Original Author: Anderl
Original Compilation: Saoirse, Foresight News
Over the past few years, Substack's growth has been truly impressive. What makes creators willing to stay on this platform is not what it actively does, but what it deliberately chooses not to do.
Substack doesn't clutter your page with various interaction metrics, algorithm feeds, nor does it turn every content interaction into a deliberate performance. Each time you open the interface, it's a clean, pure space for creation; you can connect with creators who share your views or hold opposing opinions, and find communities willing to engage in discussion or that you can freely ignore. In an era flooded with short-form content and increasingly fleeting lifecycles, Substack has chosen a slow lane, gradually building bonds of trust between creators and readers.
This sense of restraint is extremely rare in the vast majority of social networks today. Stepping outside the conventional perspective and looking at other platforms makes this point even clearer.
Most social platforms today feel oppressive: pages are saturated with likes, reposts, view counts, pinned replies, and various other metrics. These indicators collectively determine what content appears in your feed. The platform has already defined the entire value of content for you, leaving little room for independent user interpretation. Users gradually shift from participants to performance spectators. When platforms excessively pursue data optimization and pile on metrics, the medium itself also gradually moves towards self-consumption.
In this article, the author delves deeper into this viewpoint and provides more fitting examples. He borrows McLuhan's theory of hot and cold media to explain three things: why SocialFi collectively collapsed, why NFT culture quietly dissipated, and how those platforms that truly operate sustainably manage to strike a balance—allowing capital to enter without letting it devour the entire ecosystem.
Now, onto the main text.
In 1964, Marshall McLuhan wrote a phrase that has been quoted so often it has largely lost its original profound meaning: "The medium is the message."
Today, this statement seems like a popular slogan printed on tote bags. But if we move beyond its clichéd interpretation and treat it as a practical analytical framework, its value becomes immense. It can particularly help us understand why, in recent years, all attempts to deeply integrate social networks with finance have ultimately led to step-by-step failure.
McLuhan's actual viewpoint is more specific and profound than the stereotypical public interpretation: each medium reshapes its users, not through the content it transmits, but through the form of signals it outputs.
A medium that can convey complete, high-fidelity, mature signals shapes users into passive receivers. Conversely, one that can only convey fragmented, incomplete signals forces users to actively fill in the informational gaps. In this process, users become active participants.
McLuhan defined the former as "hot media" and the latter as "cold media."
A printed book is a hot medium—its content is already finalized; radio is a hot medium—the program is already produced; a live lecture is a hot medium—the speaker completely controls the information output.
In contrast, cold media: a phone call is a cold medium—limited by voice information, listeners need to mentally fill in the context; a comic is a cold medium—visual gaps require the viewer's brain to complete the picture details; in McLuhan's analysis, early television was also a cold medium—its low-resolution picture quality required viewers to actively reconstruct visual information. He also proposed a somewhat controversial view: this is why television is more addictive than film.
We needn't get caught up in these slightly outdated specific examples; the core logic is key: the hot or cold nature of a medium determines user behavior patterns.
Hot media fosters passive consumption; cold media fosters active participation. The most crucial point: hot and cold media cannot be forcibly transformed into one another. Once deliberately altered, the essential nature of the medium completely changes.
What does all this have to do with social networks?
Defined by McLuhan's theory: the vast majority of what we call social media today are, in essence, cold media.
A tweet, a caption-less image, a like—all are fragments of information, not complete signals in themselves. Their meaning only takes shape through others' participation—replies, shares, thread associations. A post with zero interaction holds almost no value; a post receiving two thousand replies, even if the original text remains unchanged, can develop entirely new connotations. This is the hallmark of cold media: the content itself is incomplete; its value needs to be completed and imbued with meaning through user participation and interaction.
This also determines the foundational logic of social networks: they were never mere content distribution tools but interaction engines with participation at their core, merely masquerading as content platforms.
Platforms that understood this, even without knowing McLuhan's theory, have thrived. Those that tried to professionalize participation, pushing finalized, complete content to users and turning them into passive receivers, gradually became marginalized.
Interestingly, problems arise when people try to overlay an economic/financial logic onto social platforms with cold media properties—this is the context for the emergence of SocialFi.
What did SocialFi initially aim to do?
SocialFi's vision was theoretically perfect: social capital itself holds real economic value. Users constantly create social value, yet the benefits are entirely harvested by the platforms.
If social behaviors could be directly incorporated into a market trading system, ordinary people creating value could capture their own earnings. Every follow relationship becomes an equity share, every post a tradable asset, every social connection has a clear price tag.
Theoretically, this would create a social network with its own economic system: personal reputation would have a market price; creators could capture real-time earnings from attention.
In late 2023, with the explosive popularity of Friend.tech, this logic seemed plausible. People bought and sold each other's social "keys"; initial pricing for influencer accounts reached thousands of dollars. The interface looked like a social network, but its inner workings were no different from a securities trading account.
Subsequently, a flood of similar projects emerged with largely similar playbooks: social stamps, private communities, social tokens, attention trading markets, on-chain creator economies... Business plans proliferated.
But soon, the entire sector collapsed.
Friend.tech's hype faded; subsequent copycat projects failed to gain scale; token prices plummeted with no recovery. By 2024, SocialFi had become a somewhat awkward term within the crypto space, avoided by entrepreneurs in project pitches.
The mainstream market explanation was: this was just a speculative cycle. People came for profits and left when profits vanished.
This isn't wrong, but it's superficial. Speculative cycles cannot explain why the underlying social participation completely collapsed. People didn't just stop trading keys; they stopped posting, browsing, and being active. As the financial hype receded, the social ecosystem died too.
What is the root cause?
Deconstructing the Essence with McLuhan's Theory
The deeper truth is: SocialFi's failure was never due to speculation; speculation was a symptom, not the root. From its inception, the entire sector was built upon a fatal misreading of its own medium's properties.
Social networks are inherently cold media: their value stems from users participating to complete the signal's meaning. Social behaviors are fragmented, ambiguous in meaning, and accumulate value over long-term sedimentation. SocialFi's approach was to directly replace the underlying social signal with a high-definition signal—real-time price.
The moment you attach a real-time, visible, freely tradable price tag to a follow or a post, you aren't adding an economic layer to the social medium; you are replacing the medium itself. The originally ambiguous, open-ended social behavior becomes a completely defined, unambiguous financial signal: a follow no longer carries social emotion or identification but equates to a specific dollar amount at that moment.
When the signal is fully defined, rational user behavior ceases to be participation and becomes asset allocation and profit-seeking.
This explains the essence of Friend.tech: at its core, it was never a social network, but a micro personal reputation ticker terminal dressed in a social interface. Users appeared to be posting and socializing, but were, in reality, engaging in trading games throughout. Social vocabulary was just a veneer; the core was entirely financial behavior.
Once the financial momentum reversed—prices stopped rising, arbitrage opportunities vanished, speculative returns declined—there was no underlying native social ecosystem to provide support. From the moment of its birth, the financial attribute had already consumed the social attribute.
This is precisely the outcome McLuhan's theory predicted: hot signals cannot coexist with cold media; they simply replace them.
When an ambiguous, open, participative social behavior is accompanied by a network-wide visible, real-time updated market price, the price will always dominate—because it's the most certain, least ambiguous signal on the page.
The early SocialFi designers' mistake lay in thinking they were building "underlying social + economic overlay" platforms, while in reality, they were creating "financial markets + social skin" products.
The sector's collapse wasn't due to rampant speculation but because the platforms had already quietly transformed from cold media into hot media, all the while still presenting themselves as cold-media social networks.
Beyond Crypto: This Logic Has Broader Applicability
Don't treat this merely as a post-mortem of a niche product sector. This logic has universal applicability and can explain common challenges in platform development over decades.
When cold media overheats, it tends towards demise. This isn't a metaphor but a recurring pattern of failure.
Many platforms start as low-information-density, participation-centric cold media but then continually add features that incrementally increase informational certainty: verified account badges, public full interaction data, creator funds based on view counts, precise algorithm rankings... Individually, these features might seem harmless or even improve the experience. But combined, they cause the platform to gradually drift from cold to hot.
The medium's signals become more defined, more standardized. User mentality shifts from participating in creation to performing deliberately; from obsessing over metrics to ultimately churning away—because there's no longer any white space left for users to independently interpret and co-create.
This is also why many platforms, seemingly irreplaceable at their peak, become hollow and ineffective within just a few years: they voluntarily abandoned the cold-media properties that created their value.
Twitter around 2012 was a classic cold medium; today's Twitter has long become a hot medium.
This drift in properties isn't attributable to a specific party but is the natural tendency of all data metrics, commercialization, and product optimization: the pursuit of precision, quantifiability, and efficiency inherently "heats up" a cold medium. And such media should not be overly optimized.
SocialFi, however, compressed this decades-long slow drift into an extremely rapid evolution spanning just months. It launched with the hottest signal possible—real-time market pricing—skipping the essential phase of cold-media ecosystem accumulation. Without a native social foundation, it was born as a hot medium; and a hot medium lacking a traffic moat is destined to fail quickly.
The Path Forward: Capital Condensation Points
Accepting this logic raises a question: Are social participation and capital fusion inherently doomed from the start?
The answer is no. There's a path entirely overlooked by early SocialFi: maintain the cold nature of the medium overall, allowing capital to condense and settle only at specific nodes, rather than permeating every social interaction.
This inspiration comes from a physical phenomenon: a fluid maintains its gaseous state overall, condensing into liquid droplets only under specific local conditions. Droplets are not the gas, and the gas is not altered by the droplets; they coexist. The key is controlling the location and boundaries of capital condensation.
Cold-media platforms can follow the same logic: the underlying layer maintains cold-media properties; the vast majority of social interactions remain fragmented, ambiguous in meaning, and reliant on user co-creation. Only at predetermined, specific nodes does capital condense out of the social ecosystem, forming fixed touchpoints with financial value.
The crucial point: these capital touchpoints are merely localized intensifications within the medium, not the medium itself. The rest of the ecosystem remains in its native state.
Those platforms that have quietly succeeded, far surpassing SocialFi, understand this intuitively: Substack is a cold medium for written content—content is fragmented, continuously updated, its value shaped by reader replies, shares, and citations. Capital condenses only at the subscription payment node.
A subscription is a clear hot signal—a fixed, long-term fee—but it exists as a long-term contract, not a real-time short-term trade. It doesn't pollute the entire creative ecosystem with continuous pricing. You don't see real-time tradable stock prices for individual articles; the medium remains cold, with capital looped only at the subscription stage.
Bandcamp for music platforms, Wikipedia for donations, Patreon for creator empowerment—all follow the same principle. These platforms instinctively found the capital condensation point, allowing capital orderly entry without heating the entire cold-media ecosystem. They never attempt to forcibly price every social interaction, deeply understanding one core principle: the underlying layer must retain its cold-media properties for the platform to sustainably accumulate appeal.
This is the core insight SocialFi missed. Capital and cold media are not incompatible, but they must follow rules: capital must be localized, low-frequency, appropriately non-liquid, and structurally isolated from most social interactions. It must condense at fixed points, not proliferate everywhere.
The moment you attempt to assign asset value to every daily social interaction, you effectively replace the social medium itself with a financial market. And a financial market can never give rise to the unique value of cold media—its ambiguity, sedimentation, and reliance on user co-creation.
The Future Trajectory
A new batch of projects has quietly grasped this logic. Even without explicitly mentioning the hot/cold media theory, they are following the same pattern, beginning to form stable development paradigms: their foundation is social and cultural content, with value slowly accumulating through user participation.
If one sentence could summarize the core lesson of SocialFi's collapse, it would be: Liquidity equals heat.
Injecting omnipresent liquidity into a cold medium doesn't make it more efficient; it fundamentally alters the medium's nature, causing it to lose its original core value.
The truly worthy direction for future product exploration is never "how to price every social interaction," but the more difficult and precise question: How to accurately locate the condensation points for capital without destroying the underlying cold-media ecosystem.
This sector remains almost unexplored. SocialFi was busy decomposing all social behavior into market trades, missing the crucial nuance. The next wave of projects that can achieve lasting success will inevitably be those that truly understand McLuhan, respect cold-media properties, and refrain from arbitrarily overheating the entire ecosystem.
NFTs: An Even More Illustrative Case Study
If SocialFi is a failure case of "inherently hot media disguised as cold social media," then NFTs provide an even sharper warning: they exemplify how a classic cold-media practice, sustained for centuries, can be rapidly heated and utterly destroyed in a short time.
Collecting is one of humanity's oldest cold-media behaviors. Browsing record shops, lingering in antique stores, swapping trading cards between classes, exhibiting stamp collections offline... The object itself holds only half the value; the other half stems from participant recognition, long-term accumulation, the stories behind the items, and shared resonance among enthusiasts.
The value of a collectible is inherently ambiguous, context-dependent, and subjective. This isn't a flaw; it's precisely the core charm that elevates collecting from a cultural hobby to something beyond mere transaction.
Early NFTs in 2020-2021 still retained this cold-media character: CryptoPunks were initially a niche, playful activity within crypto circles, with no clear price feeds; value stemmed from community cultural consensus, not market quotes. Early Art Blocks generative art pieces were similar.
There were dedicated forums, Discord communities where players exchanged stories, shared aesthetic insights, and co-built subculture. Collecting was pure community participation; the item's meaning needed to be collectively assigned by the community.
Then, as trading platforms matured, the process of medium "heating" accelerated dramatically, becoming an extreme industry case study: OpenSea made floor prices fully public, rarity tools quantified every trait into a numerical score, real-time charts turned every collection into a stock ticker, sniping bots eliminated human reaction time, and wash trading even became a status symbol.
Individually, these features seem like reasonable market optimizations. Combined, they pushed collecting—a cold medium—toward becoming a hot medium at a historically unprecedented speed.
The outcome perfectly aligns with McLuhan's prediction: collectors became traders, traders became bot operators, bots reduced collectible value to a single floor price number. Once prices fell, all cultural meaning and community belonging vanished instantly.
Early collector communities failed to evolve into deeper cultural circles; they dissipated as quickly as the market declined. True collectors don't leave because prices drop; they continue to engage, collect, and pursue their passion. The mass exodus post-NFT crash precisely proved there were no true collectors, only speculators disguised as enthusiasts. When the hype ended, the disguise fell away.
Compared to SocialFi, NFTs are a sharper media case study: SocialFi was a new sector, born hot, so failure could be attributed to novelty and speculation. NFTs, however, destroyed a mature cold-media practice that had survived for millennia through wars and epochal changes, unraveling its foundational logic in just thirty months.
The medium itself could have endured. It was the platforms' relentless quantification, data stacking, and real-time pricing that destroyed it. Each seemingly reasonable optimization for precision, datafication, and efficiency gradually eroded the humanistic aspect of collecting until, in the end, there was no valuable core left worth collecting.
The warning here holds significant practical meaning: The heating drift of a medium's properties isn't necessarily slow. Especially when product designers fail to understand cold-media fundamentals, a few short product cycles can completely upend an ecosystem.
Platforms can hardly resist the temptation to add new data metrics, leaderboards, real-time price feeds. Each minor upgrade seems harmless, but cumulatively, they slowly hollow out the humanistic and participatory value the platform was meant to carry.
