Blockchain-based social media is one of the most promising yet underutilized niches within the crypto industry. Faced with competition from Web 2.0 social giants like Facebook, X, Reddit and Instagram, SocialFi (Social Finance) and other blockchain-based social media networks have maintained a low profile during the decade-plus social media revolution. Recent developments in the niche, however, have led to growing interest in the decentralized social media concept. Among the old-time leaders of this promising category is Steem, a blockchain platform built purposely for decentralized social applications.
Steem (STEEM) is a blockchain platform designed specifically for decentralized social media applications.
Its largest and best-known app is Steemit, a microblogging social network that helps users earn crypto rewards by posting content and upvoting/liking it.
Launched in 2016, Steem is the oldest among the leading decentralized social media platforms. Its primary native coin, STEEM, is the fourth-largest SocialFi cryptocurrency by market cap.
What Is Steem Blockchain?
Steem is a blockchain designed to host and power the growth of decentralized social media apps. Developers can build and launch Steem-based decentralized applications (DApps) that help users monetize their social content. Steem accounts can earn crypto rewards by producing content and even by upvoting (i.e., “liking”) it.
Steem offers near-instant transaction processing and features zero gas fees. The fee-free nature of the platform is designed to encourage greater involvement of social media users, both on the consumer and content developer sides. Steem was launched in 2016 and is the oldest among the leading decentralized social platforms.
Steem Network: How Does It Work?
The Steem blockchain is based on a variation of the proof of stake (PoS) transaction validation model, delegated proof of stake (DPoS), whereby users who stake funds on the platform delegate block validation responsibility to a select number of nodes. Staking rewards generated by the validation process are allocated to the Steem rewards pool, a key feature used in the blockchain’s functional mechanism.
Steem Crypto Rewards Pool
The platform’s rewards pool is central to the idea of rewarding social media users for their activity. Only 10% of the staking rewards in the pool are given to block validators, called Witnesses on Steem. In contrast, on most other blockchains, validators receive all or at least a significant proportion of the rewards.
Nearly two-thirds of the staking rewards (65%) go to social media users who engage in on-platform activity. Half of this amount (32.5%) is allotted to Authors, users who produce and publish content on Steem-based DApps. The other 32.5% is set aside for Curators, who upvote content produced by Authors.
Another 15% of the reward pool’s funds go to the holders of the SP token, which we’ll cover in a later section. In essence, this token gives additional upvoting power to its holders.
Finally, the remaining 10% is reserved for the Steem Proposals System, which is used via the Steem DAO to facilitate governance voting for various platform improvements and changes.
Smart Media Tokens (SMTs)
Smart Media Tokens (SMTs) are custom tokens that developers and content producers will be able to issue on Steem to power their specific apps or communities. Steem’s primary native coin is STEEM; we’ll cover more on this cryptocurrency later on. While STEEM can be used to enable most transactions on the network, SMTs can act as application-specific or community-specific assets. This is similar to the manner in which Ether (ETH) and DApp-specificERC-20 tokens coexist on the Ethereum blockchain.
While ETH, akin to STEEM, powers overall network activity, individual ERC-20 tokens, much like SMT tokens, serve as the main currencies within respective DApps.
SMTs are still at the stage of conceptual proposal and have yet to be implemented on Steem.
Who Can Benefit From Steem?
Developers
Blockchain developers with a focus in the social media domain are major beneficiaries of Steem’s functional model. The platform gives them the ability to develop DApps with built-in revenue-sharing models. Since Authors and Curators earn crypto rewards from their activity, a share of the revenue generated goes to the DApp developer, based on a preprogrammed distribution model.
Steem also makes DApp development easy thanks to the supported popular programming languages, as Steem DApps can be programmed using JavaScript and Python, two of the most widely used languages in the world of software development.
Social Users
For ordinary social media users who don’t boast extensive armies of followers, Steem is a true gem: in addition to producing your own content, you can earn crypto rewards simply by upvoting. On the vast majority of other social media platforms, monetization opportunities are primarily limited to influencers who boast thousands or even millions of followers.
Entrepreneurs
Entrepreneurs can also leverage Steem to grow their social communities and monetize content. Steem’s monetization scheme, which offers rewards for followers and not merely for influencers or content producers, fosters more active user base participation within Steem communities. A more engaged user base spells better opportunities to grow your brand via social media community management.
Monetizing your content is a breeze on Steem. While many brands often have to run paid ads on other social media networks to promote their content, Steem pays you crypto rewards for quality content.
What Is Steemit?
Steemit is Steem blockchain’s primary social media DApp. It’s a blogging-style platform that publishers can use to monetize their content as it gets upvoted and rises in the rankings. Being the first and most popular app on the platform, Steemit is often confused with the Steem blockchain itself.
At some point, Steemit grew to be the SocialFi world’s most popular app. However, over the past few years, its popularity has declined somewhat. The arrival of new decentralized social platforms, including the recent surge of platforms like friend.tech, New Bitcoin City and Stars Arena, has turned SocialFi into a much more competitive space.
Despite coming off its past popularity highs, Steemit remains one of the most prominent blockchain-based social media DApps, enjoying exceptionally high usage rates in South Korea.
Other Steem DApps
eSteem
eSteem (formerly Steem Mobile) is another long-timer on the Steem network. Launched in 2016, eSteem is a mobile app that lets users post content in the form of blogs and messages, and monetize it via Steem’s typical upvoting mechanism. While Steemit’s focus is on the desktop environment, eSteem is adapted toward mobile-friendly content and interaction.
DTube
DTube is Steem’s primary video content platform. Users can post video content and upvote other users’ content to earn crypto rewards. DTube’s overall functionality and user interface are near replicas of YouTube, the video giant of the Web 2.0 social media world. However, since DTube is blockchain-based, it has significant underlying differences from its much larger rival.
For starters, censorship on DTube is dependent upon its users' votes, while YouTube has been accused of some heavy-handed ideological censorship. Moreover, DTube has no ads, since no corporate entity owns the platform. In contrast, YouTube’s owner, Google Inc., is ubiquitously known for its voracious ad dollars appetite.
Utopian.io
Utopian.io is a Steem DApp that lets software developers earn crypto rewards by contributing to an open-source project. Developers can contribute to open-source projects listed on Utopian.io by improving code, fixing bugs, creating useful libraries and more. What Steemit is to bloggers and DTube is to video publishers, Utopian.io is to software development enthusiasts.
Steem Monsters
Steem Monsters is a trading card game with elements of an RPG (role-playing game). As of early November 2023, the game is in development. Many of the in-game assets in Steem Monsters are based on NFTs. So far, this is the only Steem DApp, either launched or in development, that uses the NFT concept.
Steem Network Cryptocurrencies
The Steem blockchain is powered by three cryptocurrencies: STEEM, Steem Power (SP) and Steem Dollar (SBD).
STEEM
As already noted, STEEM is the platform’s main cryptocurrency and can be traded on exchanges. Users earn STEEM via content publishing and upvoting.
Besides acting as the platform’s main content monetization coin, STEEM is also used for staking. In order to participate in the block validation process, users need to stake their funds in STEEM, and staking rewards are also generated in STEEM. However, the actual rewards paid out from the Steem rewards pool for participating in content creation and curation involve two other crypto tokens, Steem Power (SP) and Steem Dollar (SBD).
STEEM is currently the fourth-largest cryptocurrency by market cap within the SocialFi category.
Steem Power (SP)
Steem Power (SP) is a crypto token that can be used to increase your voting power on the Steem platform. It cannot be traded directly on exchanges. However, you can swap SP for STEEM, and vice versa.
The votes of SP token holders carry greater weight than the votes of other users on the blockchain. The more SP tokens you hold, the higher your upvoting weight. For instance, when an SP token holder upvotes a post on Steemit, the content piece has a higher chance of climbing in the overall rankings, which translates to higher visibility on the platform. The post’s author also receives more STEEM rewards because of the valuable vote from an SP holder.
Steem Power holders also receive 15% of the annual STEEM block rewards, another incentive engineered to encourage users to purchase these tokens.
Steem Dollar (SBD)
Steem Dollar (SBD) is a tradable stablecoin pegged to the U.S. dollar at a 1:1 ratio. While the market value of the STEEM coin fluctuates, SBD’s supply mechanism ensures that the USD peg is tightly maintained. This is achieved via a combination of STEEM and SBD printing and burning when the peg starts to deviate from the 1:1 ratio. As such, SBD is a classic example of an algorithmically maintained stablecoin. SBD is designed for Steem users who prefer a high degree of stability for the crypto assets they maintain on the platform.
Reward Allocations
The STEEM reward system for creators and curators may seem a tad confusing, so we’ll break it down here. Although STEEM is used as a common unit to calculate rewards on the platform, the actual crypto rewards are disbursed to users in a combination of SP and SBD. Users can choose to receive their rewards in one of two ways, either 50% in SP/50% in SBD or 100% in SP. It should be noted that STEEM operates an internal swap market where all three cryptos — STEEM, SP and SBD — can be traded with each other. Thus, after receiving your SP and SBD rewards, you can transfer them into the asset of your choice.
Closing Thoughts
Steem’s blockchain-based network has unique features that let you earn crypto rewards through content publishing and upvoting. Such features are largely absent on other social media platforms. This reality has helped Steem survive the numerous crypto winters and market downturns since the platform was launched back in 2016.
The STEEM coin has been thoroughly time-tested and remains the fourth-largest cryptocurrency in the SocialFi niche. The proposed Smart Media Tokens have the potential to further solidify the platform’s standing within the niche. When social media users start looking for alternatives to the large Web 2.0 networks, Steem is — and very likely will remain — one of the first platforms they’ll consider. Without exaggeration, Steem is web3’s X, YouTube and Reddit, all in one.