Uweb famous teacher's cutting-edge course 83rd issue: How Farcaster, the new code in the social track, makes money. The following is the interactive highlights of Uweb President Yu Jianing and Farcaster OG 0xLuo @0xLuo , Enjoy:

1. Farcaster is a decentralized social protocol with open data and rich ecosystem. Its main client is Warpcast

Farcaster is a decentralized social protocol founded by former Coinbase employees Dan Romero and Varun Srinivasan. Their company, called Merkle Manufactory, completed a $30 million financing led by A16Z in 2022 and a $150 million financing led by Paradigm in May this year, making Farcaster one of the top projects in the Crypto field, with a financing scale that is rarely matched in the field.

Farcaster's founder has a background in Coinbase, and its initial user base consisted of core Silicon Valley VCs and developers, including members of Coinbase Ventures and A16Z; Vitalik Buterin joined in November 2022, attracting a large number of Ethereum Foundation members. Initially, Farcaster had only 10,000 to 20,000 users, with 1,000 to 2,000 daily active users, but its user base was very core and professional.

The main feature of Farcaster is its decentralized protocol properties, which is in stark contrast to the centralized application Twitter. Farcaster's identity data is stored on the blockchain (OP chain), while the content data is stored in a distributed database (Hub). This means that Farcaster's data is public and anyone can read it and build their own applications based on it. In contrast, all Twitter's data is stored on its servers.

Many applications have been built around the Farcaster protocol. Its main client is Warpcast. In addition, there are various other clients and ecological applications, including short videos, audio live broadcasts similar to Twitter Space, video live broadcasts, etc. These applications together constitute the basic framework of the Farcaster ecosystem.

2. Farcaster is in the social media field, and Base is in the public chain field. The two complement each other outside the ecosystem and together promote the development of the entire Coinbase ecosystem.

Although Farcaster is a project on the OP chain, it is closely related to the Base chain because the Farcaster community prefers the Base chain to issue coins or NFTs. The main reason is that the founders of Farcaster and Base both have Coinbase backgrounds, which makes users more inclined to choose the familiar Base chain.

Although not all Farcaster projects are on the Base chain, most of the projects on the Base chain operate communities on Farcaster. As a social media, Farcaster provides a platform for promotion, operation and cold start of projects on the Base chain. Farcaster and Base Chain have formed an ecological complementary relationship. Farcaster serves as a social media and Base Chain serves as an asset publishing platform. Both of them jointly promote the growth of users and TVL. In the first half of this year, both Farcaster users and Base chain TVL experienced significant growth, with TVL on Base reaching a peak of $8 billion. Among them, the memecoin Degen on Farcaster played an important role, leading other projects to follow suit and issue assets on the Base chain. Degen was once the largest memecoin on Farcaster with a maximum market value of 2 billion.

3. If the US crypto policy is relaxed, it will be good for Coinbase; whether Trump is elected or not, the crypto outlook is optimistic

If the United States becomes more crypto-friendly, it will be very beneficial to local Crypto companies, especially Coinbase. As the most important and first listed crypto company in the United States, Coinbase will benefit from it. Many big Vs on Farcaster and American cryptocurrency circles also support Trump.

Although it is still unknown whether Trump will be elected, the situation under the Democratic Party is not that bad. Both Bitcoin and Ethereum ETFs were approved during Biden's term.

Judging from Coinbase's approach, it will promote encryption technology to penetrate deeper into daily life in the future. A more relaxed encryption policy is undoubtedly beneficial to it, but as a compliant encryption company, it will also adapt to the supervision of the SEC.

4. Ethereum and its L2 actively embrace Farcaster; Solana and Bitcoin have great difficulty in joining Farcaster, and there are relatively few projects

The Ethereum ecosystem, including Ethereum itself and its L2, will actively embrace Farcaster. There is a function on Farcaster called Frame, which is similar to Solana's Blink applet and supports chains such as ETH, Polygon, Base, Zora, OP, Arbitrum, and Degen. Developers on these chains have already started operating projects on Farcaster, and more projects are expected to join in the future.

In comparison, Bitcoin and Solana are more difficult to join. Solana’s launch of Blink shows that its main social battlefield is Twitter, and its strategic focus is clear. Earlier this year, Bitcoin launched some projects on Farcaster, but the subsequent operations were not followed up, mainly due to the relationship between the founders’ circles.

Solana and Base are already in competition with each other, with little user overlap between the two, and even less overlap with Bitcoin. Therefore, it is foreseeable that Ethereum and its L2 will increasingly operate on Farcaster, while Solana and Bitcoin ecosystem projects will be relatively few.

5. Farcaster has sufficient funds, active users, low-cost content data storage, and good future development prospects

Farcaster currently has about 600,000 users, with about 50,000 to 60,000 daily active users, including some robots. There are about 4,000 active users on the platform who have been awarded power badges, and the actual number of active users should be between 4,000 and 50,000.

Farcaster operates by charging storage fees. Each user who registers and sends a message must pay a fee of $5 for data storage. It has currently generated revenue of approximately $2 million. User data is stored on the OP chain at no additional cost; content data is stored in a distributed database (Hub) similar to IPFS. Each node currently requires less than 200GB of storage, and the cost is relatively low. The main expenditure is personnel expenses. Thanks to a large amount of financing, Farcaster has sufficient operating funds to continue to develop for several years.

6. Farcaster and Base Chain have not issued any tokens, focusing on user growth

The founder of Farcaster has repeatedly stated that he will not issue coins. He opposes the model of issuing coins by social protocols and believes that it is difficult to maintain long-term by incentivizing user participation through tokens. Past social projects such as DeSo issued protocol tokens, but as the token price fell, user benefits decreased, and users lost, forming a vicious cycle. Farcaster chose to maintain operating costs by charging storage fees rather than relying on tokens to incentivize users. Farcaster's main goal is to increase the number of users and daily active users, rather than profit. The founder focuses on polishing products, optimizing protocols and clients, and improving user experience to attract more users. Profits will be considered after the user base reaches a certain scale.

The Base chain also does not issue coins, probably due to compliance and other factors. The ecological logic of the Base chain is to achieve profitability by charging service fees by increasing the number of users and transaction volume. As long as the public chain has a large number of users and a large transaction volume, it can maintain profitability by charging gas fees. The Base chain attracts users through various activities, such as the launch of Onchain Summer, and the founder Jessie embraced memecoin and bought a large number of memecoins to attract users. Application investors on Base, such as Paradigm, a16z, Multicoin and other well-known investment institutions, are willing to spend time polishing products to attract users, rather than short-term speculation. The common goal is to make the Base chain gradually prosperous and achieve long-term profitability.

7. Farcaster's income comes from early deep participation and airdrop rewards; Base takes over the overflow traffic of Solana, but it is still in its early stages and has great potential in the future

Base and Farcaster have similar logic, most of the users are real, and it takes time to experience them in depth. The early users on Farcaster were mainly VCs and developers. Early participants eventually received airdrop rewards by publishing Degen-related content, being active in the community, and receiving rewards, although some users also earned income by directly purchasing memecoin.

On the Base chain, memecoin is currently the mainstream. Especially in March and April, many users who speculated on memecoin on Solana turned to Base. However, some infrastructure and DeFi projects on Base have not yet been fully developed, and the real potential has not yet been realized. Currently, Base is still in a very early stage, and there may be many opportunities in the future.

8.Base chain has fallen recently, DeFi project Aerodrome has performed steadily, and there are development opportunities for blockchain games in the future

There are fewer market opportunities in the past few months, and the market is mainly showing a downward trend. However, some projects on Base have performed relatively stably. For example, Aerodrome, Base's largest DeFi project, is supported by the Base Foundation and uses a Dex with a ve(3,3) model similar to Velodrome on the OP chain, which has contributed a lot to Base's TVL. As a public chain, infrastructure such as Dex is very critical. Currently, only this Dex project on Base has performed relatively well. Other DeFi projects on Base have not yet risen, but if Base ushers in a bull market, these DeFi projects, especially leading projects, are expected to make breakthroughs. The future trend of memecoin on Base is difficult to predict.

In addition, you can pay attention to some blockchain games and Onchain Gaming projects on Base. In addition to many SocialFi projects, there are many small games on Base, such as EthXY and Fren Pet. These projects have good VC investment backgrounds and a certain user base, and may have development opportunities in the future.

9. Miggles incident became popular by chance, Jessie's purchase drove the rally, but the speculative risk was high

The Miggles incident stems from Coinbase's recently launched "Onchain Summer" event, which is similar to the Odyssey event and aims to recommend users to participate in NFT projects on Base and use its smart wallet products. An NFT called Mister Miggles cat was launched in the event, and users were encouraged to create secondary works around it.

After Coinbase released the second full video of the cat, clearly stating that the cat’s name is Mister Miggles, the coin named Miggles began to surge. The next morning, Jessie, the head of the Base chain, bought the coin, pushing its price up further.

Jessie's purchase does not represent official endorsement. He will buy most of the memecoins on Base. Usually, these coins will have a wave of growth after he buys them, but it is difficult to last. Such opportunities are accidental and risky. Buying these coins needs to be sold out in time. Most of the dog coins that Jessie bought have fallen a lot. There are many cat-related memecoins on the Base chain, such as Mochi, Toshi, and MOG. This time, another cat became popular by chance.

10. Pump.fun simplifies the issuance of meme coins and relies on the PVP model; the meme coins on Farcaster have specific scenarios and applications, but it is difficult to maintain them in the long term

Pump.fun and memecoin on Farcaster are two different types of cryptocurrencies. Pump.fun is a purely emotional memecoin, while memecoin on Farcaster, known as scene memecoin, has specific usage scenarios, mainly for rewarding and other social activities.

Memecoins on Farcaster are usually designed with airdrop rules. For example, Degen is airdropped through user posts and reward points. Degen also has multiple application scenarios, such as being used as an internal transaction currency and a payment method for NFT mint platforms. This makes Degen have certain liquidity and application scenarios on Farcaster.

Pump.fun greatly simplifies the issuance process of meme coins, and can issue tens of thousands of memecoins every day. This is an extreme PVP model that makes profits through transaction fees. The high risk and short cycle make it popular because of the large number of users on Solana.

Although Farcaster has attracted a large number of users through Degen, the number of users is still small compared to memecoin on Solana. Although Farcaster's memecoin token is designed for a long-term model, liquidity and changing distribution rules affect its stability. Many memecoins also face the risk of falling after the initial rise, so it is very important to stop profit in time.

11. Farcaster is suitable for English users. Developers can easily get attention by publishing projects and have the opportunity to become KOLs.

Farcaster is not very friendly to Chinese users: there are relatively few Chinese users on the platform, with about 40,000 to 50,000 daily active users, of which there are probably less than 1,000 Chinese users, and even fewer active users. Therefore, using English on Farcaster can better integrate into the community culture.

If you are good at English, can integrate into the community culture, and have valuable content, such as doing investment research or sharing interesting things, you still have a chance to get attention on Farcaster. But the fastest way is to publish a project on the platform as a developer, which can quickly attract a lot of attention. Farcaster's open social graph provides a good foundation for developers, and many developers are building various ecological applications on Farcaster. Some users quickly attracted a lot of attention by publishing projects such as mini-games, which is a feasible path to becoming a KOL.

12. Social aggregators can access different platforms at the same time. The future development prospects of such platforms are worth paying attention to.

Social aggregator websites are a promising direction. In addition to Farcaster, there are also social protocols such as Lens. Some social aggregators can access these different platforms at the same time, such as Firefly, which is a social aggregator application under Mask Network.

One of the reasons why Firefly is becoming more and more important is that different social platforms have on-chain interactive mini-program specifications. Social aggregators such as Firefly can not only access content from different platforms such as Farcaster, Lens and Twitter, but also conduct on-chain interactions on different social platforms at the same time. Especially after Solana launched Blink, Twitter has also become an on-chain interactive platform, but it can only be used through the desktop, and you need to install a wallet plug-in to access it, and the mobile terminal does not yet support it. In addition, Firefly can also support Lens's Open Action and Farcaster's Frame. As the entrance to different social platforms, social aggregators support on-chain interactions. When different social platforms launch their own on-chain interactive mini-program specifications, the value of aggregators will become more apparent. Firefly supports binding Twitter, Farcaster and Lens accounts, and can provide one-stop services.

Website recommendation:

  1. https://firefly.social/

  2. https://decaster.xyz/

*This article is for learning and sharing purposes only and does not constitute any investment advice.