_iant Partner: Assets and Ideology in Web3 Social Networks

The approach to building a successful Web3 social network is asset-first, not ideology-first.

Written by: Li Jin, Partner at Variant

Compilation: Luffy, Foresight News

There are two main approaches to building a Web3 social network: asset-first and ideology-first.

At the heart of the asset-first approach is the idea that users are profit-driven, putting money at the forefront of the platform by unlocking digital ownership. Financialization features will allow users to spend and earn profits within the network.

BitClout is the quintessential asset-first Web3 social network, where users are able to stake the potential of famous personalities by trading Creator Tokens, creating a speculative social game within the network. Lens is another example of an asset-first Web3 social network, where user posts are instantiated into NFTs that can be collected and purchased, with top creators earning tens of thousands of dollars from collectible posts. PFP NFT communities can also be thought of as asset-first social networks: they are interest groups assembled through collectibles. In all of these cases, the motivation for users to engage in social networking is not purely intrinsic, but involves, at least in part, a potential financial gain, like collecting stamps or baseball cards: besides pleasure, there may also be financial gain due to appreciation .

In contrast, an ideology-first approach needs to align with users’ values and ideals. This means emphasizing the features brought about by blockchain technology, such as censorship resistance, data privacy, social graphs, and content portability. The actual user experience of such Web3 social products may be very similar to Web2 products, the difference is that the underlying architecture involves storing part of the data on-chain.

My view is that Web3 social networking will succeed by taking an asset-first approach, i.e. creating monetization opportunities that attract users. In other words, these networks are not purely social networks, but socioeconomic networks. This approach also creates a more clearly differentiated user experience that should theoretically have wider appeal (income is a universal need, and ideals are too abstract for many). This also mirrors the path of widespread adoption of cryptocurrencies in other areas, including NFTs, DeFi, and even L1: the desire for financial gain guides new networks and applications and plays a key role in the process of widespread adoption.

To be clear, taking an asset-first approach does not mean only catering to speculators and creating easy-to-manipulate financialization games. Social networks are easily polluted with spam and vandals, creating negative network effects. Unlike DeFi lending protocols, in social networks all liquidity is valuable, even if it comes from financially motivated users, the quality of content and users matters. Simply rewarding the creation or use of all content is too blunt an incentive and can lead to a web full of spam, useless content, or even harmful content.

A successful financial game with a Web3 social network at its core should combine intrinsic and extrinsic motivation. Stealcam is a content-sharing platform that allows fans to sell their own NFT for profit, a mechanism that attracts both yield-seeking speculators and real fans.

Taking an asset-first approach will also allow the network to build novel social graphs. Social networks are built around different social graphs that form the basis of their network effects: Facebook starts by leveraging your real world friends/college campus graph; LinkedIn lists your professional connections; TikTok lists your professional connections based on your Interest behaviors on apps build social graphs. Asset-first social networks can pioneer and popularize ownership graphs, where users connect through shared on-chain ownership. The PFP community is the original version of this idea that we've seen. As the data on the user ownership chain grows, the ownership graph can richly reflect the interests of users.

In conclusion, now is a rare window of opportunity to build a Web3 social network. Incumbent Web2 social companies like Twitter and TikTok are facing upheaval. Our vision for a Web3 social network is rooted in leveraging the unique incentive features of cryptocurrencies to deliver a differentiated user experience.