Social media has become a part of our daily lives. Every day, people log into their accounts to chat, share posts, and have fun. However, only a few people receive a share of the ad revenue collected by social media companies.

Here is where SocialFi steps in. Short for Social Finance, SocialFi is a part of the new Web3 technology that aims to change how conventional social media operates. Instead of social media companies owning your data and monetizing your interactions, you become the sole owner and can earn directly from your content.

SocialFi 101

SocialFi blends the worlds of social media and decentralized finance. If you haven’t heard about decentralized finance, otherwise known as DeFi, it is a financial system based on blockchain technology. Unlike traditional finance, it does not rely on banks—instead, you can store your coins in a crypto wallet or trade them on flpp.io.

On a SocialFi platform, you can monetize your social media account and earn directly without working with agencies or creator programs. It transforms online engagement from entertainment into an economy.

How Do SocialFi and Web3 Work?

At the heart of SocialFi are three major components, which we will discuss below.

• Social Tokens

Social media users can generate and issue their own tokens. These tokens act like currency and can be used to purchase exclusive content or reward loyal fans. The social tokens can even give you voting rights in community decisions.

• NFTs

In traditional social media, people can plagiarize your art without any serious repercussions. However, this is different in SocialFi, where NFTs exist. NFTs can represent ownership of digital assets, such as artwork, event tickets, or collectible badges.

• Decentralized Ownership

SocialFi apps are built on Web3 technology, which shifts power from centralized tech corporations to individuals. This means users, not corporations, own their content and data. Every comment, meme, or funny tweet you create is stored in a decentralized and transparent database.

As a user, you can choose how you want to monetize your content.

Benefits of SocialFi and Web3

So, why are many people excited about the future of SocialFi and Web3? Well, there are a couple of reasons why, which we’ll discuss below.

• Fair Rewards

Nowadays, only creators with large followings on social media make money. The biggest chunk of ad revenue ends up with the social media company, which is quite unfair. SocialFi and Web3 give creators more control over revenue sharing.

• Data Ownership

In traditional social media, users are the product. The corporation behind the social media app owns your data and all of the content you create. SocialFi flips this by giving you ownership. You decide if and how your data is used, and you can earn from it.

• Powerful Communities

Censorship and major decision-making on social media are done by the corporations and the government. This often leads to narratives and silencing voices from some users. On SocialFi, power is decentralized, and users can vote before major decisions are made.

Final Thoughts

SocialFi and Web3 bring a new era of how people use the internet. The project is still new, but there is hope it will trigger changes and transform social media into a thriving economy.