Buidler DAO: From High City Island to Open World, A Review and Outlook on Web3 Social

Author: av, Buidler DAO

Total 10,309 words, estimated reading time 25 minutes

Article Overview:

01/ The Logic of Web3 Social

02/ Current Practices and Explorations

02 01/ Public Chain Layer

02 02/ Storage Layer

02 03/ Protocol Layer

02 04/ Application Layer

03/ Summary and Outlook

The Logic of Web3 Social

Social networking is undoubtedly one of the core and most important businesses of the Web 2.0 era. Social applications not only have a massive user base, but the value they generate is also self-evident. Driven by large capital, they acquire more and more user data through social applications, generating hundreds of billions to trillions of dollars in revenue each year by providing personalized advertising recommendations, content recommendations, and services. However, Web 2.0 social networking has several issues:

1. Data Sovereignty and Data Islands

Users do not have complete control over their own data; the data generated by users is controlled by the platform, and the information flow recommendations are determined by the platform's algorithms. Additionally, once users establish their social relationships on one platform, the cost of switching to another platform is very high.

2. Closed Ecosystems

Major Web 2 platforms benefited from a vibrant developer ecosystem in their early days, but once they gained enough traction, they closed off the ecosystem to prevent others from stealing their data and users. A long time ago, Twitter's developer API was shut down due to concerns about data sharing, which is an example.

3. Unreasonable and Opaque Benefit Distribution

On many social media platforms, content creators cannot receive the income they deserve or the income is too low, leading to a lack of incentives for content creators and limited rights. If the platform itself does not have absolute technical barriers or moats, creators are unwilling to stay on the platform, leading to a decline in the platform.

At the same time, due to the lack of a transparent benefit distribution mechanism, once the usage rate of the platform's users and creators reaches a strong network effect, benefits often tilt toward the platform side, making network participants the victims of the platform's growth. Users are the main group of content creators on social media, but the value they create is not rewarded. The platform profits from user-generated content by controlling distribution algorithms and attention flows, without sharing with users.

The emergence of Web3 breaks the monopoly of platforms and establishes a new global digital economy model, providing a foundation for SocialFi. In the era of Web3, everyone should have control over their digital identity, assets, and data. Compared to Web2, the core of Web3 social networking is to provide three major changes:

1. User Data Sovereignty: Data ownership is a key feature that distinguishes Web3 from Web2; data ownership no longer belongs to the platform.

2. Open Data and Identity: The beauty of blockchain technology lies in its openness and transparency, allowing data and credentials accumulated on-chain to be shared throughout the ecosystem. We are no longer trapped in the data islands of the traditional Web2 world but are in an open, shareable, and composable data world. Additionally, for users, a unified identity and data eliminate the so-called migration costs; the reputation and credentials accumulated by user entities on-chain are openly shared throughout the ecosystem.

3. Composable Ecosystem: The modular, fat protocol, and pluggable design of this open digital world determines its composability. Whether it is the computing layer, data layer, protocol layer, or even the Dapp layer, it allows developers to combine in a permissionless manner.

We have already seen the exploration and innovation of decentralized technology in DeFi, and people are also trying to initiate a social revolution through blockchain technology in Web3. Although we are still some distance from the rise of Web3 social networking, we find that more and more teams are investing in the early exploration of Web3 social.

Like Web2 platforms, the construction of the open Web3 ecosystem includes three parts: the infrastructure layer (public chains, decentralized storage), protocol layer, and application layer, of course, also including the ecological tool construction derived from each layer. We see many projects in the Web3 social field this year named with -Network, -Protocol, similar to the various Zk-xxx projects that emerged after zero-knowledge proofs became popular, as builders successively invest in the infrastructure of Web3 social, striving to improve the entire social stack.

Let’s discuss the current state and development of Web3 social this year from these three aspects, along with the author’s thoughts.

Current Practices and Explorations

Public Chain Layer

Deso

Deso, short for Decentralized Social, is an L1 blockchain specifically designed for social media applications. Through a customized POS consensus mechanism, it can achieve over 1,000 TPS (transactions per second) and accommodate up to about 30 million users. At the same time, with built-in NFT and social tokens functionality, users can easily create token-based communities and monetize them.

Compared to a general L1 that only stores account balances with "limited state," it is designed as a "unlimited state" blockchain with a massive storage capacity, allowing Deso to cheaply store all information from social networks on-chain.

As of December 2022, there are 2 million wallets and over 200 Dapps running on Deso, with the most active being the Twitter-like application Diamond.

Currently, there are only about 5,000 active wallets on Deso daily, and the entire ecosystem lacks any real social relationship accumulation. It is likely that most users are pursuing mining. There are many Dapps, but very few users, making it difficult to form the crucial network effects of social networks.

CrossBell

CrossBell is a product developed by the Natural Selection Labs team to solve user data ownership issues; it is an EVM-compatible Ethereum sidechain. Compared to Deso, it takes a different approach, focusing on providing a shared content storage platform aimed at changing the way social platforms control and capitalize on data. All user actions on CrossBell are stored in an assetized manner in "accounts," emphasizing the ownership of user social activity data, as stated on the official website, "own your social activities!"

SubSocial

Subsocial is a protocol and parachain built on the Kusama blockchain based on the Substrate framework, using the IPFS protocol for decentralized file storage. Applications on this platform will have integrated token methods while users retain ownership of their content and data.

As the founder and CEO Alexander Siman commented, "We refer to Subsocial as Polkadot's 'Social Finance (SoFi)' protocol. This means users can create their own communities based on Polkadot and IPFS, with built-in content and community monetization features."

Whether it is Deso, specifically designed for social media applications, or CrossBell and SubSocial, which emphasize social data ownership, they are all based on considerations of performance requirements for social applications. Without discussing the correctness of building a new social public chain, we need to consider that while the construction of an L1 public chain can achieve fast transactions and low-cost storage, in the context of Web3 social applications still being underdeveloped at the beginning of the year, it addresses the problems we will face after the successful validation of Web3 social (how to support a Web3 social network with hundreds of millions of users?) rather than solving the social needs of Web3 residents. On the other hand, the launch and application of a specific domain L1 public chain itself come with user acceptance costs and ecological migration costs. At the same time, we also see the merge of ETH2.0, the rise of L2 public chains, discussions on modular blockchains, and Starknet's exploration in dedicated L3. I believe the performance needs of Web social will always find outlets in these areas.

Therefore, rather than starting with a public chain specifically designed for social networking, perhaps it is more appropriate to prioritize practical solutions for native social needs based on existing public chains like Polygon?

Storage Layer

Ipfs and Arweave have a profound impact in the field of decentralized storage, along with Stoj, Sia, and Swarm. However, they are more focused on scenarios involving cold, immutable data, such as NFTFi, and are not specifically designed for SocialFi. Therefore, they do not consider the real-time variability and data query needs of social data, nor are they suitable for distributing large data streams; they are more like traditional file storage systems similar to Ceph. For decentralized social, variable and composable hot data scenarios, we need infrastructure that resembles our traditional MySQL.

Ceramic

Ceramic Network is a decentralized data network that provides computation, state transitions, and consensus for all types of data structures stored on a decentralized network, aiming to build a dynamic file storage system on-chain. Ceramic uses data stream objects to track dynamic document changes through immutable streamIDs, enabling automated version control. Ceramic also offers very convenient DID-like identity verification and access control, which is effective for cross-chain data sharing.

At the same time, Ceramic is based on IPNS, managing state transitions and tracking state transition functions by providing an IPFS data layer, associating this data with data structures, and storing it for users, making it easier for developers to build decentralized data. Although there are still issues such as developers needing to self-host nodes and the lack of a complete economic model, it remains a core leader in the modular data market.

Many DID and Web3.0 social platform projects are currently being developed on Ceramic. Notable examples include the Social Graph Middleware platform CyberConnect, Web3.0 Twitter's Orbis, and the instant messaging platform The Convo Space.

We know that in the social field, the vast majority of data is hot data, such as user identity information (profiles, social graphs, reputations, etc.) or user-generated content (posts, blog articles, etc.), which are dynamically changing. While we can store some core data directly on-chain, most data needs to be effectively stored and managed by dynamic data networks like Ceramic.

The emergence of Ceramic greatly empowers the construction of Web3. In addition to Ceramic, there are also TableLand, a decentralized structured relational data protocol, ongoing explorations of FVM by IPFS, and data indexing and availability solutions like TheGraph, Covalent, and Dune. Their emergence has significantly empowered the construction of Web 3.0. Storage middleware is crucial for traditional platforms, and it is the same in Web3. The storage track in blockchain technology still has a long way to go, and we look forward to more infrastructures like Ceramic bringing new possibilities to the Web3 application layer.

On the other hand, for the storage layer, costs and strategies for data on-chain will also become a technical moat for this track. As crypto users become more sensitive to public data, privacy will also become another issue that needs to be addressed in the storage field.

Protocol Layer

Functional abstraction is common in Web2, such as relationship chain services, account services, feed flow services, notification services, IM systems, etc. These are essential modules for social platforms, while in the Web3 social ecosystem, they exist in the form of protocols (including identity protocols, social protocols, communication protocols, etc.). This differs from traditional island stacks; it is a completely new and open form, somewhat like the XaaS (general functional service provision) model that has always been envisioned but not well implemented. Only by establishing standard, effective, and composable open protocols and building a solid protocol layer can we construct a richer social stack and larger social Lego. At the same time, Dapp project teams should shift their focus to the application layer, which is more conducive to innovative attempts.

Social Protocols & Graphs

CyberConnect

CyberConnect is the first decentralized social graph protocol serving Web3 and the metaverse. Its mission is to return the ownership and utility of social graph data to users while providing infrastructure for all Web3 developers. CyberConnect is currently built on Ethereum and Solana, primarily using IPFS and Ceramic for social graph storage. The CyberConnect Gateway provides a universal data layer for Dapps, allowing them to insert social elements for their Dapp users.

The CyberConnect protocol has evolved from version V1 to V2, transforming it from merely a social graph into a social data network and interest graph engine. By integrating data from all off-chain, on-chain, and decentralized storage protocols, it builds unique social relationship networks for users, allowing Web3 developers to focus on providing better services and content without worrying about building user networks.

Lens Protocol

Lens Protocol is a decentralized social media protocol built on Polygon by Stani Kulechov, the founder of DeFi giant Aave. Lens fully utilizes the ERC-721 non-fungible token standard to create a truly decentralized ecosystem. The social graph on Lens is built around personal homepage NFTs, so establishing social relationships starts from scratch, making it more challenging. Nevertheless, I believe Lens Protocol completely disrupts the existing social graph design system; it is a scalable social architecture built around NFTs. Personal homepages, following users, and collections will serve as the main carriers of information and value, all recorded in NFT form in wallets. Creators can set time or monetary thresholds to capture the value of user attention and collections. The openness, refinement, and assetization of social data records are the essence of the social protocol's value.

The contract code of Lens Protocol has many aspects worth learning from in terms of Hub, NFT design, and customizable scalability. Currently, dozens of Dapps have been built on this protocol.

Relation

Unlike CyberConnect, which uses Ceramic data services, Relation, a multi-chain social protocol developed on Dfinity, has independently written a database called Relation Graph and completed the indexing and construction of Web3.0 social graph data through its independently developed product Relation One. Relation includes not only the visualized graph data of Relation Graph and the user homepage of Relation One but also Relation Club & Relation Link chat tools. In the future, Relation will also provide more advanced data services.

5Degrees

5Degrees is a Web3 social network protocol incubated by TokenPocket, aimed at establishing user relationship graphs and socializing all Dapps. It is an open-source protocol built on the ERC-1155 standard. Compared to Lens, which supports posting, collecting, commenting, and other social interactions, 5Degrees only supports Profile and on-chain social relationships. As a result, it has far less influence in the Web3 social protocol space compared to Lens and CyberConnect, which I believe may be due to unclear protocol positioning and insufficient implementation.

Communication Protocols

XMTP

XMTP (Extensible Message Transport Protocol) is an open protocol, network, and standard for secure, private Web3 messaging. XMTP is built on the Waku v2 version of the peer-to-peer messaging protocol, facilitating messaging through XMTP nodes (currently all nodes hosted by XMTP Labs). It enables end-to-end encrypted communication between Web3 entities (wallet accounts to wallet accounts, Dapps to wallet accounts, creators to communities). Notably, in November of this year, XMTP provided secure and private direct messaging services between profiles for the entire Lens ecosystem, currently allowing users to send private messages to each other in Lenster.

Push Protocol

Push Protocol (formerly EPNS Ethereum Push Notification Service) is a Web3 messaging push protocol based on addresses, similar to Apple's Push Notification Service (APNS) in Web2. It aims to create a user-controlled, crypto-native messaging subscription and push mechanism. It was officially renamed Push Protocol in September to avoid being tied to ETH and to build a cross-chain ecosystem. It offers three notification modes: broadcast, directed, and subset, allowing users to send different types of notifications to channel subscribers. It also provides standard plugins and SDKs, making it easy for any Dapp or service to subscribe to and receive messages.

Others

Web3 Domain System

We have observed a phenomenon: since ENS came into the public eye due to the digital domain speculation at the beginning of the year, this year has been a flourishing year for Web3 domain systems. From ".eth" to ".bnb," ".nft," ".apt," etc., it has sparked a wave of domain NFT speculation. However, as the ecosystem integrates ENS, people are beginning to realize the importance and significance of this readable alias system. Users no longer need to remember cumbersome address strings; they can simply use a name with characteristic significance similar to Web2 for transfers and even richer on-chain interactions. This is undoubtedly a significant advancement in linking wallet addresses with natural persons.

RSS3 Content Distribution Protocol

RSS (Really Simple Syndication) is a content aggregation protocol from the Web 1.0 era that established a format and standard for web aggregation, serving as a network transmission protocol. Early developers created the RSS protocol to track website information and scrape content, allowing information to be stored in a structured manner in RSS files while enabling content distribution.

RSS3 integrates blockchain technology with the RSS protocol, aiming to change the way social platforms control and capitalize on data, building a transparent, open, and scalable decentralized information distribution protocol that returns content ownership to users.

When users use Dapps, the front end aggregates requests for information flow, which are processed by a global indexer (GI) composed of relay nodes (RNs) in the entire RSS3 network. Service nodes (SNs) then distribute the stored content back to users. Information transfer between nodes is done through RPC, while information transfer between nodes and users is done through REST API/GraphQL.

The technological iteration of blockchain is rapid, and we see many innovations and explorations in Web3 social protocols. In addition to those listed above, there are identity protocols like IDX Protocol based on the Web3 infrastructure Ceramic, privacy-related proof protocols like Sismo Protocol that use ZK technology for decentralized identity verification, and access control and encryption solutions like Lit Protocol. They all play key roles in the construction of social networks.

Application Layer

The previous sections have summarized the progress in the protocol layer of Web3 social, while the application layer built on these protocols is vast. Some applications raise the banner of user autonomy but mostly turn out to be hype rather than truly embodying the spirit of Web3 to innovate in a crypto-native way. However, there are always some Web3 applications that feel novel or have a high degree of fit with the market. Below, I will discuss relevant projects in the Web3 social application layer around social relationships, social identities, and content creation.

Media

The dramatic events surrounding Twitter over the past year have prompted a massive influx of users to Twitter alternatives. Among them are fully decentralized options like Mastodon and Farcaster, as well as the completely decentralized Lens Protocol mentioned earlier. Although all three are protocols or social network architectures, I prefer to compare and introduce them at the application layer.

First, Lens Protocol, which is a fully decentralized and scalable social protocol built around NFTs. The emergence of Lens is exciting because prior to this, people were cautious about whether social protocols should be completely decentralized. Whether it’s Mastodon, Farcaster, or Blusky, they all chose to implement a sufficiently decentralized social network rather than a fully decentralized one. Building social media applications based on the Lens Protocol is particularly simple and direct. We see that there are dozens of Dapps built on Lens, with the most representative being "decentralized Twitter" Lenster, "decentralized YouTube" Lenstube, and "decentralized LinkedIn" Orb. As of December 2022, Lens had nearly 100,000 total users, with about 35,000 monthly active users.

Since June, the total number of relay transactions processed through Lens's gasless API has reached 7.9 million. Since not all Lens applications use this API, the actual number of Lens transactions is even higher.

Then there’s Farcaster, which is a permissionless protocol where data and APIs are proprietary. This means any developer can query data from Farcaster and build different customized applications on the Farcaster data layer, similar to how Gmail, Apple Mail, or Outlook are built based on the SMTP email protocol.

For a protocol trying to become "fully decentralized," storing every post, share, and collection on-chain is expensive. Perhaps what we need on-chain are just the most basic primitives, such as a person's identity and the ability to read and write data. The main difference between Farcaster and Lens lies in its minimalist approach to on-chain data storage, as stated by its former Coinbase founders Dan Romero and Varun Srinivasan, "sufficient decentralization." At the same time, Farcaster discards the typical financial incentive layers in today's Web3, where node validators receive token rewards for completing tasks.

Instead, a peer-to-peer Hub network constitutes Farcaster's data layer, similar to Ethereum nodes, which store data, validate operations, and propagate data to peer nodes. As of December 2022, Farcaster had 6,700 users, with an average of 3,500 monthly active users.

Next is Mastodon, which is an old-school social network that is the closest alternative to Twitter. It is based on the open-source ActivityPub protocol, allowing anyone to build third-party applications on the open-source Mastodon protocol. The architecture of Mastodon is most similar to the federated model of Farcaster, belonging to "sufficient decentralization." In Farcaster, thousands of privately operated and crowd-funded servers are called "instances," which choose to communicate with other instances (or not) or remain completely private. Users must choose which instance to join, similar to Discord or Reddit.

Since Mastodon's instances make subjective decisions about the content visible to another instance, the user experience on Mastodon is often fragmented rather than a public hall like traditional social media platforms. The difference between Mastodon and Farcaster is that the latter hosts user identities on immutable smart contracts on Ethereum, while Mastodon's user accounts can be unilaterally reviewed or banned by any instance operator. As of November 2022, Mastodon had 1.02 million monthly active users.

Identity

Identity is constructed from the relevant data of entities, and similarly, in Web3 social, decentralized identity is built from decentralized identifiers combined with on-chain and off-chain data. At the same time, reputation and credentials around identity in social relationships become particularly important, such as identity entity identifiers based on social relationships like BrightID, credit ratings in decentralized credit markets like ARCx Credit, and credential platforms like Galaxy, POAP, and RabbitHole.

In May of this year, Vitalik Buterin's paper "Decentralized Society: Finding Web3's Soul" popularized the term SBT (Soulbound Token), which is particularly significant for Web3 social. I believe that future decentralized social networks will also use SBT for identity minting, association matching, and connection.

Similarly, for privacy, zk-SBT will also be more widely adopted. On the other hand, smart wallet applications have undergone significant changes this year, from the initial Gnosis Safe to Argent, Sequence, Unipaas, etc. The proposal of EIP4337 account abstraction has also accelerated this process. I believe that in the future, the authentication, authorization, management, privacy, reputation, and cross-chain identity stacks around identity will become increasingly mature in functionality and experience, accelerating the development of Web3 social.

Connection

The connections of Web3 entities go beyond user-to-user peer-to-peer social connections; there are also community connections. Users connect through some medium, token, or other characteristics to form communities, and the rise of DAOs is undoubtedly a catalyst for this demand.

We are fortunate to see applications like SEER-Space that assist in community building and communication, as well as community management tools like DeBox based on blockchain DID, which do not rely on project parties to create group connections but depend on specific NFTs to connect DAO governance frameworks. Similar to DeBox, the NFT-based group social platform Atem connects users through NFTs, exploring NFT-based social networks and enriching the relationship expressions between NFT assets and holders. Notably, the recently launched Link3 by CyberConnect effectively links social identity with on-chain behavior, aggregating on-chain and off-chain data as a whole identity, achieving trustworthy networks and meaningful connections between users and organizations.

In addition, we also see the rise of some emerging projects in the industry, such as Nextme, a social project incubated by BuidlerDAO, which aims to connect and distribute social data and profile value through decentralized protocols. They all share a common feature: building a connection system based on Web3 identity entities, thereby mining value through data distribution and entity interaction.

Content

Last year, there was a heated discussion about content mining and the creator economy, followed by a large number of content creation-related Dapps that raised the Web3 banner but essentially issued platform tokens with only short-term value. I vaguely remember that when Monaco Planet was launched at the end of last year, there were many discussions about its breakout, but due to the unclear definition of content mining and token distribution issues, it quickly faded from discussions.

However, in the field of content publishing, Mirror is one of the few platforms recognized by many. Mirror is backed by the well-known crypto venture capital firm a16z and is currently the most widely known Web3 social product with the most active users. The overall functionality of Mirror is relatively simple; it does not have comments and cannot form a feed flow through subscriptions, but this does not prevent it from becoming the main outlet for content creation by Web3 practitioners.

Communication

We see that many Dapps, after reaching a certain stage of development, will introduce instant messaging capabilities, as this is an essential part of connecting people. We have previously introduced related communication protocols, and at the application layer, whether based on standard protocols or self-developed protocols, there are many practical examples.

There is BlockscanChat, created by the team behind Etherscan, which allows users to leave messages between wallets; Wallet Connect Chat, which allows users to send direct messages to other wallet users in the WalletConnect network; DeBank Hi, a Web3 native communication application launched by the one-stop DeFi wallet DeBank; Nansen Connect, which promotes more effective cryptocurrency-related conversations using data and tags generated by Nansen; and the chat capabilities between profiles in Lenster based on the XMTP protocol.

Tokens

SocialFi = social + token + economic model, where tokens not only serve as the link connecting Web3 entities but also anchor the assets or value of Web3 applications. Tokens in Web3 are mainly divided into personal tokens, community tokens, and social tokens.

Personal tokens are also known as fan tokens, such as the fan token RAC launched by Grammy Award winner DJRAC (André Allen Anjos) based on Ethereum, and the token Whale issued by well-known NFT collector WhaleShark on the ROLL platform. Community tokens are mainly used for community management, fragmenting community assets into their own community tokens in some way. The most representative example is PleasrDAO, which bought the NFT of the Dogecoin meme and fragmented it into 1.69 billion The Doge NFT (DOG) tokens. On the other hand, community tokens also play a role in points governance within DAOs. Social tokens are generally platform tokens launched by social platforms, such as the native token Chilliz of Socios, a blockchain-based sports entertainment fan incentive platform.

Summary and Outlook

Web3 social is a broad topic. Transitioning from the high-walled islands of traditional platforms to a fully open and composable ecosystem may still take some time. Through the review of the current state of Web3 social development in 2022, we may have the following insights or reflections.

Should public chains lead or protocols? I was puzzled when I first saw the proposal of an L1 public chain like Deso because I believe we should first address the needs and solve the problems of Web3 social innovation, rather than tackling the issues we will face after the success of Web3 social (how to support a Web3 social network with hundreds of millions of users?).

Building an L1 chain inevitably requires constructing an ecosystem from scratch. Not to mention migration costs, it may lose its intrinsic connection with already successful public chains. Developing Web3 social in such an environment is undoubtedly challenging. The user base of Web3 is already small, and it is difficult to form network effects when it is divided among hundreds of Dapps. In contrast, the lens-protocol and the work done by the Aave team show that from June to now, the API calls of lens-protocol account for 4% of Polygon, and the social protocol is feeding back into the application layer, with the social+fi ecosystem that the Aave team is trying to build seemingly beginning to take shape.

"Fat protocols" and protocol-first approaches may be more suitable at this stage. Because there is liquidity, there are users; with users, network effects can form, thus generating value.

The user base of Web3 is still very small. SocialFi still has a long way to go for development; its track scale is small, and the mechanisms are relatively primitive. Very few users are willing to use products with poor experiences in SocialFi. This makes it difficult to form economic effects. When the project tokens of SocialFi have weak empowerment and start with content mining, the consequence is that users begin to create garbage content without limits, falling into a death spiral of mining and selling. On the other hand, we look forward to more bridges like Mask Network to guide more Web2 users into the Web3 world.

Compared to simple copies of social applications, we expect more native crypto innovations. From the end of last year to this year, we have seen many so-called Web3 applications that are merely Web2 copies + tokens. After various hype and product launches, very few remain. Web3 social must have unique crypto-native innovative genes; otherwise, users have no reason to migrate from Web2 to Web3.

Fat protocols with thin applications or fat protocols with fat applications? We see the development and innovation in the protocol layer this year and many thin applications built on protocols. The various independent and simple functions of applications on top of protocols together construct the entire ecosystem. However, we will consider whether a single application increases the cost for users to switch Dapps and what the moat of the application itself is. How high are the technical barriers? People are always driven by profit, and I believe that ultimately, a few equally powerful super applications (so-called fat applications) will emerge, rather than the current small and beautiful applications.

The financial aspect of Fi in SocialFi does not yet have a good social network effect to support it; we are still in the very early stages of Web3 social, and doing social well is more important.

Because early on, people's understanding of the DeFi concept was not deep, the value potential of SocialFi has not been fully explored. However, with the continuous development of DeFi and blockchain technology, more and more market hotspots will be discovered, and users in the crypto industry will gain a clearer and deeper understanding of Web 3.0 and decentralization concepts. Due to the current upgrade of the technical environment, we can view the development direction of SocialFi from a richer perspective, and we can even construct more imaginative protocols.

The identity system still cannot closely associate on-chain data generated by Web3 entities with natural person identities like phone numbers or emails in Web2. However, we see the development of smart wallets, DIDs, SBTs, and EIP4337. Only by prioritizing identity can we better guide users from Web2 to Web3 and facilitate decentralized social networking.

The current Web3 social Dapps urgently need to address experience issues, whether it is optimizing relationship graph indexing, improving end-to-end content encryption efficiency and message sending/receiving efficiency, or ensuring on-chain data availability. At the same time, many nodes in the protocol architecture are either very few or all hosted by the official, and this status quo must change.

However, this also relies on the construction of infrastructure. With the rise of decentralized dynamic storage, programmable storage public chains, modular blockchains, or L2 and L3, the experience of future SocialFi products will improve. I believe that future SocialFi products will allow people to forget that they are actually built on blockchain technology.

Data privacy is another issue we need to address. The beauty of blockchain lies in its openness and transparency, but as the blockchain ecosystem gradually needs to align with natural person identities, this mechanism of public data sharing can sometimes be unsettling. When solving data sharing, we must also protect user privacy. We see that this year is the year of ZK and L2, and I believe that with the continuous iteration and exploration of ZK technology, it can be effectively applied to various scenarios in Web3 social to achieve verifiable data.

The final thought: complete decentralization or sufficient decentralization? We see that Lens Protocol, Farcaster, Mastodon, and Blusky are all explorers of different degrees of decentralization for social protocols and social networks. However, I currently have no conclusion on this issue, and I believe it will become clearer over time. The founder of Blusky, who is also the former Twitter founder Jack Dorsey, has been outspoken in criticizing Web3, claiming that it is essentially a venture-capital-funded scam. But it is not that simple.

Instead, he proposed the concept of Web5, which differs from what people currently refer to as Web3 because it does not emphasize ownership of the internet like Web3 does. However, the similarities between the two lie in their interest in decentralization and permissionlessness. Balaji Srinivasan, the former CTO of Coinbase, devotes a chapter in his new book "The Network State" to describing what he calls the "decentralization to recentralization" process. He believes that decentralization benefits rebels, while centralization benefits those in power.

Decentralization increases volatility, while centralization provides stability. Throughout history, decentralization movements, such as the American Revolution and other revolutions worldwide, ultimately led to centralized states. Therefore, the decentralization advocated by Web3 will eventually lead to centralization.

I believe this layer of fog will slowly be lifted, revealing a brand new open world!