IWD 2024: SocialFi is a new frontier – here’s what you need to know

The merging of cryptocurrency and decentralised finance (DeFi) with social media has given rise to a new phenomenon - SocialFi. Although very much in its infancy, SocialFi is poised to reshape the way we interact, share, and monetise our online presence.

So, what does a SocialFi universe look like, and what is its future?

SocialFi today

The emergence of SocialFi 2.0 represents a fascinating new chapter in the way we interact online and is off to an extremely promising start.

There are currently several examples of SocialFi that are enjoying success, including KangaMoon, a new social-fi project that aims to create 'one of the most vibrant DeFi communities in the world, connecting investors and meme enthusiasts in a single ecosystem'. In February it attracted more than 2,000 users in a single week. 

Another example is xNinja.Tech, which launched in February 2024 offers a unique blend of social media interaction, gamified elements, and cryptocurrency rewards. Since its launch, xNinja.Tech has already witnessed significant progress, with more than 79,000 active users joining the platform in its first month.

The hype surrounding crypto-native social media is not new, but this fresh crop of Web3 social apps are firmly positioning themselves as contenders against the entrenched social media giants.

Can SocialFi take on social media's big players?

One of the goals of SocialFi is to provide an accessible and interactive hub for influencers and content creators to not only manage their interactions but also generate income for the valuable content they share. It will ultimately benefit more than just influencers and content creators, but all users who engage with online communities.

As such, SocialFi is certainly able to take on the world's largest social media platforms by offering plenty of advantages over traditional social media.

Firstly, the financial incentives for social interactions mean users don't have to depend on advertisers to get paid. 

There are also advantages in terms of privacy and data security, as the lack of a centralised database removes the risk of personal data leaks, and SocialFi grants users full control over which data they want to share.

Perhaps most importantly, asset ownership on a SocialFi platform can't be changed by the platform's owners due to the utilisation of blockchain. 

While SocialFi has the potential to revolutionise the social media landscape, challenges remain, such as blockchain scalability, user adoption, and regulatory issues. 

Fintech and social media; a match made in blockchain heaven?

For many years, the tech industry has worked to create frictionless payment journeys and seamless transactions. Meanwhile, advances in user targeting have allowed advertisers and apps to better understand their users.

With the advent of Web3 comes the next evolution in fintech, powered by social media: offering an unprecedented degree of access to digital wallets and data by merging the capabilities of decentralised finance with the user engagement and connectivity of social networks. 

By including digital tokenisation as part of their social-media strategies, fintechs can create a more inclusive and empowering financial ecosystem - bridging the gap between interactions, branding, expertise, content creation, and finances in a decentralised landscape. 

The outlook is bright for SocialFi, as users gradually come to understand and embrace the Web3 world. It's already clear that the entire social media landscape will gradually change due to the advantages provided by Web3 elements and SocialFi concepts. It means the line between Web3, and "traditional" social media platforms will become increasingly blurred in the coming years.

The bottom line is that connecting consumers and fintech works to the advantage of both. SocialFi provides numerous benefits to communities and individuals, enabling enhanced user engagement, decentralisation, transparency and lower transaction costs.