With over half the world now spending an average of two hours on social media platforms every day, the influence of this still embryonic sector on society has become evident.
Social media has permanently transformed the way we live and communicate. It has irrevocably changed our society and even rewired our minds, for better or worse.
SocialFi, short for Social finance, refers to the merger of social networking with blockchain finance. The SocialFi environment enables users to make cash via content production, participation in DAO governance, NFT minting, talking with other users, viewing entertainment, and gaming.
Unlike the Web 2.0 social networks, you are acquainted with, SocialFi initiatives provide greater privacy and security for users’ data, properly share advertising profits and provide a more meaningful user experience.
Social Media Companies Entering the SocialFi Space by Embracing NFTs
As the SocialFi field obtains more incredible momentum, more and more social media companies are increasing the research of NFT integration into their platform. Below is a list of firms actively integrating or researching the NFT area.
Facebook/Meta
With a projected user base of over 2.89 billion as of 2021, it comes as no surprise that Facebook reigned communication in Web 2.0. Facebook, now known as Meta, is making advances in its move towards Web 3.0. Meta’s step in establishing the world’s largest social media metaverse.
Although the photo-sharing platform hasn’t gotten aboard the NFT train yet, the company’s CEO said late last year that they are studying the NFT area in hopes of making NFTs more accessible to their user base.
In anticipation of their ambitions to incorporate cryptocurrencies into their platform, Twitter has launched a new feature that enables its Twitter Blue account users to display their NFT as their profile images on the social media network.
Not in a position to miss out on the chance to establish itself as a player in the SocialFi area, Reddit followed closely after Twitter in implementing the NFT profile image deployment.
Additionally, the social media behemoth intends to turn users’ Karma points into cryptocurrency tokens in the near future, in addition to aiming to launch an NFT marketplace.
YouTube
YouTube has been investigating non-financial transactions (NFTs) as a potential source of money for its artists as part of their attempts to grow their ecosystem.
Starting with customized NFTs sent to influencers on the YouTube platform, the company has revealed that artists could monetize the video content they make and sell it as NFTs.
A New Lighthouse of Hope
As the internet progresses toward decentralization with Web 3.0, SocialFi platforms will begin to acquire significance and will eventually become essential instruments for protecting freedom of expression and data sovereignty online.
One feature of blockchain architecture is that data that has been uploaded becomes immutable, which means that it cannot be modified or removed later.
The ability to share anything without the fear of being de-platformed or censored gives average users and content providers the ability to express themselves without restriction.
Greater transparency and the absence of intermediaries are the norms with SocialFi platforms, which aim to ensure algorithm modifications are monitored and that content producers earn a reasonable portion of income.
YouTubers have seen their earnings decline over the years due to tougher constraints. Still, systems powered by SocialFi, such as Subsocial and Deeper Network, allow content producers to monetize their works directly via their fan bases.
SocialFi is exhibiting the potential of alternative finance via the use of NFTs and tokens, while DeFi alternatives such as yield farming, lending, and other initiatives are also accessible.
Yet another essential feature of SocialFi platforms is that they let users regain control over their data, enabling them to select whether or not they want to sell their information and to whom.
These platforms not only allow users to get a percentage of advertising money, but they also allow them to choose the sorts of items and services for which they would want to see advertisements on their own.
Social Finance NFT Trends on Social Media
The Avatar Trend in NFT
It is common to see NFT Avatars on the majority of Twitter profiles. An avatar represents a user’s online persona that has been utilized for a long time in the social media sphere.
In SocialFi environments, an NFT Avatar may represent the owner’s identity in both the cryptographic world and the future metaverse, allowing them to communicate with one another.
User verification and usage of their NFT as a profile photo are now possible on Twitter Blue (and many other social media sites), among other things.
Social media (SocialFi) platforms are considered a potential cryptocurrency exchange.
Decentralized financial applications are being progressively integrated into social media platforms such as Facebook and Twitter in order to give users a next-generation personal finance environment.
The ability to transmit payments, trade tokens, participate in public offers, and more will be available to users on a single social networking platform.
Making NFTs more accessible to the masses on Social Finance
As more open-source Web 3.0 application developers emerge, such as those at the Mask Network, they are building decentralized application ecosystems that connect the existing Web 2.0 and Web 3.0 technologies.
Hopefully, this will result in additional Web 3.0 apps being added to conventional social media platforms such as Twitter and Facebook.
DApps such as the Mask extension, in addition to enhancing NFT-related content alternatives by making it more straightforward for users to identify outstanding producers, may save NFT artists and NFT fans a significant amount of time by automating several time-consuming procedures.
If, for example, content producers and NFT collectors use a single account to effortlessly travel between social media sites and search for information while shopping for NFTs, they will save time by not having to create two separate accounts, one for each network and one for the marketplace.
Why Are Social Media Giants Obsessed With NFTs
NFTs are not presently available for purchase, sale, or creation on any social networking site. On the other hand, the success of an NFT project depends on how successfully the project’s creator advertises their work on social media.
Moreover, while social media platforms passively define the future of NFTs, digital giants such as Instagram, Twitter, and Reddit view this as a chance to get more actively engaged in the area.
The majority of NFT owners feel that posting pictures of their NFTs on social media increases the value of their assets. As a result, social media firms that are crypto-compatible will have the opportunity to reach and keep new NFT-oriented clients.
Additionally, the social media businesses with the most influence in the NFT area may have an effect on the development of Web 3.0, which is based on the notion of storing user data on blockchains and is expected to be implemented in the near future.
Is SocialFi the Next Big Thing in the Internet World?
Many people feel that SocialFi is a fantastic development in the technology business and a fantastic approach to secure users’ interests in the virtual environment, especially given the trajectory of growth that the company is now on.
Despite the fact that it is still in its early phases, SocialFi has the potential to have a significant influence on the cryptocurrency, blockchain, NFT sector, and how people interact socially throughout the globe.
At this point, it is very feasible that SocialFi may become a vital component of the Metaverse ecosystem in the not-to-distant future.
Conclusion
The acronyms Facebook, Instagram, Twitter, and YouTube, have become synonymous with the word “social media,” which is likely to change soon. Blockchain technology is giving way to a new generation of social networks that have the potential to be much larger and better.
The old social models are given superpowers by these new networks based on them.
Soon, data fraud, misinformed algorithm tweaks, and unnecessarily restrictive content restriction may all become a thing of the past. This could be because community members own and operate these new social networks.
The option of social financing is also included as part of this arrangement (SocialFi). Social influence on these platforms is tokenized, and individuals who are essential personalities on these platforms may earn direct monetary rewards due to their efforts.
The growth of these new social networks and their integration with SocialFi is undoubtedly one of the most acceptable applications of blockchain technology, and it may be at the forefront of widespread adoption.
Over the past few weeks, it’s been a wild ride in the Crypto Twitter and DeFi communities. The rollercoaster started when CoinDesk disclosed that one of the co-founders of the famous Avalanche-based automated money market (AMM) Wonderland, pseudonymous “Sifu,” was Michael Patryn.
Despite Patryn’s shady past, prominent co-founder Daniele Sestagalli knew who “Sifu” was but chose to offer him a “second” chance. But, members of the Wonderland community on Twitter did not share the same sentiment as Sestagalli.
As a result, Sestagalli’s reputation has taken a significant hit in the past week. And upon further investigation into his background, things only look worse for the embattled co-founder. This leaves us with the question: What’s next for Wonderland? Before we dig into Wonderland’s future, let’s take a look at Danielle Sestagalli.
Who is Danielle Sestagalli?
Daniele Sestagalli, also known as Danielle Sesta, has extensive experience in the blockchain industry. In several interviews, he has indicated that he began using Bitcoin in 2011. The crypto world didn’t know much about him, but his Zulu Republic project impacted the crypto industry in 2018. It was one of the first airdrops, giving around $30 million to over 500,000 people. The project’s website is now defunct.
The Zulu Republic is a digital ecosystem based on the Ethereum blockchain, focused on believing that decentralized finance is the future human protocol. With an emphasis on unrivaled user experience, the objective was to make it easier for people to join the cryptocurrency revolution, empowering them to take control of their own financial lives. There have been no updates on the projects pages since 2018.
Sestagalli ‘s Linkedin profile shows that he also was an advisor to Bancor from July 2017 to September 2018. Bancor is a decentralized liquidity network that allows you to hold any blockchain asset and convert it to any other asset in the network, with no counterparty, at an automatically calculated price, using a simple web wallet.
In July 2017, Bancor completed one of the most significant token sales, raising $153 million. The project was met with a lot of hype and excitement but failed to live up to the expectations.
By the beginning of 2021, Daniele Sesta appeared busy creating a music industry model that would benefit musicians and the industry. The aim was to establish a blockchain foundation for everyone working in the music industry.
The Utopia Genesis Basis was to carry the blockchain to the music industry. The idea behind it was to empower artists by a platform that permitted them to subject their tokens without intermediaries.
However, it is not clear how much progress was made on this project as there is no website or social media presence for Utopia Genesis Basis.
But, all of a sudden, Daniele Sestagalli diverted his attention elsewhere and re-appeared with three items that changed the blockchain sector; Popsicle Finance, Abracadabra, and Wonderland entirely.
Unknown people hacked Popsicle Finance for tokens worth more than $25,000,000 at the beginning of August 2021. It was a major hack, and the price of the $ICE token crashed as a result.
Abracadabra is a DeFi yield farm that allows you to stake your cryptocurrency and earn interest on it. The protocol has been live, having over $200 million worth of value locked in it.
In September, Sestagalli founded Wonderland. According to a November interview, Sestagalli originally envisioned Wonderland as a perpetual, “mega-ICO,” giving tokens to holders over time and developing a treasury, as an Olympus fork DAO — an infamous, sky-high APY rebasing project commonly criticized as unsustainable.
Wonderland eventually overtook Olympus in market capitalization and treasury size.
The Fallout of Wonderland
In January 2022, blockchain sleuths reported “Sifu” as Michael Patryn. According to the report, Michael Patryn is allegedly a skilled serial scammer, with a sentence and deportation on his record. Patryn was the co-founder of QuadrigaCX, a failed Canadian cryptocurrency exchange.
QuadrigaCX, a crypto exchange created by Gerald Cotten and Michael Patryn in 2013, quickly grew to become one of Canada’s largest crypto exchanges by trading volume. According to sources, Cotten died in December 2018 during a trip to India, after which over $190 million in cryptocurrency owed to 115,000 consumers went missing.
Officials at QuadrigaCX claimed that only Cotten had access to the secret keys containing millions of dollars worth of client cash. However, crypto circles quickly labeled the entire incident as an exit scam.
Patryn had remained under the radar since then, until a few weeks ago, when he was discovered to be one of Wonderland’s architects.
“Sifu,” a co-founder of the Olympus, made the DeFi project, Wonderland, what it is today.
With the wonderland team’s help, including his partner Danielle Sesta, Michael Patryn (Sifu) made seed investments in the Olympus project making significant, unilateral investments. Wonderland being the fork of Olympus, overtook it in every aspect.
In particular, the wonderland co-founder, Sestagalli, popularized the idea that Frog Nation investors will someday compete with and replace “the suits,” a term that refers to established investment funds.
However, the Olympus project has come under fire in recent weeks due to the wonderland saga. There is a devastating drop in both the original project and its forks. Wonderland dropped by as much as 40% in 24 hours after Sifu’s unmasking as Patryn, tumbling as far as 95% from its all-time high.
With Patryn’s revelation, the already weak price action suffered another blow after Sestagalli stated that he had known Patryn’s identity and connections to QuadrigaCX but opted to work with him as the treasury manager nevertheless. The dynamic caused wonderland investors to lose faith in the project.
A few days later, the “frog nation” leader, Sestagalli, stated the path forward; “Do we wind down or continue to fight for the aspect of an investment DAO [decentralized autonomous organization] being a revolutionary new organization? For the option that I am for, which is to fight and replace Patryn with someone new and experienced to manage the treasury.”
The information caused a lot of commotion with community members who refer to themselves as the “Frog Nation.” Although Patryn was relieved of his duties, the question remains; what will become of Wonderland’s treasury?
What’s Next for Wonderland?
In light of the recent revelations, what will happen to Wonderland is unclear. The crypto community is up in arms, and wonderland investors doubt the wonderland treasury.
Although Danielle Sestagalli actively worked with a convicted felon, a community vote to shut down Wonderland and distribute the treasury to investors failed to pass a few days ago.
The outcome of votes may programmatically and automatically prompt actions on-chain, such as changing the code for a protocol or triggering treasury payments, depending on the decentralized autonomous organization (DAO) governance model.
Wonderland’s developers designed the protocol of DAO to protect against a single bad actor. However, in this situation, the majority of the community desires that the Wonderland team can hypothetically choose whether or not to enact.
This scenario heightened tensions in the crypto community when Sestagalli appeared to imply that Wonderland would close regardless of the outcome of the “Wind down Wonderland” vote.
A few days later, the vote concluded with 55 percent of the token weight in favor of the project moving on. Also, time token holders agreed to give the team a chance to make some changes in the project.
It was possibly the most active governance proposal in DeFi history, with over an overwhelming majority voting to continue the project, defeating a considerably smaller number of opposing addresses. Danielle Sestagalli, in turn, wrote in discord that the wonderland team was taking time to “compile suggestions, and determine the best path forward.”
The problems at Wonderland and the consequences show the fundamental flaws with the DeFi administration, which frequently relies on anonymous or pseudonymous oversight from a small number of critical people. Though smart contracts automatically execute various decisions when certain circumstances arrive, the financing of such projects is typically left in the hands of people with little checks and balances.
However, DeFi supporters should use this opportunity to reflect on how to prevent anything this egregiously audacious from happening again. Wonderland DAO agrees!
What’s Left of Danielle Sestagalli’s Name?
In the decentralized financial world, Daniele Sestagalli made a name for himself through his work. He is the brains behind three of the most successful DeFi initiatives, with a combined market worth of 6.5 billion dollars (including MIM) and a total value of 6.7 billion dollars. By market capitalization, MIM is also the 6th largest stablecoin in the Sestagalli ecosystem.
The recent news has taken away a big part of Sesta’s success. Sestagalli’s reputation has taken a significant blow, regardless of what happens to Wonderland. His noble associations with a convicted felon who faced financial crimes will not help him salvage his name.
Michael Patryn is dragging Danielle Sestagalli’s name in the mud, and it doesn’t look like it’s going to get any better from here. Can the crypto community trust Sestagalli to lead any future projects?