Decentralized finance or DeFi has been touted as being revolutionary in many ways, and it is now headed towards transforming the social media realm, which is the fabric of the Internet.
Beneath all the hype of the cryptocurrency industry, the world is slowly realizing the numerous utilities of this sector. The concept of a token economy is one such use-case that has emerged out of this space. Talking about the fusion of DeFi and tokenization bringing about transformation to the social media industry, Framework Ventures’ Vance Spencer, in a recent podcast, stated,
“DeFi is pretty obviously the first subclass of crypto that has real product-market fit. When we take a step back, we have a very long-term vision and we have the idea that social networks will, at some point, be tokenized, the algorithms that dominate the social media platforms will be open-sourced and decentralized in a fair way but we view DeFi as the first step to getting there.”
He went on to add,
“Not only building the tooling side for the developers but the first order of primitives that you need for those things to really function. Our thesis on DeFi is just that it is another just the subclass of the fintech industry and that the next wave of consumer applications in fintech will be powered by crypto.”
Facebook’s Libra continues to be the most popular word-of-mouth token (Despite the fact that it hasn’t been launched) attached to a social media giant, despite the fact that it will eventually be governed by the Libra Association. More recently, the social media company Uhive claimed to be the world’s first crypto-powered social network.
Built from the ground-up to incorporate its own cryptocurrency Uhive Token, the tokens are built on Ethereum blockchain to facilitate multiple transactions across the platform. According to the official release,
“These range from users being paid a share of the revenue their content generates, purchasing spaces (additional profiles), space names, as well as goods and services offered on Uhive’s marketplace.”
The need for decentralization
Decentralization leverages blockchain technology. This not only would hand data control to its users, but also provide financial compensation, content moderation, and payment infrastructure that centralized systems have failed to produce.
Having control over their personal data or ownership and the risk of exploitation that comes along with centralized social media is something that users have realized; ergo the need for decentralization.
Everyone wants to get paid for their contribution. Rightful compensation for the creation of their content and profiting from it is not easy in a centralized model of social media. As the user base of social media platforms continues to grow at an explosive rate, the world will witness a migration of solutions to decentralized systems.