Initially conceived for academic and military use, the internet transformed into a commercial and social hub, deviating from its decentralized roots. Centralized platforms dominated, prompting the emergence of alternative social networks based on Web3 and SocialFi ****protocols.
In web3, SocialFi protocols become the default in decentralized systems once data is on-chain. Blockchains serve as unbiased backend servers, with frontends indexing and directly serving content to users. Public-private key pairs manage identity, and on-chain primitives like NFTs act as decentralized identifiers.
On-chain data fosters competition at the front-end layer, offering diverse features. Users can select algorithms, regain the value of their data, and monetize content directly, improving the experience for creators often overlooked in the monetization process.
In this article, our goal is to uncover the fundamental framework of the SocialFi market, a sector that has already garnered widespread attention. We will focus on its various segments, with a particular emphasis on one of its emerging and highly promising subdivisions known as InfluenceFi.
The SocialFi market encompasses a diverse array of projects, each characterized by distinct objectives, target demographics, prospects, and opportunities. Within this expansive landscape, it is possible to categorize all projects into five distinct segments, highlighting the multifaceted nature and potential within this dynamic market.
Initiatives designed to promote a well-balanced lifestyle, such as applications for fitness, sports, and the monitoring of physical activities, aim to gather and analyze pertinent data. These projects contribute to fostering healthier living by leveraging technology to enhance our understanding of physical well-being and encouraging positive lifestyle choices.
Initiatives directed towards integrating technological advancements in the realm of communication represent endeavors focused on the deployment of cutting-edge solutions.
Initiatives focused on implementing communications and diverse user interactions within a specially crafted virtual world aspire to cultivate immersive and dynamic experiences.
Initiatives targeting extensive fundraising efforts encompass various activities such as charitable endeavors, solicitation of donations, and related ventures. These projects are geared towards mobilizing substantial financial support on a broad scale, emphasizing altruistic causes, philanthropy, and other forms of financial backing.
Initiatives designed for “prof-members,” individuals with skills, knowledge, or other forms of social capital that can be monetized, constitute initiatives tailored for a specific user base.
In this context, a “Seller-Receiver” model is introduced, where the seller owns social capital, and the buyer, who acts as the reader, facilitates the monetization of this social capital. This constitutes the primary distinguishing characteristic of the Influence Fi segment.
An example is Chirpley, an influencer marketing platform designed for small influencers. The platform aims to create a decentralized organization focused on the interests of its users, including small influencers and marketers. Using Artificial Intelligence, Machine Learning, and Big Data technologies, Chirpley performs virtual mapping. Its distinctive feature lies in enabling marketers to initiate campaigns with thousands of small influencers simultaneously within minutes, providing a cost-effective and time-efficient solution.
An example of this trend could be the League.Tech as it presents a structured access system, incorporating advanced trading features and increased earning prospects for creators. This approach aims to dismantle entry barriers, fostering inclusivity and accessibility for all participants. Additionally, the platform empowers creators through key shorting, providing novel opportunities for financial success.
Based on publicly available information and recorded investment rounds, it can be inferred that investors find each segment of the SocialFI market quite appealing. The diagram provides details on the investment funds allocated to each segment of the project.
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Since 2021, investments in the SocialFI market have surpassed $864 million across 88 projects. Examining the same metrics based on allocated segments reveals the following key points:
Through an examination of investment deals within the SocialFI market segments since 2021, it is evident that InfluenceFI stands out as the predominant leader, both in terms of the quantity and size of the deals.
However, it is noteworthy that other SocialFI segments have been progressively gaining traction, experiencing heightened turnovers. Moreover, the emergence of novel concepts is shaping new segments and niches within this market, underscoring a discernible rise in interest from institutional investors and the broader community.
Apparently, at the moment we are witnessing the formation of fundamentally new branches of the SocialFi industry. Therefore, in our opinion, the emergence of some of the most innovative projects can be expected in relative sectors such as MetaFI, CommunicationFI and other SocialFi niches.
The acceptance of decentralized applications by current social media channels remains uncertain, and only time will reveal the outcome. However, there is optimism for the future, with many turning their attention to the Web3 sphere. The implementation of SocialFi applications across the digital landscape has the potential to enhance social networks, while the InfluenceFi segment could establish an equitable method for creators and social capital owners to generate revenue. A decentralized network offers users a secure platform for earning, buying, and selling with NFTs, fostering collaboration between businesses and communities to mutually generate revenue.
