In theory, SocialFi – the blend of decentralized finance and social networking – should be a killer app for Web3. It promises a future where users own their content, control their data, and earn a fair share of the massive value they create online.
But in practice? SocialFi has struggled to move beyond niche enthusiasm. Once-hyped platforms like Friend.tech saw brief surges of just 80,000 daily active users in 2023 before fading into near irrelevance at below 10,000 users. Despite crypto’s global reach and deep communities, SocialFi has yet to capture meaningful mainstream traction.
The concept is still sound – perhaps more than ever in a world where data privacy concerns and creator monetization are top-of-mind. But for SocialFi to succeed, three major shifts are needed: scalable infrastructure, seamless user experiences, and unified social layers.
A Look at SocialFi: The Intersection of Social Networks and DeFi
In this post, we take a look at 6 social networks leveraging blockchain to offer users enhanced control over their data and opportunities for monetization.https://t.co/RHlBCvp46k @farcaster_xyz @friendtech… pic.twitter.com/l4xj1Mjhvv
— BitKE (@BitcoinKE) June 2, 2024
Let’s break that down.
1.) Infrastructure Must Be Built for Social-Scale Interactions
Today’s leading blockchains aren’t optimized for the firehose of activity seen on platforms like Instagram, TikTok, or X (formerly Twitter). These platforms process millions of interactions per second — from posts and likes to uploads and replies.
By contrast, Ethereum handles roughly 15–20 TPS. Even high-performance chains like Solana (up to ~5,000 TPS) are nowhere near what’s needed for global-scale social media. And let’s not forget the user-killing friction: slow confirmation times and fluctuating gas fees.
SocialFi can’t win with this foundation. The next evolution requires purpose-built, modular infrastructure: rollups for scalability, decentralized storage for media, and Layer 2s or appchains optimized for social transactions. Projects like Farcaster (on Optimism) and CyberConnect’s L1 chain are already moving in this direction — but we need more.
Apparently, https://t.co/oxXC4zMLVR, the company behind the EOS Blockchain Protocol, is spending a whooping $150M to build Voice, a decentralized social media platform, and another $30M to acquire the https://t.co/EGnLk7MEVn domain: https://t.co/0RajaB6bwz #EOS pic.twitter.com/4YIOO1SV3f
— BitKE (@BitcoinKE) June 20, 2019
2.) The UX Must Compete With Web2 — Without the Complexity
Here’s the truth: mainstream users don’t care about decentralization unless it’s invisible. They care about speed, simplicity, and value. The average user isn’t going to wrestle with wallet popups, pay-per-click gas fees, or unfamiliar crypto lingo.
This is where SocialFi platforms continue to fall flat.
Compare that with the addictive ease of TikTok’s algorithm or Instagram’s polished UI. Web2 companies invest billions annually into R&D for a reason — the user experience is everything. Until SocialFi becomes mobile-friendly, frictionless, and intuitive, it will remain confined to crypto-savvy users.
Winning platforms will abstract away crypto complexity while offering new, tangible benefits: content ownership, direct monetization, cross-platform portability.
[TECH] Meta Reportedly Working on a Decentralized Social App, Codenamed P92, that Could Rival Twitter: According to reports, Meta (formerly Facebook) is developing a new app for text-based content that will .. https://t.co/VmtkFo7c78 via @BitcoinKE
— Top Kenyan Blogs (@Blogs_Kenya) April 6, 2023
3.) SocialFi is Fragmented — and That’s Breaking Network Effects
In the current Web3 landscape, SocialFi is divided across chains and protocols that don’t talk to each other. What happens on Lens doesn’t follow you to Farcaster. Friend.tech’s monetization tools are locked into their own system. It’s like trying to email someone on Gmail from Outlook — and being charged for it.
That’s not a scalable model.
The future of SocialFi must be composable and portable. A user’s identity, content, social graph, and reputation should travel freely across platforms. Tools like ENS, decentralized identity layers, and open social standards are critical to this evolution.
Only then can we unlock the network effects that made Web2 giants so dominant — but this time, with value flowing back to users, not just platforms.
Why Crypto Companies Need to Focus on Embedded Finance
One of the most promising areas for crypto companies to focus on is embedded finance which involves integrating financial services into non-financial products and services.
In this article, we discuss why embedded finance… pic.twitter.com/B85eie7Jll
— BitKE (@BitcoinKE) June 12, 2023
4.) Build for the Creator Economy — Not Just the Crypto Economy
SocialFi’s true potential lies in what Web2 still doesn’t do well: fair, direct, and programmable monetization.
With blockchain rails, we can go far beyond tipping and ads. Imagine:
Viral trends with automated revenue splits across multiple creators
Token-based fan clubs with gated content and real ownership
Cross-platform audience portability, free from algorithmic suppression
These aren’t pipe dreams — they’re entirely possible today. But only if SocialFi tools are built for creators first, not just traders or early adopters.
Creators Using OpenSea Earned Over $1 Billion from Creator Fees in 2022
A Missed First Wave — And a Massive Second Chance
SocialFi’s early experiments were ambitious but flawed. They overestimated how much decentralization alone would matter to users — and underestimated the importance of design, accessibility, and ecosystem cohesion.
But we’re still early.
With the right infrastructure, improved UX, and unified social layers, SocialFi can do what no Web2 network ever could:
Give users true ownership
Creators real independence, and
Communities lasting equity
in the platforms they build.
That’s not just a Web3 ideal. It’s a global opportunity.
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