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InfoFi simply means Information Finance. It represents an attempt to create economic value from information by leveraging emerging technologies such as blockchain and artificial intelligence.
In Web2, large technology companies monetize user data and attention by targeting users with advertisements based on their data. These companies generate substantial profits from this model. InfoFi, however, uses blockchain technology to assign tangible value to these previously intangible assets. This is achieved by designing marketplaces where people can buy, sell, and predict information. For example, users may speculate on election outcomes, trade based on the reputation of a public figure, or monetize personal data directly without relying on intermediaries.
The concept of information finance gained mainstream attention after Ethereum co-founder Vitalik Buterin highlighted it in a 2024 blog post, where he discussed its potential to improve social media, scientific research, news distribution, governance, and other sectors.
How InfoFi Works
InfoFi systems typically operate by converting information or future outcomes into tradable assets. This model can take several forms:
Prediction Markets
Platforms such as Polymarket allow participants to purchase positions tied to the outcomes of future events, most notably elections. Prices adjust in real time based on collective expectations, effectively transforming shared knowledge into a financial instrument.
Attention Markets
Other protocols focus on measuring and monetizing attention, enabling users to speculate on the popularity or “mindshare” of creators, ideas, or narratives. When a topic gains momentum, early supporters can benefit financially, linking economic value to online relevance and virality.
Turning Data Into Money
In this model, users can choose to share certain data on the blockchain or through social activity with researchers or advertising companies in exchange for cryptocurrency rewards.
Well-Known InfoFi Projects
Polymarket: A leading decentralized prediction market where individuals can trade positions on the outcomes of real-world events.
Kaito: An AI-driven search engine built specifically for the crypto ecosystem. It aggregates fragmented data from social media platforms and governance forums, filtering valuable insights from noise while rewarding users for high-quality contributions.
Ethos: A credibility and reputation network that allows users to vouch for one another, creating a trusted web of on-chain identities. This system helps verify information sources and reduce the risk of scams across the ecosystem.
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