It’s time for finance to be integrated directly into our social platforms. On WhatsApp, for example, the ability to send money between users is only available in India and Brazil.
A core principle of SocialFi is that integrating decentralized applications (dApps) and social platforms with financial tech can unlock innovation anywhere in the world.
Combined messaging and payments platforms should be available for anyone to use, regardless of location. It also makes sense that the default currency of choice for such a universal payments platform would be the native currency of the internet: Bitcoin.
OpenChat, a blockchain-based instant-message dApp, is one example of delivering on this idea. It recently enabled the ability to send and receive ICP, the utility token of the Internet Computer blockchain on which OpenChat runs.
That’s a step toward enabling the ability to send and receive BTC on OpenChat, which will soon follow the Internet Computer’s implementation of Bitcoin smart contracts.
This would effectively put the most decentralized, transparent, and valuable cryptocurrency at the fingertips of people sending online messages — a simple concept that signals a big impact from a new wave of SocialFi dapps.
DeFi Meets Social Messaging
OpenChat’s functionality is provided by canister smart contracts, bundles of code and data that deliver interactive content over the web, with some intriguing implications.
Smart contracts are like Lego bricks. They can be combined with one another to compose a much more complex structure that is greater than the sum of its individual pieces.
“The integration possibilities are endless,” says OpenChat co-creator Matt Grogan via email.
So while instant messaging and payments for all is an appealing use case, the true magic of OpenChat is when users and developers start to combine it with other DeFi applications.
“We already have a simple bot integration,” explains Grogan. “Soon, devs will be able to create OpenChat user bots implemented as canisters to provide DeFi services. They could send ICP to a bot integrated with a DEX and receive back BTC, or send it to another to earn interest from a liquidity pool and later retrieve the tokens with a particular message.”
Along with the ability to access the world’s largest cryptocurrency, this could make DeFi and Bitcoin more accessible to users. Imagine interacting with a liquidity pool through direct messages.
Or telling your trading bot to sell BTC when it reaches a particular price. Or giving permission to a smart contract to automatically claim and compound your staking rewards. The possibilities are only limited by the imaginations of developers.
A Matter of Trust
It’s true that much of this functionality exists in some form on the messaging and community apps Telegram and Discord: users can create bots that handle or execute trades for them, and can instruct a connected wallet to send funds to an address.
But the difference is that neither Telegram nor Discord are operating on a blockchain, so they are not performing these actions within a trustless execution environment.
This ultimately comes down to the user trusting these third-party platforms, and the bots and services they’ve set up on these platforms, to be reliable and secure.
Decentralized applications built on smart contracts hold greater promise for operating openly, autonomously, and securely.
Grogan pointed out that the OpenChat team plans to tokenize the dApp and create a user DAO to govern how it evolves in the future, which centralized companies are never likely to do. SocialFi dapps of the future will be community-based and governed.
Open communication and exchange are pillars of technological productivity. When we see a rise in censorship around the world regarding content, messages, and payments, it makes sense that we would see a corresponding increase in demand for dApps like OpenChat.
SocialFi aims to facilitate communication and collaboration with financial impact. The shape that this will take in the future remains unclear.
Developers have only just begun to combine finance with decentralized social networks in an open and transparent way, but an open-source and decentralized messaging platform integrating Bitcoin would clearly demonstrate this potential.