Today Onyx by JP Morgan released a report on web3 for social commerce. Social commerce is valued at over $1 trillion with 600% growth expected by 2030. It explores how web3 could address some pain points in the social shopping journey.
Looking at stats elsewhere, social shipping is clearly booming with Facebook taking the lion’s share. Another report shows over a billion people visit Facebook Marketplace monthly, as much as 40% of Facebook’s monthly active user base of 3 billion.
Even more notable, 491 million visit Facebook purely for Facebook Marketplace. The New York Times recently wrote about Generation Z shoppers who otherwise use Instagram and TikTok for social media, but visit Facebook Marketplace rather than eBay or Craigs List.
Meanwhile, Onyx divides the social shopping journey into four phases: discovery, trust, purchase and brand affinity. There’s no question that the shopping cart experience is painful with the need to re-enter data for each store. It would be wonderful to use a privacy preserving web3 wallet.
In terms of brand affinity, web3 is a dream. Today brands struggle to get a full view of customer behaviors across different channels. By offering rewards for engagement, blockchain with its transparency can enable brands to get a more complete view of their customers. This potentially includes visibility of customer engagement with other brands as well, and all the privacy implications.
Web3 and the social graph
The Onyx report delves into some of the social protocols and dApps available to the crypto community. Protocols such as Lens envisage decentralizing the social media experience. They provide building blocks for social media apps and users control their own data.
Farcaster is a newer competitor to Lens. Browsing Dune Analytics, there’s an amazing amount of detail about how users engage with the protocols and also earn money.
However, Onyx might be a little generous in saying they are gaining traction with the web3 community, given its still early days. Each protocol attracts roughly 60,000 active daily users. Farcaster reached that figure pretty quickly, but the level of interactions dropped in June.
While Onyx talks about privacy in the context of identity apps, it doesn’t delve into the privacy or lack thereof in these social protocols. Lens puts all social interactions on chain. So while users may have control over their data, it’s available for anybody else to view.
Farcaster keeps more of it offline and is less decentralized, but it’s easy to browser key data such as profiles and usernames. Looking at the lists, many people use their real names, which are now forever linked to their wallet address. Reddit users openly discussed privacy issues.
It wouldn’t be crypto if one didn’t discuss dollars. One neat aspect is instead of the social media giants having average revenue per user (ARPU), in the web3 world the ARPU belongs to the users. According to Dune Analytics, the top 10% of revenue earning users earned an ARPU of $2,433 annualized.
Circling back to JP Morgan, a key reason for its interest in this area is it developed a self sovereign identity (SSI) software that it’s keen to see used for commerce, payments and Web3 wallets – the Onyx Digital Identity Open-Sourced SSI SDK.
