The Rise of SocialFi: How TON could Leading the Next Bull Market?
In the evolving landscape of onchain technology, SocialFi—a fusion of social media and finance—is emerging as a revolutionary paradigm.
Among the various players in this space, The Open Network (TON) stands out with its inherent advantages, promising to redefine how we interact and transact online and becoming the hottest sector in the future.
2024 marks a significant year for SocialFi, driven by several trends and technological advancements reshaping how we interact online. The integration of blockchain technology into social platforms is enhancing user control and content monetization.
As of July 13, SocialFi Coins have a combined market cap of over $2.95 billion and a 24-hour trading volume of over $135 million.
Source: Crypto.com
Social trading is a significant component of the broader SocialFi ecosystem. While SocialFi encompasses various social media interactions, turning every like, comment, and share into potential gains, social trading focuses specifically on trading and observing the trading behavior of more experienced traders. The social trading platform market is expected to reach $3,774.17 million by 2028, up from $2,229.56 million in 2021, according to Research and Markets.
This growth highlights social trading as an important catalyst shaping the future of DeFi. Web3 social trading dApps are becoming pivotal to the SocialFi ecosystem, providing infrastructure for secure and transparent social trading.
Social trading can address key issues in SocialFi, such as accessibility and incentives, leading to transformative changes like increased market participation, enhanced learning and skill development, democratization of financial information, community engagement, and transparency.
Why SocialFi Is the Catalyst for the Next Bull Market
The bull case for SocialFi is that its growing user base will drive mass adoption of cryptocurrency as a means of exchange and trustless collaboration, attracting new investor dollars to blockchain startups and applications.
SocialFi aims to reshape our interaction with social platforms by giving users greater control over their digital identities and interactions while ensuring privacy. Through blockchain and decentralized systems, SocialFi enables users to design and manage their own social media spaces, potentially transforming the traditional centralized model of social media. One key feature is the tokenization of a user’s social presence, allowing creators to earn tokens that reflect their influence within the community.
These tokens can be traded or exchanged for specific experiences, integrating DeFi protocols to facilitate swift and secure transactions without central intermediaries.
Traditional Web2 platforms operate on a centralized model where user data and content creation primarily drive platform profitability. Algorithms on these platforms are designed to maximize ad revenue and engagement, often at the expense of user interests.
In contrast, SocialFi prioritizes user interests and agency. Users become active contributors with a voice in platform governance through decentralized autonomous organizations (DAOs). Social tokens represent a user’s footprint on the platform, accumulating based on content reach and engagement. This decentralized approach ensures a more equitable distribution of value and control, addressing issues of digital ownership and identity through non-fungible tokens (NFTs).
SocialFi envisions a future where users shape their online experiences and benefit directly from their contributions, creating a more transparent and user-centric digital ecosystem.
Why TON is Poised to Lead SocialFi
Integration with Telegram
One of the most significant advantages of TON is its seamless integration with Telegram, a messaging app with over 900 million monthly active users. This partnership offers unparalleled distribution and user reach compared to other Layer 1 networks like Base and Solana. Every Telegram user now has access to a built-in crypto wallet, enabling effortless participation in the TON ecosystem.
Instant, Low-Fee Transactions
TON’s architecture supports high transaction throughput and minimal fees, essential for the micro-transactions typical in social interactions. With transaction costs as low as 0.005 TON (approximately 3 cents), TON rivals leading blockchains like Solana and Tron in cost efficiency. This makes it highly attractive for users and developers looking to create SocialFi applications.
USDt Jetton Discount and Global Fee Reduction
Starting April 16th 2024, transactions involving the USDt stablecoin enjoy a significant discount. The fee for the first USDt transaction has been reduced to 0.02 TON from the previous 0.032 TON, with subsequent transactions now costing 0.0145 TON. Additionally, validators have approved a proposal for a further 2.5x reduction in transaction fees. As a result, the cost for the first Jetton-with-governance transaction is now approximately $0.06, with subsequent transactions costing around $0.04, assuming 1 TON = $7. These cost reductions enhance the attractiveness of the TON network for stablecoin users, encouraging more frequent and cost-effective transactions within the SocialFi ecosystem.
Introduction of Precompiled Smart Contracts
TON developers have introduced precompiled smart contracts to the network, with the first being a jetton with governance functionality. Popular smart contracts written in C++ are now embedded directly in the node, bypassing the need for execution via the TON Virtual Machine (TVM). This adjustment reduces resource consumption and the fees associated with these contracts, further streamlining operations on the TON network. This makes the network more efficient and appealing for developers and users alike, driving innovation and adoption within the SocialFi space.
Simplified User Experience
Sending and receiving payments on TON is as easy as sending a message on Telegram. Users can buy stablecoins like USDT via card or local payments, then send them directly through the Telegram chat interface. This familiar and intuitive user experience lowers the barrier to entry, facilitating broader adoption among users who may be new to blockchain technology.
Super App Potential
The concept of a “super app,” combining social interactions, payments, and financial transactions into a single platform, is central to TON’s strategy. Inspired by the success of platforms like China’s WeChat, TON and Telegram’s synergy offers a unique and powerful platform for SocialFi.
This combination blends the convenience and reach of a super app with the security and decentralization of blockchain technology.
Empowering Users with DeFi and DAOs
TON integrates DeFi protocols to ensure swift and secure transactions without the need for central intermediaries. Additionally, decentralized autonomous organizations (DAOs) play a crucial role in the TON ecosystem, allowing users to participate in platform governance. This decentralized approach provides users with control over their digital identities and interactions, enabling creators to tokenize their social presence and earn rewards.
The integration of these elements makes TON a leading player in the SocialFi sector, driving innovation and creating a more equitable and engaging digital landscape for all users. As more people recognize the benefits of decentralized social platforms, TON is well-positioned to lead this transformation, offering users a secure, user-friendly, and empowering environment.