‘Real-World Implementations of Both AI and Web3’ Fuel AI Tokens’ Rally, Says Daniel He

With socialfi platforms, financial incentives serve not only as a reward mechanism for content creators but also “fundamentally transform the engagement model for all users,” Daniel He, the CEO of the artificial intelligence (AI)-powered socialfi platform, Republik, said. He believes that by offering incentives for user engagement beyond liking or commenting, socialfi platforms have a strong chance of converting passive users into active ones.

Using Financial Incentives to Drive User Engagement

In his written responses to Bitcoin.com News, the CEO of Republik argued that in addition to using financial incentives to drive user engagement, socialfi platforms can also enhance their long-term success in this area by cultivating a sense of community and digital identity.

When questioned about the potential of socialfi platforms to rival or even replace Web2 platforms, the CEO suggested that the current growth trajectory of the former indicates a complementary relationship. However, the CEO predicts a “gradual migration towards socialfi platforms” as user concerns about transparency and data sovereignty increase.

Regarding the AI hype, which has led to a surge in traded volumes and prices of AI-related tokens, He claimed that the “rally is based on real-world implementations of both AI and Web3 tech.” Elsewhere in his responses, He also discussed measures that socialfi platforms can take to simplify the understanding of blockchain elements or tokenomics of socialfi platforms for the average non-crypto user.

The remainder of He’s responses to all the questions posed are provided below.

Bitcoin.com News (BCN): While socialfi platforms are trying to improve the user experience, it is also a fact that many traditional users might still find them intimidating. What do you think socialfi platforms need to do to make it easier for the average non-crypto user to understand the blockchain elements and the attendant tokenomics?

Daniel He (DH): To attract and retain non-crypto users, socialfi platforms need to focus on integrating blockchain elements into familiar social media functionalities. The key lies in offering substantial flexibility in making the blockchain presence near-invisible yet still operational to non-crypto users while they reap its benefits by engaging in ways similar to Web2 experiences.

Socialfi platforms can design user interfaces and experiences with non-crypto users in mind to reduce friction. Platforms can also offer clearer value propositions that resonate with non-crypto users’ existing expectations from social media. Lastly, fostering a community support system where users can learn from each other, share tips, and offer guidance is invaluable as this peer-led approach will aid organically in education and building confidence.

Ultimately, the goal is to create an intuitive experience that feels natural to traditional users while subtly introducing them to blockchain’s benefits whenever they are ready.

BCN: Artificial intelligence (AI) token prices have been skyrocketing lately. According to crypto platform Bitget, AI tokens witnessed a 400% surge in trading volume in February. In your opinion, is this AI narrative just hype or a rally backed by a strong foundation and technological innovation?

DH: We believe that the rally around AI token projects is based on real-world implementations of both AI and Web3 tech, with AI being one of the primary narratives of this cycle. Republiks’ implementation of AI, for instance, leverages content and user behavioural analysis to determine the amount of value that a user has brought to the Republik platform, and rewards users in tokens proportionally. In collaboration with AWS’s AI and Machine Learning, Republik leverages cutting-edge innovations to bring real-world utility to the general user, driving the mass adoption of Web3.

BCN: Republik, your Web3 social platform, claims to have incorporated AI components to enhance content quality, engagement, and earnings for creators. Can you elaborate on the specific role of AI and how it contributes to a more balanced and engaging atmosphere for creators and their followers?

DH: As the world’s first AI-powered SocialFi Platform, Republik’s approach emphasizes quality interactions, prioritizing authenticity and user engagement over mere popularity through strategic AI utilization – distinguishing genuine human users from fake or bot users, and authentic-human content from animated creations.

Republik uses AI to identify real supporters of creators by analyzing the depth of interactions between creators and audiences, looking beyond surface-level indicators such as likes, comments, and followers. Our AI evaluates the likelihood of genuine interactions before analyzing user interest behavior in the creator or content type, and assesses monetization metrics including the effectiveness of creators’ monetization strategies, pattern identification in user contributions and more.

Republik’s reward system is also linked with AI establishing a self-reinforcing feedback loop that incentivizes creators to produce high-quality, authentic content. By evaluating content quality and authenticity that generates recommendations matching user preferences, creators aligning their content with these recommendations can receive significant rewards, while audiences receive rewards based on providing positive interactions, helping user base growth and supporting creators on Republik.

This symbiotic relationship fosters a community where genuine, superior content is recognized and rewarded, creating a continuous cycle that encourages evolving contributions from creators into an influential and engaging platform.

BCN: According to a Dune Analytics dashboard from Impossible Finance, there were just under 300,000 weekly active users in March 2024 across more than a dozen SocialFi platforms. By comparison, Instagram boasts over two billion users. In your opinion, how big can socialfi get?

DH: We are witnessing socialfi at its beginning in transforming how we interact online, blending social interactions with financial incentives. The current user base, while modest compared to giants like Instagram, represents just the initial wave of adopters exploring this new revolution.

The potential for growth is immense, primarily because it addresses pain points from traditional platforms like data privacy, unilateral control of platforms over monetization, or lack of tangible rewards for user-generated content. Socialfi today, is evolving to offer users ownership, different sophisticated reward structures, and levels of transparency and fairness hitherto unseen in traditional platforms.

As the technology matures and as decentralized finance becomes increasingly mainstream – socialfi becomes more user-friendly, the knowledge gap shrinks, blockchain will be less intimidating, and we’ll likely see an uptick in adoption. Another factor that could significantly influence growth is the integration or collaboration with traditional platforms to bring the best of both worlds together.

While challenging for socialfi to reach the scale of Instagram’s user base in the immediate future, there is potential to carve out a growing niche that will likely consist of users seeking more from their online interactions: more control, privacy and a fair share of the value they create.

BCN: In the social media industry, there exists a one per cent rule which assumes one per cent of users create content, while the remaining 99% merely consume it. The majority are “lurkers” who passively consume content. Do you believe that financial incentives are lucrative enough for lurkers to keep coming back to socialfi?

DH: Financial incentives in socialfi do more than just reward content creation; they fundamentally transform the engagement model for all users, including the 99% who traditionally consume content passively. Offering incentives not just for content creation but for user engagement beyond just liking, sharing, and commenting significantly increase the appeal of socialfi, making the incentives a powerful tool to convert passive lurkers into active participants.

Assuming the content and creators of interest are equally available on both Web3 and Web2 platforms, the added value derived from these incentives could indeed make socialfi platforms more attractive and encourage lurkers to frequently return for both consumption and interaction.

While financial incentives can be a key differentiator, long-term user engagement also hinges on overall user experience, including content quality, ease of interactions, and cultivation of a sense of community and digital identity. Socialfi uniquely brings users a sense of ownership and contribution to the platform’s growth and direction, which is another strong incentive for lurkers to engage beyond passive consumption. To conclude, the sustainable retention of lurkers depends on having holistic experiences that merge the intrinsic value of content and community with the extrinsic value of incentives.

BCN: Where do you see socialfi heading in the next few years? Is the industry building a sustainable ecosystem that can rival, or even replace, Web2 platforms?

DH: As we look to the near future, socialfi’s trajectory seems to be converging towards deeper integration with the broader digital economy. This will likely include stronger cross-platform synergies; enhanced digital experiences from governance, transparency, creator-community interaction models and unique revenue streams or reward structures for not just creators, but the average social media user, making socialfi a key component of the online experience.

The potential for socialfi to create a sustainable ecosystem lies in its adaptability for technological advancements and the value it provides to its users — not just as a social platform but as a comprehensive digital space that can build evolving ecosystems supporting a wide range of content creators and community builders.

The question of whether socialfi can rival or replace Web2 socials is intriguing. Rather than direct competition, socialfi’s growth trajectory suggests a complementary relationship, where users navigate between Web2 and Web3 platforms based on their needs and preferences. However, as blockchain technology becomes more ingrained in everyday digital interactions, and as concerns around transparency and data sovereignty grow, we might see a gradual migration towards socialfi platforms, especially among users seeking greater control over their online identities and the value they generate.