The Web3 Social Media Long-Term Win
Social media platforms create value. The value is the result of the social media activity within each platform. The data is so valuable that companies are willing to pay a huge amount of money to have their brands
advertised to targeted users. The money is flowing unidirectionally in the hands of social media shareholders, that keep investing in the product teams to build better UX, better algorithms, and better features.
In other words, web2 social media platforms sell their product (i.e. users’ data) to companies using targeted marketing strategies in exchange for capital. One of the biggest benefits of web3 is to remove the intermediary. Web3 social media can therefore capture the user’s data value, enriched by even more on-chain data, and sell it to the same companies advertising their products on web2. The biggest difference between the web2 and web3 models is that the revenue generated gets paid back directly to the users.
By removing the web2 middleman, a large reward gets paid back to the users. The more economic incentives
are offered to users, the more they will be willing to experiment with the web3 social media platform. The more users, the bigger the network effect. The bigger the network effect, the bigger the reward paid back to
users. A positive loop to the moon! More users move to web3 social media because there is an added economic incentive provided.
Solution
The profile monetization should be transparent. It must be visible who is paying for what to advertise on social media platforms. Users must have the ability to opt-in/out.
So far, the biggest tentative to building a social media ecosystem is Lens Protocol. I have been building on top of Lens for the last month and the modular approach is something worth investigating. Among the
current whitelisted modules, profiles can be rewarded for the content they produce when a user decides to collect a post for example. However, the current approach doesn’t allow users to receive rewards for the value they generate with their social media activity. This is also true because the industry is at such an early stage that companies don’t see yet the benefit of advertising their brand on web3. I believe that it is an
inevitable step once more users get onboarded on web3 social media platforms. What is needed to support a profile monetization model:
• Social media dApps must support logic to display promoted and targeted brand content
• Social media dApps must support the ability for the user to opt-in/out of their profile being used for
revenue generation
• Smart contract that stores the investment made by companies to promote their brand and pays users in
proportion to their activity
When I mention web3 social media value, an immediate comparison is MEV. MEV is the value generated by block creators in ordering transactions on chain. Likewise, social media platforms extract value from social
media activities and sell it to interested companies. Flashboat had the key role of democratizing MEV by allowing more parties to participate and making it visible. I envision a similar model happening in web3 social
media.
“SEV” (social extractable value) is the value captured in the space. A “social Flashboat” will be in charge of establishing a connection between dApps and companies willing to promote their product. Different strategies will be proposed with dApps competing to offer users the best combination of rewards/algorithms. Transparency will rebuild the trust between users and social media. That’s finally how web3 is going to replace web2 social media.
