Understanding the media temperature is essential to grasping the cyclical nature of NFT and SocialFi.

Written by: Anderl

Translated by: Saoirse, Foresight News

In recent years, the development of Substack has indeed been surprising. What truly keeps creators willing to stay on this platform is not what it actively does, but rather what it deliberately chooses not to do.

Substack does not fill your page with various interaction data, algorithmic feeds, nor does it turn every content interaction into a deliberate performance. Every time you open the interface, it is a clean and pure creation space; you can meet creators with similar or differing viewpoints and find communities willing to engage or those you can choose to ignore. In today's era, where short content is rampant and its lifecycle is getting increasingly shorter, Substack has chosen a slower path, gradually building trust connections between creators and readers.

This sense of restraint is extremely rare among the vast majority of social networks today. If you step outside the conventional perspective and look at other platforms, you will find this point clearer.

Most current social platforms feel oppressive: pages are filled with likes, shares, view counts, pinned replies, and various data. These metrics collectively determine the content you can see in your information feed. The platform has already defined the entirety of the content's value for you, leaving little room for user interpretation. Users have slowly transformed from participants into audience members. When a platform excessively pursues data optimization and piles up metrics, the medium itself also gradually leads to self-consumption.

In this article, the author elaborates on this viewpoint and provides more relevant examples. He borrows McLuhan's hot and cool media theory to explain three things: why SocialFi collapses collectively, why NFT culture quietly dissipates, and how those platforms that can truly operate for the long term manage to find the right balance—allowing capital to enter without letting capital devour the entire ecosystem.

Next, we move on to the main text.

In 1964, McLuhan wrote a famous quote that has been repeatedly cited to the point of losing its original depth: the medium is the message.

Today this phrase seems to have become a popular slogan printed on literary canvas bags, but if we cast aside the slogan-like interpretation and treat it as a practical analytical logic, we will find its great value, especially in helping us understand: why all attempts in recent years to deeply integrate social networks with finance have ultimately led to gradual failures.

McLuhan's true perspective is more specific and profound than the interpretations found in popular stereotypes: each medium reshapes its users, and this change is not about the content conveyed by the medium itself but about the form of signals it outputs.

A medium that can transmit complete, highly cohesive mature signals will shape users into passive receivers; whereas a medium that can only transmit fragmented, incomplete signals will compel users to actively fill in information gaps, transforming them into active participants in the process.

McLuhan defines the former as hot media and the latter as cool media.

Printed materials are hot media—a book page’s content is already complete; broadcasts are hot media—program content is already produced; offline lectures are hot media—the speaker fully controls the information output.

In contrast, cool media: a phone call is cool media—limited by voice information, the listener needs to fill in the context independently; a cartoon is cool media—the visuals are left blank, and the viewer's brain needs to complete the details; in McLuhan's analysis, early television also belonged to cool media—early visual resolution was very low, requiring audiences to continuously reconstruct the visual information actively. He also proposed a controversial viewpoint: this is why television is more addictive than movies.

We need not get stuck on those slightly outdated specific examples; the core logic is key: the hot or cool properties of a medium determine user behavior patterns.

Hot media breeds passive consumption, while cool media breeds active participation. The most critical point: hot and cool media cannot forcibly transition into one another; once intentionally altered, the essence of the medium will be fundamentally changed.

What does all this have to do with social networks?

Using McLuhan's theory to define: what we now refer to as the vast majority of social media is essentially cool media.

A tweet, an out-of-context image, a like—these are all fragmented information, none of which is a complete signal in itself. Their meaning can only take shape through the participation, responses, shares, and threaded conversations of others. A post with zero interactions is almost entirely valueless; while a post receiving two thousand replies, even if the original text remains unchanged, will derive a whole new meaning. This is a typical characteristic of cool media: the content itself is incomplete, its value needs to be completed and given meaning through user participation and interaction.

This also determines the underlying logic of social networks: they have never been mere content distribution tools but are interactive engines centered around a sense of participation, merely appearing as content platforms on the surface.

Those platforms that understand this point have thrived, even if they have never come into contact with McLuhan's theories; while those that attempt to professionalize the sense of participation, push users to receive fixed complete content, and turn users into passive receivers have gradually become marginalized.

Interestingly, when people attempt to overlay an economic financial logic onto social platforms characterized by cool media, problems arise—this is also the background for the emergence of SocialFi.

What did SocialFi initially aim to do?

The vision of SocialFi is theoretically perfect: social capital inherently possesses real economic value, and users continuously create social value, yet all the profits are harvested by the platform.

If social behavior could be directly integrated into a market trading system, ordinary individuals who create value would be able to capture their own rewards. Every relationship of attention turns into equity shares, every post becomes a tradable asset, and every social connection has a clear price tag.

Theoretically, this would form a social network with a self-sufficient economic system: personal reputations have market prices, and creators can receive real-time benefits from attention.

By the end of 2023, with the explosion of Friend.tech, this logic appeared to be viable. People began buying and selling social keys, with the initial pricing of influencer accounts reaching thousands of dollars; the interface looks like a social network, but its operations are indistinguishable from those of a securities trading account.

Subsequently, a plethora of similar projects emerged, with gameplay largely overlapping: social stamps, private communities, social tokens, attention trading markets, on-chain creator economies... various business plans flooded in.

However, the entire track soon collapsed.

As the heat of Friend.tech waned, no subsequent following projects managed to achieve scale; token prices plummeted and showed no signs of recovery. By 2024, SocialFi had become an awkward term within the community, which entrepreneurs were reluctant to mention in new project pitches.

The mainstream market explanation is that this was just a speculative cycle, where people came in to profit, but left when there were no gains to be had.

This explanation is not incorrect but is too superficial. The speculative cycle cannot explain why the underlying social participation would completely collapse: people didn't just stop trading keys, they stopped posting, stopped browsing, and stopped being active participants. As financial fervor diminished, the social ecosystem also completely vanished.

What lies at the root of this?

Analyzing the essence with McLuhan's theory

The deeper truth is that the failure of SocialFi was never due to speculation; speculation is merely a surface issue, not the root cause. The entire track, from its inception, was built on a fatal misunderstanding of its own media properties.

Social networks are inherently cool media: their value originates from users participating in completing signal meanings, social behavior is fragmented and ambiguous, accumulating value over time. Yet what SocialFi did was directly replace the original underlying signals of social interactions with highly deterministic signals—real-time pricing.

Once you label a behavior of following someone or a post with a real-time visible, freely tradable price tag, you have not added an economic property to the social medium but have directly replaced the medium itself. Originally vague and open social behavior becomes a completely predefined financial signal with no room for interpretation: a follow no longer contains emotional or communal recognition but simply equates to a specific dollar price at the moment.

When signals are thoroughly defined, users' rational behavior shifts from participating in interactions to asset allocation and profit-seeking.

This also explains the essence of Friend.tech: it is fundamentally not a social network but a mini personal reputation trading terminal wrapped in a social interface. Users appear to be posting socially, but they are actually engaging in trading games the entire time. Social terminology serves merely as a disguise, while the core is entirely financial behavior.

Once the financial market turns—prices stop rising, arbitrage opportunities disappear, and speculative returns decline—there is no underlying social ecosystem to support it. From the moment of its inception, the financial properties have consumed the social properties.

This is the outcome that McLuhan's theory had long predicted: hot signals cannot coexist with cool media; they will simply replace one another.

When an ambiguous, open, and participation-requiring social behavior is simultaneously attached to a market price that is visible across the entire network and updated in real-time, the price will always dominate—because it is the most certain and unequivocal signal on the page.

The misunderstanding of early SocialFi designers was that they believed they were creating a platform of "underlying social + upper-level economy," while in fact, they were building a product of "financial market + social guise."

The collapse of the track was not due to rampant speculation but rather because the platform had quietly transformed from cool media into hot media while still claiming to be a social network with cool media properties.

This logic is applicable beyond the crypto space

Do not view this solely as a review of a niche product track; this logic possesses universality and can explain the common dilemmas faced by platforms over the decades.

Once cool media overheats excessively, it will lead to extinction; this is not a metaphor but a repeatedly demonstrated pattern of failure.

Many platforms initially begin as low information density cool media centered around participation, but they continually layer various functions, step by step increasing information certainty: verified account identifiers, public interaction data, creator funds settled by view counts, precise algorithm rankings... these functions, viewed independently, do no harm and can even enhance the experience, but when combined, they slowly cause the platform to drift from cool to hot.

Media signals become increasingly defined and standardized, user mindsets shift from participating in creation to deliberate performance; transitioning from an obsession with data metrics to eventual total loss—because there is no longer space left for users to interpret and participate in creation independently.

This is also the reason why many seemingly irreplaceable platforms at their peak become hollow and ineffective within just a few years: they abandon the cool media properties that create their value.

Twitter around 2012 was a typical example of cool media; today's Twitter has already become hot media.

This shift in attributes does not have a specific person to blame but is a natural trend in all data metrics, commercialization, and product optimization: the pursuit of precision, quantification, and high efficiency inherently raises the temperature of cool media, which should not be excessively optimized.

SocialFi compressed this decades-long gradual drift into a rapid transformation lasting only a few months. From its inception, it was equipped with the hottest signal—real-time market pricing—skipping over the necessary stage of cool media ecosystem accumulation. Lacking the support of inherent social foundations, it is inherently hot media; and a hot medium without a traffic moat is destined to perish rapidly.

Path to resolution: Capital condensation points

If we accept this logic, a question arises: Is social participation and capital integration doomed to fail from the beginning?

The answer is no. There exists a path that early SocialFi completely overlooked: preserving the overall cool properties of the medium and allowing capital to condense and accumulate only at specific points, rather than permeating every social behavior.

This inspiration comes from a physical phenomenon: fluid remains in a gaseous state overall but condenses into droplets only under specific localized conditions. Droplets are not equivalent to gas, and gas does not change due to droplets; their coexistence hinges on controlling the location and boundaries of capital condensation.

Cool media platforms can follow the same logic: the overall foundation retains cool media properties, the vast majority of social behaviors remain fragmented and ambiguous, relying on user participation and co-creation; capital only condenses at pre-set specific points, forming fixed touchpoints with financial value within the social ecosystem.

The key is that these capital touchpoints are merely localized reinforcements within the medium, not the medium itself, and the rest of the ecosystem remains in its original state.

Those who quietly run successful models, far outpacing SocialFi, keenly understand this principle: Substack is a cool medium for text creation, with fragmented content and continuous updates, where value relies on reader replies, shares, and citations for completion; capital only condenses at the subscription payment node.

Subscription is a clear hot signal, fixed long-term cost, but it exists in the form of a long-term contract rather than real-time short-term trading, preventing continuous pricing from contaminating the entire creative ecosystem. You do not see the real-time tradable stock price of a single article; the medium retains cool properties with capital only looping back at the subscription stage.

Bandcamp for music platforms, Wikipedia for public donations, and Patreon for empowering creators follow the same principle. These platforms adeptly pinpoint the capital condensation points, allowing capital to enter in an orderly manner without overheating the entire cool medium ecosystem; they never impose forced pricing on every single social behavior, understanding a core principle: the foundation must retain cool media properties for the platform to sustainably attract interest.

This is the core insight lost by SocialFi. Capital and cool media are not incompatible, but must adhere to rules: capital should be localized, low-frequency, and moderately illiquid, maintaining structural isolation from the vast majority of social behaviors. It can only condense at specific points and must not flood the entire scope.

Once you attempt to ascribe asset value to every everyday social behavior, it is equivalent to completely replacing the social medium itself with the financial market. And the financial market can never generate the unique value reflected through ambiguous retention, accumulation, and reliance on user participation in co-creation inherent in cool media.

Future directions

A batch of new projects has already quietly grasped this logic, even if they do not explicitly mention McLuhan's hot and cool media theory, they follow the same rules and begin to form stable development paradigms: rooted in social and cultural content at the core, value slowly accumulates through user participation.

If we were to summarize the core lesson from the collapse of SocialFi in a single sentence, it would be: liquidity equals heat.

Injecting full liquidity into cool media will not make it more efficient; it will only entirely change the essence of the medium, causing it to lose its original core value.

The product directions truly worthy of exploration in the future have never been "how to price every social behavior" but rather a more challenging and precise proposition: how to accurately locate the condensation of capital without damaging the underlying ecosystem of cool media.

This domain remains largely unexplored to date. SocialFi has been busy breaking down every social behavior into market transactions while neglecting the most critical balance. The next round of projects that can genuinely find success for the long term will undoubtedly be those who truly understand McLuhan, respect the attributes of cool media, and do not indiscriminately overheat the ecosystem.

NFT: A more typical case of evidence

If SocialFi is a failed sample of "an inherently hot medium masquerading as a social cool medium," then NFT offers a deeper warning: it witnessed how a classic cool medium play, developed over hundreds of years, could be rapidly heated and utterly destroyed in a short time.

Collecting is one of humanity's oldest cool media behaviors. Visiting vinyl record shops, lingering in antique stores, exchanging cards during breaks, offline exhibitions of stamp collections... the items themselves carry only half their value; the other half comes from human participation and recognition, years of slow accumulation, the stories behind the collection, and the resonances among enthusiasts.

The value of collectibles is inherently vague, context-dependent, and varies from person to person. This is not a flaw, but rather the core charm that shifts collecting from cultural hobby into pure trade.

From 2020 to early 2021, early NFTs retained this cool media characteristic: CryptoPunks was initially just a niche playful concept within the crypto circle, with no explicit price trend; its value stemmed from community cultural consensus rather than market quotations; early Art Blocks' artwork similarly.

At that time, there were exclusive forums, Discord communities where players exchanged stories about their collectibles, shared aesthetic insights, and collaboratively built community culture; collecting was purely an engaged activity within a circle, and the meaning of the collections required communal contribution.

However, as trading platforms gradually matured, the process of warming up the medium accelerated dramatically, reaching an extreme enough to become an industry classic: OpenSea made all floor prices public, rarity tools quantified each characteristic into a numerical score, real-time market graphs made every collection resemble stock indices, trading bots erased human reaction delays, washing trading volume became a symbol of identity.

Viewed independently, these features are reasonable market optimizations; but together, they have pushed collection—a cool medium—into hot media at a historically rapid pace.

The outcome completely aligns with McLuhan's predictions: collectors transformed into traders, traders devolved into bot operators, and bots simplified the value of collectibles into a singular floor price figure. Once prices fell, all cultural connotations and community belonging vanished.

The early collectible communities did not solidify into deeper cultural circles, but rather dissipated instantly as the market conditions declined. True collectors do not leave the scene because of falling prices; they continue to communicate, collect, and delve into their hobbies; while the community's exodus post-NFT collapse precisely proves that there were no genuine collectors—only speculators masquerading as players. When the market curtain fell, so did their pretense.

Compared to SocialFi, NFTs represent a more acute media case: SocialFi is a new track, inherently taking the hot media path, and its failure can still be attributed to the novelty of the field and rampant speculation; while NFTs destroyed a set of mature cool media practices inherited over thousands of years, which survived wars and the test of time, all crumbled within just thirty months.

The medium itself could have operated for a long time, yet it was the platform's endless quantitative optimization, data stacking, and real-time pricing that destroyed it. Every seemingly reasonable optimization towards precision, data, and efficiency gradually eroded the humanistic attributes of collecting until finally, no core value worth collecting remained.

The warning behind this is highly relevant: the warming shift of media properties is not necessarily a slow process; especially when product designers do not understand the underlying logic of cool media, it can disrupt the ecosystem within just a few product cycles.

Platforms can always struggle to resist the temptation of adding new data metrics, leaderboards, and real-time price quotes; every slight upgrade seems harmless, but cumulatively, they gradually hollow out the humanistic and participatory values platforms are meant to uphold.