Temasek Web3 Fund Superscrypt: What Valuable Changes Exist in Web3 Social?

Original Title: Web3 Social: Driving New Forms of Identity, Connection & Value Creation
Original Authors: Supercrypto and the USC Blockchain Community
Translated by: Qianwen, ChainCatcher

Superscrypt's mission is to support founders and projects that can bring the next wave of users to the blockchain space. We take a research-driven approach to identify the key Web3 components that will drive how we interact, create, and share value globally. Today, we join Web3 social by sharing our insights with the world through blogs published on Mirror and Link3.

How to Explore Web3 Social?

The use of decentralized blockchain technology is changing the way the world operates. While the most popular use cases for blockchain are financialization (tokens, DeFi, and NFTs), the technology-driven social networks will support the development of new forms of identity, data ownership, and communication capabilities. In this article, we will explore the core value propositions of Web3 social, how various protocols and platforms operate, the current product-market fit, and its potential to become the future of online interaction, community building, friendship, and trading for users.

To understand the viability of Web3 social, the best approach is to first understand how past waves of innovation have formed and assess whether Web3 social exhibits similar characteristics. Waves of innovation emerge at the intersection of technological innovation and new consumer/business values; they change the way our world operates, and in hindsight, these impacts are often obvious. Just like in the real world, after a tsunami, there are often several giant waves that follow. Silicon chips and the internet are the tsunami, while personal computing, e-commerce, digital financial services, and Web2 social platforms are the waves that follow. In the Web3 space, blockchain is the new tsunami, followed by waves such as decentralized finance, dapps, and NFTs. Will Web3 social platforms become the next wave? Can they provide more added value than previous revolutions?

Data Openness and Portability

The social media applications we use today leverage complex underlying data networks to enhance our experience, known as "social graphs"; interconnected data structures map our digital relationships and interactions, the people we follow and subscribe to, the content we like, and so on. In Web 2.0, social graphs are proprietary systems, with all assets, data, and behavioral analytics owned or controlled by internet companies. Users lack true ownership or control over this data, leading to social graphs being "isolated" and cut off from other platforms; our identities and experiences are unlikely to connect across platforms forever. To use a new platform, users must rebuild past social relationships and histories, which creates significant user experience friction, causing users to remain locked into a single platform. If end users want to switch from one application to another, they must start from scratch.

How is Web3 social different? First, it aims to establish a foundational layer where users' social graph data is transparent, permissionless, portable, and most importantly, users can control this data. We call this model "open data."

Open data allows users to easily use new applications based on the same social graph without dealing with redundancy issues. Anyone using a Web3 social platform can use their data for any application they desire. Imagine if Joe Rogan (an American comedian) decides to move away from Spotify; currently, he and other creators have limited access to their fans, subscribers, and content, and in some ways, he must start over on another platform. Given Joe Rogan's prominence, this should not be a problem, but for 99% of artists, it means significant difficulties.

Isolated data hinders independent developers from leveraging these social graphs to create new experiences and applications for users. As a result, innovation in the social application space faces a significant cold start problem. New social applications are often developed but frequently fail due to a lack of attention. In the world of Web3 social, if users can take their data and friends with them, they may be more willing to try new social experiences. A novel example of a Web3 social experience is Link3, a social application based on the CyberConnect protocol. Link3 is a hybrid of LinkedIn, Medium, and Eventbrite, but it embeds crypto primitives—allowing users to connect wallets, NFTs, and ENS names to build their profiles and influence.

Eliminating data silos can also lower the entry barriers for new developers and reduce the network effects of social graphs, which would otherwise monopolize user data. Open data allows applications to read and write data from multiple social graph protocols; users can connect IDs from multiple Web3 social profiles to one or more applications. Phaver is a great example, connecting users' social graphs from different networks in one interface through integration with Lens Protocol and CyberConnect.

Open Data Standards Provide Us with Open Content Creation Boundaries

Currently, we see examples of open data in existing Web2 social applications. META, the owner of Facebook and Instagram, recently launched Threads. While the long-term value of Threads as an application remains to be seen, it allows users to immediately follow their Instagram friends and connect with them upon registration. However, the data on Instagram and Threads is still isolated within META's walls. Threads has announced the possibility of integrating with ActivityPub, a standard communication protocol that allows users to interact across all platforms using ActivityPub, but the integration has not yet been realized.

The closed nature of Web2 social also has a significant impact on businesses operating on these platforms. Reddit recently implemented API pricing, leading to the shutdown of several applications and sparking strong community backlash. If Reddit were built on a Web3 social infrastructure, this would not be an issue, as these applications and communities could take their fans and content to new platforms with more favorable conditions or consistent value.

In terms of content creation, since users do not need to be locked into one platform, creators can choose to migrate to different applications while retaining ownership of their social graph data, alleviating the situation where platforms change their monetization, management, or revenue-sharing models. In Web2 social, data silos hinder creators' freedom of choice.

Composability: Unlocking a Sea of New Possibilities

Since Web3 social protocols are deployed on the blockchain, they are often highly compatible with other smart contracts and protocols. This open data architecture allows new cryptocurrency innovation developers to freely integrate with Web3 social protocols and applications, such as connecting users' on-chain histories to populate their social profiles, displaying NFTs they own as credentials, and enabling them to convert their content and posts into NFTs for potential sale. Traditional social media lacks composability; even in the few cases where cryptocurrency integrates with Web2 social, it is neither native nor complete.

Combined with open data, the composability of Web3 enables creative developers to integrate their social platforms with crypto protocols—from DeFi applications, metaverse games, DAOs, NFTs, to everything in between. For example, Warpcast is a platform based on the Farcaster protocol that allows users to find other members of the same NFT community, holders of the same POAP, and even link ENS domains to users' profiles. These features are achieved by connecting Ethereum addresses to profiles, creating an on-chain holistic identity. Other platforms also offer similar functionalities, with some platforms (like Phaver) allowing users to connect Lens profiles, ENS domains, and Farcaster IDs to one profile. Another example of Web3 composability is CyberConnect's subscription model, which allows users to define the relationship between creators and subscribers through the powerful feature of "Subscribe NFTs."

Another possibility is SocialFi, a concept recently discussed by Mason Nystrom of Variant Capital. SocialFi refers to the integration of the social and financial layers in people's digital lives. Imagine if traditional social media platforms could seamlessly access traditional financial exchanges, banks, loan providers, crowdfunding platforms, etc. What would they do? Other features of SocialFi include enabling micro-payments on Web3 social applications, on-chain lending credit scores linked to social identities, and biometric identification linked to social profiles.

As the Web3 primitives continue to expand and evolve, the possibilities for cryptocurrency composability are limitless—new experiences await us.

Next-Level Community Empowerment

Blockchain infrastructure is a powerful tool that brings people together for a common goal. In recent years, we have seen this: token-driven communities collaborating to bid for the U.S. Constitution (ConstitutionDAO), voting for DeFi protocol governance (Uniswap, Safe, Maker, Gnosis), investing in digital art (like PleasrDAO), and building social clubs around NFT collectibles. Participants become owners and highly engaged stakeholders.

Combining new innovative technologies like dynamic NFTs with emerging Web3 social protocols will elevate these experiences. Merging real-world data with Web3 can further enhance this experience; for example, certifications, purchases, social relationships, and more relevant communities will emerge immediately, making it easier to form genuine relationships and giving rise to new business forms.

At the same time, Web3 social graphs can be visualized, interconnected by complete identities (such as NFT profiles or other forms of tokens) that reference similar characteristics. Through open data and transparency, platforms can automatically generate communities based on profiles that share similar characteristics with others in the social graph.

Some thought experiments include:

A user on a LinkedIn-like Web3 platform could attach an identifier to their profile linking them to their alma mater, perhaps in the form of an NFT attribute. The platform could automatically create an alumni network community for users with the same alma mater; similarly, global communities could be automatically created, unaffected by Web2 data moats. It not only allows individuals to join communities but also enables artists, writers, influencers, and other creators to build communities with all their followers.

Imagine if an author sells a book with an accompanying NFT; then each NFT holder (also a certified purchaser of the book) could join a community to discuss the book and interact with the author. As we will soon see, practical examples of Web3 community features include users of Warpcast and other Web3 social applications who can easily find other users' profiles within the same NFT owner community. These forms of globally unified community features surpass what Web2 can currently achieve.

The Web3 social application Orb is turning these thought experiments into reality. Orb allows any on-chain activity or owned item to be transformed into a cohesive community. For example, owning a specific number of ERC-20 tokens, holding NFT tickets for specific events, or collectibles can form different communities. Web3 social allows for community building and friendship in new ways, and in a deeper manner than current methods.

Anti-Censorship and Ownership

Regardless of beliefs, convictions, or viewpoints, freedom of speech and expression is the cornerstone of social media, although its limits have always been contentious. Given the strong control traditional social platforms have over our data, they are in an absolute position of power to control online discourse, cancel users' platform permissions at their discretion. Users have no choice but to accept this.

Recently, an instance of platform control was showcased after Elon Musk took over Twitter (now rebranded as "X"). The Twitter Files is a series of disclosed internal documents revealing how the company suppressed and controlled information on the platform based on government requests or what it deemed unsafe information. While Elon advocates for truth and transparency through these documents, ironically, after Twitter was renamed "X," the company unceremoniously took the "@x" account from a user. A similar situation occurred with the user holding the "@music" account.

These examples highlight that on traditional Web2 platforms, users can never truly own their identity or accounts, and in some cases, cannot even voice their opinions. Web3 social platforms address this issue to some extent. Applications built on Web3 social protocols can still manage content, but users retain complete autonomy and can choose to leave one application for another while keeping their data, and even establish their own anti-censorship applications if everything fails. The core principle here is that users should not be forced to lock into specific applications—users can abandon a social application and migrate to a brand new application while taking all their data with them.

Conclusion

What excites about Web3 social platforms is that they bring entirely new experiences for community, commerce, composability, participation, ownership, and identity, while also addressing some of the core drawbacks of existing Web2 social platforms. New ways to build communities, make friends, and trade are just around the corner.

Equally exciting is the caliber of entrepreneurs entering this space. In Superscrypt's investments, Airstack, Collab.Land, Orb, Notifi, and Salsa are tackling different challenges of Web3 social in terms of access, experience, or interoperability.

The road to bringing Web3 social to the masses is long—technology and applications are continuously growing but are still in their infancy. We look forward to more iterations before achieving true product-market fit and will soon share more updates with everyone.