Why Siloed Social Capital is a Failed Web2 Model

Centralized platforms extract ~30-50% of creator revenue through ads, subscriptions, and transaction fees. This rent-seeking model locks value within corporate silos, preventing creators from capturing the full economic upside of their work.

• Value Capture: Revenue share is dictated by platform policy, not market forces.
• No Portability: A creator's audience and content are owned by the platform, creating vendor lock-in.

Protocols decouple social identity and relationships from applications. A creator's followers and content are sovereign assets on a public ledger, portable across any front-end client.

• Direct Monetization: Creators can issue tokens, NFTs, or use direct payments via Superfluid streams.
• Composability: Social graphs integrate with DeFi and NFT ecosystems, enabling new revenue models like token-gated communities.

Platforms use opaque algorithms to maximize engagement for their own ad revenue, not creator-audience connection. This creates perverse incentives for clickbait and suppresses organic reach.

• Zero Transparency: Creators have no insight into distribution logic.
• Arbitrary De-platforming: A single policy change can destroy a creator's primary income source overnight.

Curators (users or DAOs) stake tokens to signal content quality, creating algorithmic transparency and aligning incentives. Projects like RSS3 and CyberConnect enable user-owned discovery layers.

• Stake-for-Voice: Influence over feed ranking is proportional to staked economic stake.
• Sybil-Resistant: Proof-of-Personhood systems (Worldcoin, BrightID) prevent spam and bot manipulation.

Uploaded content is licensed to platforms under broad terms of service. This prevents creators from composably licensing their work (e.g., for AI training, merchandise, derivatives) without platform permission.

• Non-Commercial Asset: A viral video cannot be programmatically monetized outside its native platform.
• Fragmented Identity: A creator's brand is split across Twitter, YouTube, TikTok—each a separate, non-interoperable identity.

Minting content as dynamic NFTs (like Sound.xyz for music) turns media into a programmable, tradable asset. Soulbound Tokens (SBTs) can represent verifiable, non-transferable credentials for achievements and reputation.

• Royalty Enforcement: Smart contracts guarantee perpetual royalties on secondary sales.
• Cross-Platform Reputation: A single, verifiable identity and credential system travels with the creator.

Centralized platforms monetize user-generated content and relationships via advertising and data brokerage, capturing all surplus value. The creator economy is a rent-seeking model where the platform is the primary beneficiary.

• Value Capture: Platforms like Meta and X retain ~100% of ad revenue from your audience.
• Innovation Tax: Every new feature (e.g., Reels, Spaces) is designed to increase platform engagement, not creator utility.
• Exit Barriers: Your audience and content are non-portable, creating vendor lock-in.

On-chain social protocols like Lens Protocol and Farcaster decouple social identity and connections from applications. Your graph becomes a composable primitive.

• Sovereign Assets: Users own their follower list and social history as NFTs or on-chain data.
• Composability: Any new app (e.g., a recommendation engine, a curation DAO) can permissionlessly build on top of the existing graph.
• Monetization Shift: Value accrues to the user and the protocol layer, not a single app. See Lens ecosystem apps like Orb and Phaver.

Platforms use opaque, engagement-optimizing algorithms to dictate visibility. This creates misaligned incentives where sensationalism beats substance, and creators are forced to game the system.

• Black Box Curation: You cannot audit why your content is suppressed or promoted.
• Addictive Design: Feeds are engineered for max time-on-site, not user value or truth.
• Fragmented Audiences: You must re-learn the algorithm for each platform (TikTok vs Instagram).

Decentralized social networks separate the protocol (data layer) from the client (curation/UI layer. Users can choose or build clients with different algorithms, from chronological to token-curated.

• Curation Markets: Projects like Farcaster's Frames and algorithmic feeds (e.g., Yup, Sepana) allow for competitive curation.
• Explicit Signaling: Users can stake, vote, or subscribe to signal trust, moving beyond implicit engagement metrics.
• Monetizable Curation: Curators and algorithm builders can capture value directly, aligning incentives with quality.

Centralized platforms act as judge, jury, and executioner. A change in Terms of Service, an algorithmic demotion, or a manual ban can destroy a creator's livelihood overnight with no recourse.

• Single Point of Failure: Your entire online presence depends on a corporate entity's goodwill.
• Censorship: Content moderation is non-transparent and often politically or commercially motivated.
• No Property Rights: You have zero legal claim to your digital presence or social capital on the platform.

Smart contract-based social protocols are credibly neutral infrastructure. Code is law; you cannot be deplatformed from the base layer. Reputation becomes a verifiable, persistent asset.

• Censorship Resistance: The protocol cannot discriminate against users. Moderation moves to the application layer (e.g., client-specific blocklists).
• Immutable Reputation: Contributions, endorsements, and achievements are recorded on-chain, creating portable social capital. See Proof of Personhood projects like Worldcoin and BrightID.
• Developer Certainty: Builders can innovate without fear of the platform competing with or banning their app.