Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of the crypto.news editorial team.
The era of direct-to-consumer sales has arrived in every aspect of the game. The $250 billion creative economy It is not immune to this change either.
Traditional social media platforms have long acted as gatekeepers to revenue streams, limiting the ways in which creators, their followers and modest advertisers interact with each other.
After seeing multiple web2-based iterations that failed to balance these three pillars, it would seem that the future is rightfully leaning toward web3 to democratize social networking.
Empowering creators, users and advertisers
According to a report According to Mordor Intelligence, the impact of blockchain on the media, advertising, and entertainment market is expected to rise to $27.29 billion by 2029, at a compound annual growth rate (CAGR) of 78.49%. This transformation, which we are witnessing firsthand, has been made possible by the emergence of decentralized integrations, which eliminate the middleman and lay the foundation for a new era of creativity, engagement, and trust.
Offering solutions to outdated problems such as digital piracy, unequal distribution of royalties and monopoly of user data, blockchain technology is increasingly being used to redefine human interactions. This starts with empowering creators, without whom these platforms become just another community chat center.
By thinking beyond brand interactions, SocialFi platforms are helping to create a model where loyal, paying communities underpin creative livelihood. While current solutions focus only on the creator, the other two legs of the system – users and advertisers – can no longer be ignored.
This is where a tokenized ecosystem comes in. By allowing creators to earn profits directly through audience engagement and rewarding each user for their digital footprint, the next phase of SocialFi should create mutually rewarding processes for everyone involved. Not only does this approach democratize earnings to ensure creators are fairly compensated, but it also drives user engagement by combining the interests of creators and their audiences.
In addition, advertisers who are part of this ecosystem have greater control over their spending, managing to interact better with the entire spectrum of users and thus projecting better returns on their investment.
nft for digital ownership
A few years ago, nfts came out in force, but soon died down as the hype overshadowed their real-world applications in the tokenization of digital assets. That said, the sector continues to see healthy funding as investors bet on their applications in industries such as art, real estate, photography, music, and social content – in essence, a connection to RWA.
We are increasingly seeing that it is not enough to simply create decentralized content. There needs to be a way to stamp your intellectual property on it and monetize it forever. In this sense, nfts allow creators to have true ownership with the added prospects of merchandising and recurring revenue.
Another point to note is the emergence of short-form visual content as the most popular form of content on the internet today. Despite its popularity, copyright violations and lack of credits to creators ignore the efforts of digital participants. By offering genuine scope for visual content to be instantly converted into nfts, SocialFi platforms can add a layer of transparency and monetization, which has previously been untapped.
Despite that inherent potential, blockchain integration into the media industry is not without its challenges. Issues such as scalability and interoperability are not new, and much depends on emerging low-code solutions that enable developers to create scalable L2s more effectively and at lower cost.
Several networks, such as Sui, for example, provide a robust on-chain development environment and equip platforms with high throughput, a crucial factor in media applications that demand high transaction speeds for an optimal user experience.
Building on-chain platforms also ensures that decentralized and conventional fintech tools can connect to a common ecosystem. Not to mention preserving intellectual property and preventing cyberattacks by managing such on-chain platforms. All of these factors are especially helpful for seamless real-time payments, including micropayments, which traditional fiat-based transfers cannot cater to due to high transaction costs.
The complexity of web3 interfaces may be their biggest impediment for now, but with newer platforms incorporating the familiarity of web2 with the flexibility of DeFi, the opportunity to bridge two different worlds has never been more attainable.
