What is SocialFi?
SocialFi is defined as Social Finance, the combination of Social and Finance.
“SocialFi’ is derived from “Socializing + Finance”, needless to say, it is a whole new financial model contributed by socializing. Due to the impact brought by the Covid-19 pandemic, people are forced to stay home due to the lockdown conditions in many countries. Thus, the interactions between people are getting lesser and lesser. With this brand new financial mode, it is believed that it will increase the interactions between people and this is where the value of SocialFi comes into place.
As one of the hot tracks in the industry, the social token ecosystem continues to grow. After 2020, the DeFi era began. Influenced by the concept of open Finance and liquidity mining, SocialFi began to transform from "Social + Finance" to "Social + DeFi". After the advent of THE DeFi era, NFTFi and GameFi exploded one after another, and SocialFi was highly anticipated by the community. In fact, in the first half of 2021, many new projects with SocialFi concepts are joining the circuit.
At present, the track is still in its early stages of development, with most ecological participants spreading concepts and updating technologies based on social tokens. In most statistical platforms, there are still few platforms that categorize SocialFi concepts alone, and some projects tend to overlap with concepts like NFT and GameFi. On the Coingecko platform, a total of 33 Social tokens are included with a relatively clear "Social Money". Zerion platform collects a total of 18 Social tokens according to the classification of Social tokens.
Blocklike collates public information from multiple channels and sorts out major players in SocialFi's existing ecosystem to show the latest face of the social token ecosystem.
SocialFi track projects are organized based on the following definitions and categories:
Social Tokens are defined as "Tokens that are supported by a person's reputation, brand, or community." Social Tokens are built on the premise that the value of that community will continue to grow. Among them, casting and distribution, content capitalization are more mainstream project ideas.
Social projects manage the communities they create by issuing coins. They can divide the levels according to the activity and contribution of users in the community and enjoy tokenization rights to increase profits for creators, cultural producers and relevant participants. Many tools now support this.
Most of the accounts are based on ERC-20, and mainly carry out technical extension and project innovation from four main directions of distribution mode, asset preservation, token model and community management.
In terms of functions, it is mainly composed of individual tokens, community tokens and social platform tokens. In a more detailed classification, social platform tokens tend to emphasize the circulation of value generated within the platform, while social tokens emphasize the services and value provided by individuals. Dao organization, liquidity mining, and other approaches have also driven the development of community tokens, and many projects intersect with other concepts.
According to publicly available data, the size of the total capitalization of the SocialFi market at the end of June 2022 is estimated at $2 to $20 billion. Such a wide range of values is explained by the lack of clear, well-established criteria that would identify SocialFi projects.
If we include in the scope of SocialFi initiatives created using the mechanics of NFT and NFT-marketplace, which traditionally have a significantly higher capitalization compared to other projects, then the total volume of the SocialFi-market will reach $20 billion (according to information on projects in the Social/Social Network/Art categories). from cryptorank.io and data from projects in the Social categories presented on dappradar.com). If we remove such projects, then the estimate of the capitalization of the SocialFi sphere will drop to $2 billion.
At the moment, the total capitalization and turnover of the SocialFi sphere are significantly lower than those of GameFi, DeFi, and Exchange, which are respectively $300, $500, and $700 billion, according to newsroom.accenture.com and dappradar.com.
The current client base of SocialFi projects, among which more than 5 million people are active users. The data was obtained based on an assessment of the activity of wallet addresses regularly interacting with smart contracts of the projects under consideration for the 2018-2022 period.