Web2 Social Challenges

Structural Monopoly of Data and Privacy

Traditional social platforms build commercial closed loops through centralized architectures, forming a "data-traffic-advertising" monetization triangle. Social graphs, behavioral trajectories, and interest preferences generated by users on the platform are unilaterally collected by the platform, processed by algorithms, and become high-value digital assets. Taking Meta as an example, its 2022 financial report shows that advertising revenue accounts for 97.6% of total revenue, while users do not receive any direct revenue sharing.

The essence of this structural monopoly is the failure of the Coase theorem—under the assumption of zero transaction costs, data property rights should reach optimal allocation through market negotiation, but platforms forcibly separate data control rights and revenue rights through unilateral authorization in user agreements. The practice of the EU GDPR shows that even if users have data portability rights, due to data format barriers and migration costs between platforms, users still find it difficult to achieve true data sovereignty. More seriously, the Cambridge Analytica incident revealed that centralized data pools have become a breeding ground for political manipulation and commercial abuse.

Value Mismatch for Content Creators

The content ecosystem of Web2 platforms appears prosperous on the surface, but in reality, the distribution of benefits is severely imbalanced. Platforms, as traffic distributors, dominate revenue, while content creators find it difficult to obtain transparent and fair incentive returns in the black box of data algorithms.

Web2 platforms have built a "pyramid-style" value distribution system. Taking YouTube as an example, its creator share in 2023 accounts for only 55% of advertising revenue, while the platform obtains excess profits through controlling recommendation algorithms, traffic distribution, and other infrastructure. This value mismatch stems from the "chicken and egg" effect in bilateral market theory—platforms use creator content to attract users, and then reversely constrain creators through user scale. TikTok's algorithmic black box further exacerbates the head effect; according to Sensor Tower statistics, the TOP 1% of creators capture 90% of the platform's traffic revenue. More insidiously, platforms package property income that should belong to creators as platform gifts through access thresholds such as "creator funds." Such systemic exploitation has triggered a migration wave of creators, and the rise of decentralized platforms like Substack is a response to value redistribution.

This "platform predator" ecological structure limits the continuous supply of quality content and creative enthusiasm.

Lack of User Participation and Alienation

Although users are the main producers and consumers of platform content, they have weak voice in community governance and platform development. Decision-making power is highly concentrated in the platform side, creating structural alienation between users and platforms.

From the perspective of principal-agent theory, there is a fundamental divergence of interests between platforms and users. Twitter's "governance voting" experiment shows that despite 90% of users supporting the edit button feature, decisions are still subject to shareholder interests. This lack of participation has given rise to the "ghost user" phenomenon—Pew research shows that 64% of Generation Z users switch between multiple platforms but refuse to deeply participate in any community. The "board dictatorship" model of platform governance has reduced users to digital laborers; as Habermas said, communicative rationality is completely suppressed by instrumental rationality. The Reddit API fee controversy proves that when platforms unilaterally change rules, users lose even the defensive means of "voting with their feet" due to the sedimentation of social assets.

This one-way dominant model ultimately erodes user stickiness and community vitality.

Catalyzing Demand for Change

The above contradictions are essentially the fetters of Web2 production relations: platform capital monopolizes the means of production (servers/algorithms), and users only get the minimum digital living space needed for labor force reproduction. According to the Gartner technology maturity curve, in 2023, Social 3.0 has shifted from the trough of disillusionment to the slope of enlightenment, with the monthly active growth rate of decentralized social graphs such as Lens Protocol reaching 300%. The core driving forces of this transformation come from three aspects: verifiable identity (DID) implemented by blockchain, automatic value distribution guaranteed by smart contracts (such as Mirror's content NFT), and governance participation channels provided by DAOs. As demonstrated by the Web3 social protocol Farcaster, when users control data ownership (stored on their own servers), participate in rule-making (through governance tokens), and directly obtain benefits (protocol-level revenue sharing), the structural contradictions of traditional platforms will meet paradigm-level solutions.

While Web2 social has achieved phased results, it has also exposed the fundamental contradictions between its growth model and incentive mechanisms. Against this background, Web3 social, with user rights, value return, and community co-governance as its core concepts, is beginning to become a new direction for exploration.