Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Is Web3 Ready for Social Commerce Adoption?
Report | Jul 15, 2024
Image: Web3: A new era for social commerce (Onyx by J.P. Morgan)
Are Web 3 and Social Commerce Ready for Prime Time?
Social commerce is expected to reach over $1 trillion in 2023 and 600% increase by 2030. This growth is sparking radical change in consumer behaviour due to tech advancements but there's still a lot of friction existing on today's social media platforms that needs innovating. Enter Web3, the next phase of internet development distinguished by user ownership and decentralization, however is Web3, ready for mass acceptance in social commerce and vice versa? Dig into just published report from Onyx by J.P. Morgan called "Web3: A New Era for Social Commerce."
Traditional Social Influencers
With their large fan bases on TikTok, YouTube, Instagram, and other platforms, social influencers are becoming essential to digital marketing campaigns. However, centralized Web2 platforms play a major role in the traditional influencer model. The distribution of content, data, and revenue are all under the hands of these platforms, which limits influencer autonomy and puts them at the whim of platform algorithms. Influencers' reach is fueled by engagement metrics like likes, comments, and shares, but they can be manipulated by the platforms, giving audiences and influencers alike an uneven and occasionally untrustworthy experience.
Enter Web3's Social Tech Stack
With its blockchain roots, decentralization, openness, modularity, and interoperability, Web3 is a major advancement above Web2. Web3 gives people ownership and control over their digital identities and content, in contrast to Web2, where user data and content are controlled by centralized platforms and corporations.
- Web3 digital wallets communicate with decentralized apps (dApps) and blockchain networks. They offer a distinct public address that may be used to identify and communicate with other wallets and users. Recent developments have improved user experience by streamlining wallet setup and use.
- Web3 consumer dApps for everything from blogging and music to social networking such as Phaver, Yup, and Warpcast. By enabling users to gather and possess content, Web3 dApps promote a more customized and captivating user experience. Wider use across many apps is made possible by open social graphs (networks) like Farcaster and Lens Protocol, which promote creativity and user-centered experiences.
See: A Fintech Survival Guide to Understanding Gen Z Finance
- middleware layer that improves front-end application functionality by offering open algorithms, analytics, payments, messaging, search, identification, and data access.
- Performance and scalability are improved by combining blockchain technology with off-chain decentralized storage to handle the large number of data and transactions needed for social apps.
Web3 Social Commerce
- Through the use of smart contracts and on-chain data, Web3 social commerce incorporates blockchain technology into social media platforms to manage user-centric transactions with increased transparency. See Coinbase Commerce as an example.
- Transparent on-chain data and verifiable credentials enhance trust in Web3 social commerce. For instance, loyalty and "Proof of Store" badges lower the possibility of fraud and boosts brand and influencer confidence.
- Web3 offers personalized communication via digital identities and open social networks, which encourages customized content creation and community development. Influencers have the ability to produce unique, token-gated experiences and content that increase loyalty and engagement.
Take a look at the example below with user Emma's interaction with Web3 social commerce.
See: Strategies for Achieving Product-Market Fit in Web3
- Emma finds a new brand using her open social graph, which is a network of verified badges and reliable connections that indicate credibility.
- She relies on product reviews from loyalty badge-wearing verified users since she knows they are real people and not automated systems.
- Emma uses her verified credentials to get discounts and completes her order within the Web3 platform without ever leaving the ecosystem.
- Emma's engagement with the brand is further enhanced when she receives an invitation to join a token-gated community that offers unique content and events after making a purchase.
Is Web3 Ready for Social Commerce Adoption?
- In 2023, there was more than 4 million active Web3 wallets interacting with dApps on a daily basis, a sign of the increasing popularity of decentralized apps and ecosystems.
- Users have to pay gas fees for any on-chain activity, which can be a turnoff for some users, particularly those who are new to blockchain technology. To make these interactions simpler, innovations like smart wallets and chain abstraction are being developed.
- Web3 gives consumers control over their digital identities and data, however currently managing multiple wallets and identities is challenging. This function must be simple to use and meet privacy preferences as needed.
See: Unlocking Web3 – What Every Founder Needs to Know
- The total user base of Web3 social networks is still very small when compared to mainstream Web2 social platforms. In an attempt to draw in companies and non-Web3 users, the ecosystem is being gamified and opened up, but widespread adoption remains difficult.
Challenges to Widespread Adoption
- Because blockchains are decentralized, they frequently have problems with scalability and performance. Network congestion and expensive costs might result from social applications' high transaction volumes and massive data demand. To overcome these obstacles, hybrid systems combining off-chain and on-chain storage are being employed. It will take time to achieve the scalability and efficiency needed for widespread use.
- Web3 apps' user experiences need to be on par with or better than those of Web2 platforms. We're talking easy-to-use interfaces, smooth interactions, and low transaction friction.
- Campaigns for education and awareness are crucial to closing this knowledge gap and inspiring more users to embrace Web3 tech and experiences. Complexity needs to be decreased and myths dispelled.
Conclusion
Web3 has the potential to completely transform social commerce by offering user-centric, decentralized platforms that improve engagement, transparency, and trust.
See: Digital Identity in the Age of Web3: Empowering Individuals, Transforming Organizations
Although there are unmistakable signs of rising interest and tech progress, various obstacles need to be overcome before Web3 can be widely used for social commerce. This shift will be largely driven by ongoing innovation, user education, and efforts to make the Web3 experience simpler.
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