers). The future of news feeds and content services is cross-platform aggregation.

An important point is that Web3 is not a panacea for the chronic ailments of social platforms—they may stem from deeper issues. Always remember that "the medium is the message."