While the concept of SocialFi is powerful and the concept has immense potential, there are significant challenges that have emerged in existing platforms, and sustainable SocialFi execution currently suffer from several issues:
No real value
Users earn tokens for shallow actions like likes or shares, but they don't see real-world benefits or meaningful rewards.
Tokens earned for shallow actions lack real-world value or rewards.
Limited utility and disconnect from tangible benefits
Most SocialFi platforms reward users with tokens for simple actions—likes, shares, or comments—but these actions rarely translate into real-world value. There’s no deeper utility attached to these tokens, leaving participants with rewards that don’t incentivise them to stick around long-term.
Once the speculative buzz fades, so does user engagement.
Users may earn tokens, but they don’t translate to meaningful benefits or investment opportunities.
In a space driven by financial opportunities, the absence of tangible value from SocialFi platforms means users are left holding tokens with no real benefits beyond the momentary hype.
Short-term speculation
Much of the focus in SocialFi is on short-term speculation, rather than fostering sustainable, long-term participation.
SocialFi is driven by hype and FOMO, lacking long-term commitment or investment in the project's success.
Focus on hype and FOMO creates no long-term participation.
Speculative nature of token participation
SocialFi today largely fuels short-term speculation. Participants buy tokens hoping for quick profits, driven by FOMO rather than real conviction in a project’s long-term success. This pattern fails to nurture any lasting user involvement.
Once the price starts to drop or new opportunities emerge elsewhere, the engagement drops off entirely.
This is a critical problem for SocialFi projects needing sustained, long-term community backing.
Unrewarded hype drivers
Community members who create buzz and boost engagement get little to no reward for their contributions, despite being key to a project's growth.
Hype creators receive little to no reward for boosting project engagement.
Misalignment between user contributions and rewards
A fundamental driver of success in Web3 is community engagement. The most successful projects rely on active community members who create content, generate hype, and spread awareness.
But SocialFi platforms today haven’t captured this value exchange. The people who drive projects’ visibility and engagement—the hype builders—don’t see any meaningful reward for their efforts. They give a lot to projects but don’t receive much in return.
This has created a one-sided engagement model where contributors aren't properly incentivised to continue supporting the project after the initial hype dies down.
Shallow communities
Shallow, transactional communities dissolve once rewards stop.
Dying engagement leaves projects with no lasting, loyal user base.
Communities fall apart once rewards run out, dwindling adoption of token utility.
Lack of long-term community building
Current SocialFi platforms tend to create transactional communities, where the relationship between users and projects is based on temporary financial incentives rather than genuine connection.
These shallow interactions rarely evolve into lasting communities. When rewards dry up, so does participation.
This leaves projects with no strong, loyal community base to carry them forward after their IDO.
For more on how AdLunam is solving these problems: