Reimagining social media with web3: insights from Money20/20
Money20/20 delved into how self-sovereign digital identities could transform social media platforms and spawn cross-platform revenue opportunities, heralding a new age of ownership and control for users in a wide ranging session attended by Stani Kulechov, the founder and CEO of Aave.
During the global fintech event, Money20/20, Stani Kulechov, the founder and CEO of Aave (AAVE), engaged in an eye-opening conversation about the future of the creator economy and social media within the framework of web3.
Web2 brought people, businesses, and information together like never before. Yet, Kulechov points out that the advent of web3 heralds a new era, starting with a robust financial layer underpinning it.
We are transitioning from platforms where a central authority controls everything to a decentralized universe that promotes peer-to-peer transactions and programmable finance. And, crucially, these decentralized frameworks, like blockchain, are community-driven.
A fascinating aspect of this evolution is the notion of user ownership. With blockchain, the notion of “owning” one’s online presence gains a new meaning. It brings the possibility of owning our profiles and the audiences we create and also reaping the benefits thereof.
Taking web3 beyond the buzzword offers a tangible path to actual ownership of your data. As Kulechov points out, the creator economy pivots on ownership and control. It empowers creators to leverage their work and audience, making the most out of the built-in monetization tools that web3 offers.
Web3: a democratic future
Web3 promises a more democratic internet, where businesses continue to provide platforms and services, but the end users also significantly benefit from the technology.
However, the concept of “democratic” in this context can be ambiguous, given the diverse interpretations of the term in the crypto and decentralized finance (DeFi) landscapes.
Kulechov envisions a scenario where users, or “liquid citizens,” can choose the level of democracy in their digital communities, from leader-led decentralized organizations (DAOs) to anarchic leaderless ones.
However, the transition from web2 to web3 is not without challenges. Web3 needs to match the vast network effects and user experience of web2 social media platforms.
This requires a cultural shift among developers. The focus should be on the users and their needs rather than the protocols. Building for consumers and developing consumer-centric angles is the key to this transition.
Successful web3 apps should emphasize community values and provide high-quality user experiences. They should facilitate seamless transitions between platforms without requiring users to recreate profiles or audiences.
In totality, this interconnectedness and data availability can be crucial for these platforms’ long-term viability and user stickiness.
Addressing content and GDPR concerns in web3
The transition to web3 raises questions about data permanence, GDPR compliance, and how to handle the right to be forgotten.
While blockchain’s immutable nature may seem incompatible with these concepts, Kulechov highlights the role of blockchain in securing users’ profiles and follower bases.
The Aave team is strategically exploring how data availability — an essential element of blockchain — can address content and data control issues.
For example, they’ve developed a scaling solution called Momoka that utilizes data availability and verification. Momoka is a layer-3 network protocol designed for decentralized applications (dApps).
Unlike layer-2 networks, it doesn’t compress data. Instead, it focuses on handling transactions through a data availability layer, which securely stores transaction data for easy access by network nodes. This approach has the potential to improve the efficiency and user experience of dApps leveraging the Momoka protocol.
Aave team is also researching ways to give content creators control over their content, including the ability to remove it. This approach could provide an effective response to regulatory concerns and censorship.
Mitigating censorship issues
Web3’s decentralized nature allows for self-sovereign communication channels between creators and their audience. However, the impact of censorship may depend on the niche layer, that is, the application algorithms controlling content exposure and discoverability.
Kulechov stresses the importance of available algorithms that are not just open source but also publicly available. This transparency may drive more discussions around the design of algorithms and allow users to choose which ones they want to use.
Meanwhile, there’s a concern that social capital, like other forms, could further exacerbate existing inequalities. Kulechov agrees that technology — blockchain, AI, or others — can swing both ways, depending on the implementation details and regulatory frameworks in place.
He believes an open design space, facilitated by web3, could lead to healthier algorithms and systems. When users are given more flexibility and choice, they can lean towards systems that best serve their interests, leading to a more equitable internet.
The road ahead
The transition from web2 to web3 holds transformative potential for social media. The blockchain revolution goes beyond redefining financial systems – it can shape our online communications, interactions, and value creation.
But the evolution to a decentralized, user-centric, self-sovereign internet isn’t devoid of challenges. Striking a balance between user ownership, data control, and regulatory compliance demands innovative solutions and careful consideration.
Nevertheless, with ongoing advancements, a more democratic, equitable, and user-controlled internet appears within reach.