Web3: A new era for social commerce

Since their debut 15+ years ago, early social media platforms were designed with the primary objective to enhance and enrich human connections. These early social networks cultivated vibrant online ecosystems through social networks, the sharing economy, gaming, e-commerce, and more.

As of 2024, over 5 billion people are active on social media, presenting an opportunity for businesses to drive sales directly through social interactions. The high volume in social commerce activity can be attributed to a combination of factors, such as a pandemic-driven push for social commerce, a shift in shopping behaviors, increased social media usage, the rise of influencer-driven content, and easier payment options. Users can discover products, read reviews, interact with other shoppers, and make purchases all within their favorite social media platforms.

The social commerce user journey can be broken down into four key phases: discovery, trust, purchase, and brand affinity. 

However, the four-step journey contains numerous friction points that lead to drop outs and cart abandonment which ultimately leads to a product not being purchased.

Nearly all friction points arise from the collection, use, and sharing of data. Most of these data points pertain to aspects of a user's identity. This identity-related data includes social network behaviors, shopping preferences, trust signals, shipping addresses, banking details, and preferred modes of ongoing engagement.

Web3 is often described as the next evolution of the web, characterized by its decentralization, openness, modularity, interoperability, and blockchain foundation. The key difference between Web2 and Web3 is the ownership model – with the Web3 user in the control as opposed to centralized Web2 parties. For instance, creators in Web3 own the content they create and take it with them from one dApp (decentralized application) to another. This is a significant shift from the Web2 model whereby the underlying social network owns the content. In Web3 users have more power to own their identity, data, and other information related to them.

Web3 social networks represent a fundamental shift from current Web2 social platforms. Developers can select which building blocks across the stack to incorporate into their offerings, allowing for greater flexibility and innovation in creating decentralized applications. 

Digital identity refers to how an individual or organization is identified and represented online or in the virtual world. It includes attributes that constitute a legal identity (such as name, date of birth, etc.). These attributes are often encapsulated in the form of verifiable credentials, whereby personal data within each credential typically remains off-chain. 

However, holistic self-expression extends beyond legal names, addresses, or other similar attributes. To fully express themselves online, individuals can link their "social signals" (e.g., followers from their social graphs, digital art they have created, and their favorite blog collections). 

The concept of "Bring Your Own Identity" (BYOI) within the Web3 ecosystem, highlighting the integration of various identity components into a Web3 wallet.

Personalization is a key feature of Web3 and unlocking its full potential requires on-chain attributes. This shift fosters community building and connecting people with similar social signals and interests who might not have met otherwise.

Web3 social commerce integrates Web3 commerce functionalities within social media platforms, enables users to discover, share, build trust with brands, purchase products, and engage with brands in a more personalized and engaging manner through social interactions and community-driven content.  In the following scenario, the Onyx team illustrates the potential of Web3 social commerce and what the future capabilities may look like to help mitigate the friction points highlighted earlier on.

Within minutes, one would have discovered a new brand based on their open social graph, made a purchase without being redirected to a separate website, confidently checked out based on trust signals, joined a community, and got invited to an event. This shopping experience was not just transactional, it fostered engagement. Shoppers would be invested in their new community and continue to explore new product launches through the channel, extending their discovery journey and deepening their connection with the community.