For several years, social media has shaped how people connect, share, and build communities and platforms like Facebook, Instagram, and TikTok have dominated daily life, but they also control user data, decide how content spreads, and capture most of the money generated from ads and engagement.
In Web3, a new vision for social networking is emerging, and it is called SocialFi, a mix of social media and DeFi. The goal is to build social platforms where users, not companies, own their data, control their identity, and even earn from their interactions, and with tokenized networks and decentralized identity tools, SocialFi promises to flip the social media business model on its head. But can it really deliver?
Case Studies: Lens Protocol, Friend.tech, and the “Tokenized Engagement” Experiment
The first wave of SocialFi experiments is already here, and one of the platforms at the front is Lens Protocol, which is a decentralized social media network built on blockchain. Unlike Twitter or Instagram, Lens stores posts, profiles, and connections onchain. This means users truly own their content and can take it with them to any app built on Lens. Developers can build new social platforms on top of the Lens ecosystem, all while keeping the same user base. This creates an open and portable network where no single company can lock users in.
Another example is Friend.tech, which gained a lot of attention in 2023 and 2024. The app allowed users to trade “shares” of people’s online presence, and buying a share gave access to private chats with the person, turning social interactions into a market. It showed how tokenized engagement could work, but also revealed many risks. At the height of it, Friend.tech had millions of dollars in trading volume, but speculation soon took over and prices became driven less by community value and more by hype. Still, it proved there is interest in tokenized networks and new ways of interacting online.
Both Lens Protocol and Friend.tech highlight the potential of SocialFi but also its challenges. While decentralization brings freedom, the economic layer can create volatility that distorts genuine human connection.
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Social Tokens Are Changing How Creators Earn
Traditional social media runs on ads, and these platforms gather data about users and sell it to advertisers, while creators often receive little in return. SocialFi introduces social tokens as a new monetization model. Instead of depending on ads, creators and communities can issue their own tokens with these tokens unlocking gated content, giving voting power in a community, or representing access to private groups and events.
For example, a musician could launch a token that grants fans access to exclusive tracks, online meetups, or early concert tickets. A writer could issue tokens that allow holders to shape future topics or get direct access to premium content. This shifts power away from platforms and toward creators and communities. The rise of Web3 social media means that engagement itself becomes an economic activity, and fans can directly invest in the people and projects they care about.
The tokenized model also allows communities to share in success, because when creators grow, their tokens may gain more value, rewarding early supporters. This dynamic creates a two-way relationship between creators and their audience, something traditional social media has never offered.
Identity, Privacy, and Self-Sovereign Data in SocialFi
One of the biggest promises of SocialFi is control over identity because in Web2 social media, platforms decide what data to collect and how to use it. Users often have little choice but to hand over personal information in exchange for access. SocialFi aims to fix this by using decentralized identity and self-sovereign data.
With decentralized identity, users can log in to platforms with wallets instead of email or phone numbers. Their personal data is stored securely and shared only when they decide, and this means privacy is stronger, and the risk of mass data leaks is reduced. Self-sovereign data also allows users to move seamlessly across platforms without losing their identity or followers.
Imagine creating a profile that works across many SocialFi apps, you own your posts, your community, and your reputation, no matter where you go. This model not only protects privacy but also gives people more power over their digital lives. For communities often excluded or censored on traditional platforms, this could be game-changing.
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Risks: Speculation, Sustainability, and Scalability
Even with all these promises, SocialFi faces serious risks; the first is speculation. Friend.tech showed how quickly financial hype can overshadow genuine social interaction, and if every social connection becomes tokenized, platforms risk turning friendships into investments, which may feel unnatural.
The second challenge is sustainability, because building decentralized networks is complex, and most SocialFi platforms still depend on a small base of early adopters. Without broad appeal and strong community governance, projects risk fading once the hype dies down.
The third issue is scalability, in that blockchain networks often face limits in speed and cost, and if millions of people were to use SocialFi daily, platforms would need to handle massive amounts of data and interactions without slowing down or becoming too expensive. Some projects are experimenting with layer-2 solutions and optimized protocols, but it remains a technical hurdle.
Is SocialFi the Upgrade Social Media Needs?
SocialFi represents one of the boldest experiments in Web3 because it combines tokenized networks, decentralized identity, and creator-owned monetization, challenging the dominance of traditional social platforms. Case studies like Lens Protocol and Friend.tech show both the promise and pitfalls of this new model, and on one hand, SocialFi could empower creators, protect privacy, and create thriving crypto communities. On the other hand, it risks being overtaken by speculation and may struggle to scale to billions of users.
Whether SocialFi can truly redefine social media depends on how these challenges are solved and if platforms can balance financial incentives with genuine human connection. SocialFi may reshape how people interact online, but in the end, the vision is clear: a Web3 social media world where people, not platforms, are in control.
Disclaimer: This article is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence.
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