Variant Partner Li Jin: Reshaping the Crypto Social Ecosystem of Love and Reputation

Written by: Li Jin

Compiled by: Deep Tide TechFlow

Although "social" is often summarized as a single overarching category, today's social applications actually exhibit many differences.

One point I enjoy analyzing about social networks is the role they play—how much users crave love and reputation.

Years ago, Twitch co-founder Kevin Lin told me that Twitch provides creators with three dimensions of value: love, reputation, and money. For the purposes of this article, I will set aside money—or the potential for income—because it is an orthogonal dimension that I will explain in detail later.

All social apps fall within the spectrum of love to reputation

In terms of love, some products focus on deepening connections with others. Examples include iMessage, WhatsApp, early Facebook, and Discord. Their value proposition is to connect more consciously with others, nurture existing relationships, and enhance intimacy. These products are typically characterized by two-way relationships, such as friends on Facebook or iMessage. When users engage with products like Discord or WhatsApp, they usually do so for a specific community or person, rather than to discover new content. These products reinforce this value proposition by adopting deterministic algorithms (if A sends something to B, the other person will always receive it).

In terms of reputation, some products help users gain fame or influence. These products are built around the discovery of new content and creators. Examples of reputation-centered social products include YouTube, Instagram, TikTok, and Twitch. These products feature one-way relationships (or "followers"). Influential users specialize, become creators, and reach increasingly larger audiences, a dynamic that does not exist in two-way social networks. Products on this side use probabilistic algorithms to display content based on the likelihood of engagement, meaning users cannot be guaranteed access to their followers.

These two extremes can be summarized as social networks versus social media.

When building products around love and reputation, there exists an inherent tension rooted in the zero-sum nature of time and attention: users have a limited amount of time to spend on any one social application, so applications that emphasize discovering new content from creators rather than interacting with existing contacts are, by definition, more inclined toward reputation than love.

One example here is TikTok's default For You recommendation page: it underweights the importance of the follower graph and instead defaults to showing users new creators and content it recommends.

The opposition of love and reputation is a spectrum; platforms often contain elements that cater to both love and reputation. Instagram—over time, overall trending toward reputation—has features of both fame (Explore, Reels) and love (Direct Messages, Stories, Close Friends). Reddit's homepage can be browsed as a reputation product, showcasing content from Reddit, but if users use the platform to browse specific subreddits, where community members have mutual intimacy, they are using it as a love product. The mix of these two types of features creates higher retention, as there isn't enough engaging love content. WhatsApp, Messenger, and iMessage have maintained their status as pure love tools due to their network effects, but other social applications have had to add reputation features to improve retention.

The broad trend of social products leaning toward "reputation"

I often hear people say that they feel social networks are shifting toward social media on a broader level; applications that once focused on friends are now centered on entertainment, and everyone is now expected to be a creator. Instagram, which was once used to follow friends' lives, is now mostly used to follow creators and brands.

I think this makes sense, and it is driven by business models and incentives rooted in network effects. Social networks with two-way social graphs hit a ceiling of network effects once users reach the limit of people they know. The utility of products like iMessage or early Facebook does not expand with the growth of the total user base. Instead, it reaches a ceiling once users connect with all their friends. However, reputation-based products have more unlimited network effects: users can see content from anyone, and the utility continues to increase as more users join. In an ad-driven business model, keeping more users engaged for longer is the primary goal, and a reputation-driven model is more conducive to expanding user attention and revenue.

Interestingly, love-related social products often do not monetize well through advertising: users understandably do not want ads inserted into messages sent to friends or smaller communities. Instead, the dominant business model for love products is often subscription-based, whether for the platform (e.g., Discord Nitro, or WhatsApp's original $1/year fee) or for specific creators or communities (Twitch subscriptions). This is even more pronounced in dating apps, where subscriptions for Hinge, Bumble, and Tinder can be even higher. People are willing to pay more for more serious relationships and connections.

Successful reputation platforms also have a skill-based status game at their core, as described by Eugene Wei in his article on status as a service. In contrast, that kind of status game is less prominent in love products, limited to smaller networks. Most love-based social products are more like feature-rich communication tools rather than platforms pursuing social status. They provide a utility in users' lives, connecting them with friends or groups, rather than becoming a stage for performance. Clearly, some products introduce status games into love platforms—imagine upvotes/downvotes on a Reddit post—but status games are generally smaller in nature.

Many users have pointed out that the meaningful atmosphere shift on X (formerly known as Twitter) indicates it has transformed from a love-themed platform to a reputation-centered one. While the previous default news feed prioritized tweets from accounts you followed, the new algorithm is filled with posts from people you do not know. The new default "For You" page showcases posts that the algorithm determines—based on engagement likelihood—that you might like. Analysis of its open-source algorithm has also revealed that X Premium (formerly Twitter Blue) subscribers receive boosts in their feed rankings. This design diminishes the curated follower graph over time, opting instead for a more engagement-oriented and recommendation-based model, meaningfully changing the platform's tone; it shifts it from a carefully curated mix of creators to a more viral, trend-driven platform.

As we see in mature social networks, the trend toward reputation creates opportunities for new networks focused on deepening connections. Love-based products have space to serve smaller communities and groups, especially as existing businesses relying on ad-based business models seek increasing user attention to grow.

Newer social media applications often focus on an initial use case targeting smaller groups. Apps like BeReal, Retro, and Lapse each provide their own perspectives on fostering deeper connections with friends, while reputation-based social media overlook this (with varying degrees of success). However, applications focused on smaller use cases often face challenges in monetization and may become victims of their own success, eroding their value proposition of deep connections with smaller groups as they grow and the novelty wears off.

Crypto Social: A New Business Model for Love and Reputation

So far, crypto social has primarily been about love (helping users form and monetize deeper connections), rather than reputation. Compared to Web2, where ad-based business models put pressure on social media and entertainment products, crypto allows love-based networks to uniquely survive and thrive. I have previously written:

Crypto social networks can thrive by enabling the existence of smaller, high-context groups through a new business model. Today, the most important goal of most Web2 social platforms is to grow at all costs, which aligns with their ad-based business models. This means that products focused on smaller groups, such as Facebook Groups or Twitter Communities or the now-defunct Path, do not have a good business model.

Crypto can change this by enabling these smaller communities to exist and thrive in a viable way. This can take the form of shared finances (Nouns DAO or FWB) and creating consistency for maintaining community health, or minting artifacts of on-chain communities as a way to generate revenue (like Crypto, Culture & Society DAO, a learning community).

A few years ago, Facebook experimented with a feature that allowed group admins to charge entry/membership fees to support the costs of managing and maintaining their communities (which for many is a full-time job). For some reason, this feature was discontinued, and FB Groups still have not been well monetized. I believe users are willing to pay to support smaller, healthier communities, but the infrastructure to achieve this is lacking. With crypto, these communities can more easily choose and configure their own business models, and with that, we can see the flourishing of smaller communities.

Narrowing the scope, the biggest achievements in the social space have historically come from the creation of new networks: from real-life friend-based networks (Facebook) to interest-based (Reddit, TikTok) to knowledge-based (Quora). Crypto has the opportunity to attempt to build a new type of ownership-based network, leveraging on-chain assets as the foundation for new communities. We call this idea socio-economic networks (rather than purely social networks).

These communities can deepen connections between users through shared ownership, helping them find their tribe. In the real world, shared ownership often serves as the basis for connection, from neighbors to colleagues in startups. DAOs and NFTs are early examples of high-affinity communities based on on-chain shared ownership. Just in October 2023, over 17 million NFTs were minted on Ethereum and L2; as user activity increases, you can imagine inferring users' interests based on on-chain behavior and showcasing connections based on rich activity history.

Fame and influence present a tricky value proposition in crypto, as there are only about 400,000 active wallets on Ethereum daily. Meanwhile, this number is steadily growing and is now large enough to build discovery-focused platforms, especially those that monetize through non-advertising models. To build a sticky social product that attracts reputation, the key is to tap into user psychology and the desire for social status. This means introducing a new skill-based game.

Skill-based games in the crypto space often focus on the highest earners, biggest spenders, or other finance-related aspects. For example, Friend.tech's leaderboard can be seen as a status game, where rankings are determined by the highest key prices, i.e., the number of holders. I believe that money-based status games are inherently exclusive, favoring those with more capital and can be intimidating for newcomers. Think about it: a new TikTok user might feel they can win the app's core status game, which is creative videos, but a newcomer to a financialized social network might feel at a disadvantage.

Crypto can provide a new, lower-barrier status game of "first proof": who did something first, discovered whom, or minted what first, all based on on-chain activity.

One example in this regard is Sound.xyz's "Earliest" view, which showcases the artists they supported first. This behavior has precedents in Web2, where users enjoy commenting "first" or "early" or "invested at [#] likes" on some content to indicate they were among the earliest to discover it. In a crypto social application, users' actions are timestamped on-chain, and such "first proof" can not only be generated by users but also presented in a more automated way, designing gamified mechanisms around it.

As mature social networks lean more toward reputation, new networks have space to focus on deepening connections between communities. The unique characteristics of cryptocurrency create thriving opportunities for new networks across the entire love-reputation spectrum, allowing users to connect over shared ownership and interests. I believe new business models will emerge to support different and smaller networks, rather than relying solely on ad-based models, to meet the human needs for social status and connection in novel ways.