How Social is the Language, Tools, and Incentives to Unify Communities
How do we bring the first billion users into the unfamiliar world of Web3? It will involve more than improving UX, abstracting away technical complexities, or offering token incentives. It calls for something universal and timeless — social.
Social is a universal and Timeless need.
Social in Web3 isn’t just a feature. It goes beyond leveraging network effects to overcome the cold start problem. It’s not just fodder for engagement through user-generated content or a means for monetizing attention. It’s not cold-blooded tech growth.
In Web3, social connections are the roots that deeply nourish and sustain the vitality and resilience of communities. Here, we explore three ways social serves as a combustible accelerant for Web3 adoption: common languages, tools for building reputation, and incentives for sustained growth.
We believe that now is the time to lean into the SocialFi opportunity because the path to mass adoption lies within enhancing deeper and more meaningful social connections. With over 90% of the world’s internet users on legacy social networks, the rise of Web3 innovations present novel ways to connect people. Web3 can transform how SocialFi apps can reach, bridge trust, and enhance buyer experiences. This transition to a Web3 community-centric experience enables multi-player and multi-media connections, layering economic value on top of the traditional social graph. Recent investments, such as Farcaster’s $150 million funding round, solidify the market sentiment and ambition towards a promising distribution channel of permissionless identity, monetary flow, and social data.
We believe that SocialFi has the potential to scale exponentially, with the Web3 market segment expected to reach $23.3 billion by 2028, SocialFi will be the accelerator to reach new user channels and we have covered a thesis on the evolution of SocialFI through Kathy Tong’s market map. A strong sense of community will be the key to high user retention within Web3 is the key element that binds and sustains social connections. Social dynamics influence user behavior significantly, and leveraging these can result in higher user engagement, retention, and overall platform success.
1/3 Language: The Verbs and Nouns of Communities
Language is what distinguishes Homo sapiens from other species. Today, the importance of language in unifying Web3 communities is just as crucial.
Consider social as the modern-day campfire where we gather to share stories, ideas, and memes. Language is a process of open creation, into which communities can freely express themselves. Language begets new ideas, brings people together, and establishes norms for behaviors. Whether it is the elders of Ethereum Foundation, OGs of CryptoPunks, or the young upshot in Pump.fun, these communities all have localized jargons, memes, and narratives to reinforce group identity and to socialize concepts, usually before code commits. After all, words do spread faster than tech.
Think of social as a linguistic bridge that brings together diverse Web3 communities. It helps us share beliefs and sync up our actions, making sure we’re all on the same page. This shared language is key when we’re doing things like pooling investments, market making, or organizing gaming guilds. By weaving social threads into Web3, we don’t just boost communication—we also strengthen the ties that bind communities together.
2/3 Tools: Measuring and Exchanging Communal Trust
Web3 is meant to be trustless, yet paradoxically, we find ourselves relying more than ever on social consensus. That’s because in Web3, identity comes in many forms—from anonymous hashed wallet addresses to pseudonymous ENS names, all the way to fully verified real identities through KYC. So, social connections actually become a key tool in this trustless environment, helping us measure and manage trust and reputation across the community. They give us the transparency and metrics we need to make sure everyone is playing by the rules and contributing to our collective success.
The trustless systems of Web3 encompass more than the technical mechanics of smart contracts or consensus algorithms; they also require a comprehensive set of tools for the measuring and exchanging of communal trust. Dynamic social engagements—such as managing identities and relationships, assessing contributions and influence, and facilitating collaboration—are fundamental to powering these systems.
These connections build what we call social capital, integrating trustless tech with innate human sociability. This blend is critical to the ethos of Web3, where code may dictate operations, but it is the complex network of social connections that truly unites the community.
Taking the example of trustless voting mechanisms like on-chain voting with Snapshot or token-based quadratic voting, it's clear that the effectiveness of these systems needs a rich set of social signals to contextualize the data.
As trust becomes the currency of communities, quantified and managed through social connections. Having transparent and reliable tools to capture, measure, and exchange individual trust and collective reputation is crucial for activities like SocialFi, peer-to-peer lending, and governance.
3/3 Incentives: Playbook to Reach Game Theory Optimal
Charlie Munger remarked, “Show me the incentives and I’ll show you the outcome.” In Web3, setting up incentives is a whole lot more than just airdropping tokens or unlocking special perks. It’s about creating a socio-economic network where every interaction adds both financial and social value.
The challenge, however, isn’t just creating incentives; it’s managing them effectively. As Web3 experiences a surge of new projects, all stakeholders—including founders, developers, and investors — are navigating a complex web of overlapping or conflicting interests. Many are turning to well-known platforms like GitHub and LinkedIn not just to make sure everything’s distributed fairly and contributions are legit, but also to get people involved in community activities and even conduct proof-of-humanity tests on Telegram, Discord and Twitter.
Then there’s the whole thing about social status—it’s a massive driver. People often make choices based not only on what nets them the most cash but also on how these choices will boost their reputation within a community. Like a business leader might go for a strategy that makes them look good to their peers, even if it’s not the most lucrative path right off the bat. This focus on building social capital can really change the game, making those cooperative strategies a lot more appealing because they foster stronger relationships and promise better gains in the long run.
Timeless' approach can win because they have an innovative approach with initial product market fit and a superstar team poised to exceed execution expectations. Timeless X leads the social wallet space, attracting over 1.5 million cumulative users since the March 14, 2024 launch with Linea and the May 21, 2024 launch with Taiko. They saw a 49% Q/Q growth rate. They have a capital efficient growth strategy with top Layer 2 blockchains and have over 17 active launch partners in the pipeline, representing over $43 billion in Total Value Locked. This enabled us to generate profitable unit economic growth, with negative customer acquisition costs (CAC), activating over 600,000 wallets and generating $980k in fees..The Social Capital Protocol, a novel concept, challenges the current social graph landscape by calculating and tokenizing the value of a person’s social network, transforming it into financial capital. With social capital, users are able to achieve upward economic mobility and we believe this concept has the potential to disrupt the world just as the Internet did.
The leadership team, led by Zi Wang and Hochung Nam, has a deep understanding of the social space and possesses the technical and leadership skills necessary to build out the Social Capital Protocol effectively. They are product-focused and have a proven track record, having shipped successful projects within Web3 and worked on high-stakes products at Google.
By understanding social incentives, we can better predict user behavior and craft strategies that are both profitable and beneficial to the community. In networked environments like SocialFi and marketplaces, social cooperation leads to broader Web3 adoption. This approach leverages the innate human need for connection, trust, and recognition, creating a more inclusive and resilient Web3 ecosystem. By focusing on social dynamics, we enhance user engagement and build strong, interconnected communities that drive sustainable growth.
Conclusion
At 35 years old, the enduring spirit of the open social web lives on. Web3 social is the progeny of Tim Berners-Lee's hope for the World Wide Web as a universally accessible, interconnected space, to make connections, build relationships, and unlock economic opportunities for billions.
Social is indispensable for Web3 adoption because it provides the language that fosters communication and collaboration, the tools to measure trust and reputation, and the incentives that drive durable growth, reputation, and the incentives that drive durable growth.
Timeless is building social primitives for Web3, envisioning a world where social capital functions like financial capital, compounding and growing through each interaction. The company launched Timeless X, a social wallet platform, already serving millions of users. Currently, Timeless is developing the Social Capital Protocol, aiming to implement it on an ultra-low-cost Layer 3, optimized for our SocialFi applications. That’s the future we’re building—one where social engagement drives upward mobility.
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