What is SoFi?

The decentralized finance (DeFi) boom in 2020 led to the emergence of new, similar trends, such as GameFi. In 2023, another trend called SoFi started gaining popularity.

What is SoFi?

The term SoFi or SocialFi is an acronym for Social Finance, a concept that combines the functionality of social media and decentralized finance (DeFi). To better understand the essence of SoFi, imagine Twitter (now X) or YouTube, only on a blockchain.

But why do we need decentralized social networks on the blockchain, and why are the existing platforms so bad? Again, the answer lies in centralisation, not to mention that companies like Google, Apple and others take a lot of user and blogger revenue for themselves as an intermediary.

Centralisation, in turn, is characterized by users not having complete control over their content. Many bloggers have faced content blocking or restriction of displays, and sometimes, such actions on the part of platforms were unjustified.

Content published on the blockchain cannot be tampered with or deleted by a third party. In other words, content moderators in SoFi platforms are users themselves. SoFi projects operate on the principle of decentralized autonomous organizations (DAOs), allowing users to participate in their development and influence voting results.

In addition, users of SoFi-projects control their income, not the site, as in the case of YouTube or other similar platforms. Here, the possibilities of content monetisation are not limited in any way, and all the funds received belong to the user — the platform cannot block them, unlike centralized social networks.

Authors can attract audiences by encouraging them directly without having to spend excessive amounts on promotion through advertising or third-party platforms. In this way, the content authors and their audience can earn income.

SoFi opens up new avenues for authors to promote their content as well. For example, they can issue commemorative NFT tokens and distribute them to their subscribers or hold raffles with them.

A brief historical background

Although the term began to be actively used only in 2022, the SoFi concept itself is not a novelty: the first such projects started to appear as early as 2018.

The most famous among them are Steem, essentially a decentralized analogue of Medium, and the blockchain-based streaming platform Theta Network, which are still among the top 100 crypto projects by capitalisation. YouTube co-founder Steve Chen and Twitch co-founder Justin Kan advised the latter.

However, the field was prolonged to develop due to low network bandwidth. Next-generation blockchains, which process thousands of transactions per second, have created decentralized social platforms that compete with traditional marketplaces.

What SoFi projects already exist?

The topic has not been actively discussed in the crypto community for a long time, so newcomers may feel that the SoFi sphere is still in its infancy. But in fact, there are already dozens of well-known SoFi projects. Let's consider the most popular among them.

Friend.Tech

This project, launched in August 2023 in the leading network of the second level Base from Coinbase, has largely contributed to the popularization of the SoFi sphere. Friend.Tech was created by the developer of another SoFi project, TweetDAO, which was unpopular among users.

The Friend.Tech project itself is integrated with Twitter (X) and opens up new opportunities for content creators: for example, it allows them to tokenize user accounts and even issue their own tokenized shares. The owners of these shares receive certain privileges, such as access to chat with a famous blogger.

The project became so popular that in the first month, its users exceeded 80,000, and the trading volume of transactions exceeded $50 million.

Lens Protocol

The platform is a "network for social networks" based on the Polygon blockchain. The developers of Lens Protocol have set an ambitious goal of combining different social networks into one blockchain platform.

In addition, the team aims to make the DeFi sphere more accessible to a mass audience that often has difficulty interacting with it. Users can migrate their social media data to other platforms.

CyberConnect

A social network that allows developers to create their own SoFi applications. The project was backed by the Binance exchange and launched as part of the 37th luncheonpulse. CyberConnect has attracted many Web3 companies who have opened their profiles in this project.

CyberConnect profiles are smart accounts that appeared on the Ethereum network after the introduction of EIP-4337 and provided flexibility in customizing wallets and enhancing their functionality.

Galxe

The leading platform in the Web3 environment for completing tasks and quests. Many projects such as Arbitrum, Polygon, LayerZero and many others release their quests for users on Galxe.

Users can get special badges or points by completing tasks, later bringing their owners some bonuses, such as free tokens (airdrop) or early access to the project's products.

Galxe is not the only project of its kind. In addition to it, there are similar SoFi platforms such as Layer3 and Zealy (formerly Crew3).

Theta Network

A decentralized streaming platform built on a proprietary network. The Theta Network uses blockchain to improve streaming video content's efficiency, quality, and availability.

Rather than centralized servers, Theta Network uses a distributed network of nodes to keep the platform up and running. Users can become network members and share their computing resources, receiving THETA native tokens as a reward. The project has another token, TFUEL, which rewards content creators.