What Is SocialFi (Social Finance) And Its Role In The Future

SocialFi participants are software developers and users who independently control information, freedom of speech, and the ability to receive money in social networks. For the activity, participants receive a reward in Cryptocurrency, NFT tokens make it possible to take part in management.

Cryptocurrencies are potentially ubiquitous, they make it possible to monetize absolutely any type of activity. Until relatively recently, the ability to quickly convert MATIC to BNB looked like something from the realm of fantasy, and today coins from GameFi and SocialFi projects are traded on crypto exchanges.

What Is SocialFi (Social Finance) And Its Goals?

SocialFi (Social Finance) is nothing more than a new generation of social networks that are based on the blockchain. Unlike the already traditional Web2 social networks, they are decentralized and integrated with decentralized finance.

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The control function in them is assigned to users.

Structurally, SocialFi projects are a kind of DAO organization and are suitable for protection from decisions from the “center”. In addition, the capabilities of the blockchain are already solving the problem of bandwidth, which is needed for interaction in social networks.

The goals of creating SocialFi are as follows:

Turn participants into beneficiaries.
Provide opportunities to communicate in social networks and earn.
Create tools for monetizing the contributions of participants to the development of the social network.

Social finance includes four elements:

Product: These elements are focused on specific topics for small communities.
Social Network: This is a pool that is formed on the basis of a specific idea and is based on social communication.
Content Creation: A direction that involves the inclusion of creative platforms and exchanges.
Mixed group: It includes elements of Content Creation and Social Networks.

What Gives The Implementation Of SocialFi

Implementation of Web3. Social Finance is creating a new structure based on Web3 and thereby helping to increase its popularity.
The DAO structure gives users the opportunity to earn. SocialFi projects use their own coins, which can generate regular income. There are social tokens that function at the user and application levels. The value of the coin is determined by the level of influence of the participant.
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An adequate combination of censorship and freedom of speech. The system provides algorithms for protecting against dangerous content while maintaining the right to speak out.
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The nodes have the right to block dangerous publications, and if someone approves them, he is subject to sanctions.
Digital property rules. The use of an NFT image makes it possible to apply new identification principles. By creating a SocialFi profile, the user can use the NFT as a user pic and verify ownership of it.
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NFTs greatly simplify copyright protection, which is very important for content creators. They can earn from their intellectual property and share the income with social coin holders.
Privacy and protection. When registering on a classic social network, a user is required to provide quite a lot of confidential information. This information is stored in the system, but if the server is hacked, this data can be in the hands of attackers. This is not a hypothetical threat, personal data leak scandals happen quite often. Since SocialFi is based on the blockchain, they are able to ensure the anonymity of users.

Is It Worth Investing In Social Finance?

The investment prospects of the SocialFi sphere are beyond doubt. This sector has a high potential, including due to the growing interest in digital assets and the improvement of blockchain technologies.

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Among SocialFi projects, there are already leaders, in particular, the financial division of Solana Ventures, the investment program of the Binance crypto exchange, Paradigm, and its fund for financing cryptocurrency startups.

Of course, investing in SocialFi at the current stage of its formation is associated with very high risks and when making investment decisions, it is necessary to conduct your own market research. If you have come to the conclusion that the game is worth the candle, you can always buy any of more than 2000 digital assets on LetsExchange for the purpose of investing or making other ways to earn money.

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