SocialFi Platforms Can Boost the Trillion-Dollar Creator Economy Through a Hybrid Approach

• Community is a core part of any successful blockchain platform.
• SocialFi platforms support Web3 natives, allowing them to engage in the new creator economy.
• Despite this, SocialFi platforms have struggled to win over mainstream audiences.

Nearly 30 years ago, Bill Gates wrote an essay and gave wings to the term ‘Content is King’, suggesting that in the future, most of the attention (and money) earned on the internet would come from content creation.

Fast forward to 2024, and we can see that this quote has aged well. As a global society, our attention is fixated on digital content published online. If content is king, and it is, then creators have the power. 

Revenue Streams for Content Creators

In the US alone, the vast majority of Americans consider content creation as a serious career choice. They aren’t wrong. The North American creator economy holds 40% of the global market  share, nearly double that of Europe. The creator economy is big, but it’s just getting started. Brands are now allocating the majority of their budgets to influencer marketing and UGC, with a Deloitte report  citing that 42% of high-revenue brands have invested a significant portion of their marketing budgets into creator partnerships.

While there is a significant amount of marketing dollars allocated to the creator economy, the fact remains that an overwhelming majority of creators are inadequately compensated, considering the amount of time and effort they put into content creation. 

Thankfully, many creators are moving away from the rigid mindset of thinking that becoming a celebrity influencer is the only path to success, and are becoming more entrepreneurial.  Today we’re seeing micro influencers with only a few thousand followers diversify their revenue streams, start consulting businesses, and build niche communities.

For SocialFi projects, this aspect of community building has always been central to their offering, and this USP has been gaining attention within the creator community. Despite this, most SocialFi platforms, especially dApps, have yet to fully crack the secret to mainstream adoption, something traditional social media dominates and isn’t giving up market share easily.

Capturing the Next Wave of Social Users

It’s no secret that SocialFi platforms have struggled to win a significant adoption and retention rate from mainstream users — let’s call them Web2 natives. However, the unique benefits of a tokenized ecosystem that SocialFi provides is an opportunity for not only creators to flourish but the users who support them.

Tokenization enables users to become more closely involved in the growth of their favorite creators while getting rewarded for contributing to the ecosystem – for example, by consuming content and engaging with communities. As a result of this participation and engagement, their user experience is enhanced. This circular economy or engagement and rewards for a user simply doesn’t exist on Big Tech’s web2 social platforms.

When will SocialFi Give Big Tech a Run for Its Money? 

It all comes down to solving for UX. To start, SocialFi platforms will need to make onboarding as simple as web2 natives are used to. If signing up to a new platform requires connecting a MetaMask wallet or Phantom wallet, you’ve already lost 90% of users.

Want mass adoption? Forget promoting decentralization, NFTs or content ownership. That doesn’t solve a creator’s problems. A more attractive offering for the masses is a crypto wallet with a simple Google login, and perhaps token rewards for every sale they make on the platform. 

Next, a fusion of DeFi features that are so seamless that creators and users don’t even know they are using blockchain technology. Mechanisms such as earning tokens for creating content, taking basic actions on the platform, and then offering an off-ramp solution without leaving the platform or the ability to save money on transactions by using crypto rather than fiat for payments.

While the formula appears simple, most platforms tend to focus too heavily on the tech and buzzword aspects of Web3 rather than providing actual solutions for creators. The result is a high dropoff rate, leading to derailed projects and significant investor losses. 

Taking a User-Centric Approach

The data seems to imply the same: as a sector claiming to be the future of the trillion dollar creator & freelancer economy, the market cap of SocialFi tokens is just over $2 billion . That’s not great. This low overall market cap is the result of low mass adoption, and a fundamental change in builders’ mentality will be required for SocialFi to truly thrive.

SocialFi founders need to pivot from the ‘If we build it, they will come’ attitude and instead take a user-centric approach to solving problems that creators are actually complaining about. 

To start, try rolling out hybrid ecosystems that merge blockchain features (such as tokenization) with non-blockchain architecture (AKA, cloud infra), providing an intuitive and seamless user experience that does not introduce a steep learning curve. This will require building an interface that feels like a direct extension of existing platforms that the web2 natives are already familiar and comfortable with.

In essence, SocialFi needs to eliminate the intimidating processes of Web3. Integrating a token with real-world utility into this seamless ecosystem will add the much-needed fuel to attract and retain creators and their followers, to ultimately establish a transactional system where all digital interactions are a rewarding experience.