Attention monetization is among the most profitable ventures in today's attention economy, with advertisements being the industry standard. While ads have been the golden standard, there's room for creative thinking. Here’s an idea: an app that lets you trade virtual cards representing your favorite personalities, where you can speculate on their engagement and cash in on their success.
Since these apps are not exactly decentralized social (DeSo) or social finance (SocialFi), I am calling them "gamified metasocial apps," GaMAs, to differentiate. GaMAs have key differences that help avoid direct competition with incumbent social apps while optimizing their growth potential. I’ll first review the current state of DeSo/SocialFi and their limitations, and then I'll get into GaMAs and their potential.
State of Decentralized Social Media
The idea of decentralized social media has been around for some time. Apps like Steemit in 2016 and BitClout in 2021 were sensations in their time, and now the community loves to rave about Farcaster. These apps add distinctive features such as revenue sharing, speculation coins, and unique embedding, which is why they saw some initial success. However, it is unlikely that DeSo will be widely adopted in its current form. These apps fight uphill battles against industry giants and don’t properly utilize the edge building in Web3 presents.
Social media platforms have strong network effects, and many are now sharing profits with creators, further solidifying their networks. Getting top creators to post regularly on a new, unproven app is challenging, even if it has novel features. And if you get them to, incumbents will likely copy anything that proves popular.
For DeSo apps to succeed, they must deliver unique, crypto-enabled features that the community values and major platforms can't easily replicate. Projects like Farcaster will remain niche despite their popularity in the crypto community because their unique features, like Farcaster's Frames and community channels, can be replicated by social media giants and thus lack a proper edge.
Regulation Arbitrage
Crypto-based social apps still have great potential but must play to their strengths to have a chance. The key lies in tokenization, which apps can use to enable speculation. Because of regulatory concerns, major social media players are unlikely to adopt this. That said, crypto-social apps must implement tokenization tastefully, meaning thinking long-term from the start and maximizing sustained entertainment; engagement from speculation alone can be fleeting.
BitClout and Friendtech are good examples of this. These apps enable speculation via a token but have not maintained engagement. BitClout introduced creator coins, which reflect the value of individual creators by allowing users to trade them. While this is entertaining, more was needed to surmount existing apps’ network effects as creator coins did not sustain long-term user engagements, evident by the app's dwindling user base.
Friendtech added more depth by tokenizing chat room access, where people can share valuable information to increase their token's value. However, this feature only provides value when engaged users populate the chat rooms, and since a chat room is effectively another social app to manage, most chat rooms are now silent. Friendtech's user data shows this: the 70,000 daily active users post-launch have dwindled to around 1,000 more recently.
The takeaway is that unique features are not enough; decentralized social applications must also focus on synergizing with existing social apps and maximizing the utility made possible by decentralization. In other words, they need to use tokenization in a fun and engaging way and not just put messaging on a new app where you can gamble. Fantasy is one app that strikes this balance; it's a social trading card game in which cards are characters from crypto Twitter.
Fantasy
Fantasy relies on more complex tokens than Friendtech and BitClout to make the speculation element more fun. As an alternative to simple tokens, Fantasy uses trading card NFTs to represent cryptocurrency influencers and track their engagement on X. You can mint these cards, referred to as heroes, by purchasing and opening card packs. Fantasy is a game comparable to fantasy sports but with influencers instead of athletes.
The game's main mechanic is the tournament system. Competitors enter tournaments with their strongest five-hero squad and compete for prizes like ETH and card packs. As hero stats change, users trade them to make the best possible squads. Influencers who opt into the Fantasy community receive 1.5 percent of the trading volume of their heroes.
Overall, Fantasy's incentives are well-designed. The most significant difference between Fantasy and previous apps is that the underlying social network benefits from Fantasy's success. The whole game revolves around engagement on X, so players want to see their heroes gain more engagement, and influencers want to drive more activity to their X profiles. Fantasy develops a growing user base and active participation in the game, while X benefits from the increased engagement. Everyone involved gains from this self-sufficient cycle of development and participation.
The pre-launch figures demonstrate the community's trust in Fantasy's strategy. With $65 million in deposits from 20,000 depositors, Fantasy has surpassed Friendtech's $35 million in deposits. Similar coins, such as Friendtech's FRIEND and Farcaster's DEGEN, have attained multibillion-dollar valuations, indicating that the market wants more applications of this kind. Because Fantasy has set itself apart from other genres, new GaMAs will likely emerge and proliferate.
The Potential of GaMAs
Fantasy represents a new application genre by building game mechanics on top of existing social platforms. These apps can revolutionize how users engage with creators and value their favorite social networks. For the first time, users can profit by speculating on the success of creators in a gamified way.
GaMAs will expand beyond a single community on a single platform to engage diverse communities across multiple networks. Initial expansions will likely be to adjacent communities, like the finance and sports betting communities. Gaming and music communities are additional communities to target since creators are highly valued. These communities are generally less willing to spend, so GaMAs targeting them will need to implement exciting game mechanics and integrate with platforms such as YouTube, Spotify, and Twitch will be required.
One infrastructure idea is to create a platform that empowers users to create and customize GaMAs for their communities. Something like this, which provides a user-friendly game creation interface while seamlessly integrating with existing apps, can result in an explosion of innovative game mechanics, increasing the genre’s chance of viral success.
There will also be challenges, the most clear being high startup costs and regulatory concerns. To reduce the costs of entry for users, GaMAs can add:
leagues with lower prices
a free-to-play mode
As for regulation, these apps should incorporate a DAO structure, especially since they can benefit from studying the more mature DeFi ecosystem. Another concern is bots gaming engagement. While this is a serious concern, its already one that major platform face. Additionally, the Fantasy team is also working to filter bot engagement using their own anti-botting system. It will be interesting to see whether accelerating the problem with incentives will result in better botting solutions.
Conclusion
GaMAs are novel applications that can change how users and creators interact by allowing users to have skin in the social media game, much like how fantasy sports and sports betting enable fans to have a more engaged relationship with sports. By gamifying speculation and building on top of pre-existing social networks, metasocial apps can overcome the limitations of traditional decentralized social apps. Apps like Fantasy have the potential to revolutionize attention monetization and become crypto's killer app.