Original author: Haotian
What do you think of Paradigm leading the investment in the decentralized social protocol @farcaster_xyz? I believe many people will have questions: 1) Is the $1 billion valuation in the A round expensive? 2) What is the difference between it and social protocols such as Nostr and Lens? 3) What is the technical architecture principle behind it? 4) What opportunities will it bring to the Social sector? Next, let me briefly talk about my understanding:
1) Although many high FDV and low circulation tokens have been controversial recently, there is a voice saying that VCs have contributed to the existence of such vampire projects that "peak as soon as they go online". Without commenting on other projects, let's take Farcaster as an example. Is it expensive to raise $150 million in round A financing with a valuation of $1 billion? I don't think it is expensive.
Because Farcster is not just a protocol limited to the web3 field, it has the potential to rush to Web2 to solve the privacy protection and data ownership of social platforms, especially the problem of advertising information flooding. From the perspective of the web2 valuation system, it is not expensive at all. Most of those projects with high FDV but bleak reality are due to the huge contrast between established expectations and realized value. In my opinion, the expected value currently shown by Farcaster can support the 1 B VC valuation.
2) Farcaster and the familiar Nostr, Lens, etc. are three different decentralized social network protocols. Through observation and analysis, I believe that Farcaster is easier to implement and can capture a wider range of market value.
Nostr is a minimalist P2P messaging system, which is more inclined to the upstream communication architecture layer design. It has great disruptive value in the future, but lacks strong application market drive and is still in the concept stage.
Lens places more emphasis on the ownership and interoperability of user data, and is more deeply tied to the current blockchain framework, but it relies too much on Tokenomics incentive expectations, resulting in a relatively slow development of its application ecosystem;
Farcaster uses a decentralized identity layer (on-chain) and an interoperable application layer (off-chain). Leaving aside the message storage rental and communication incentives at the protocol layer, the first Warpcast client alone has accumulated nearly 400,000 users, and its growth potential is evident.
Nostr once made many developers obsessed and then helpless, while Lens was controversial because of the delay in the implementation of Tokenomics. In contrast, the Farcaster protocol mixes on-chain and off-chain environments, and has better social Alpha platform fundamentals. Whether it is the experience and reputation of early users or the emergence of community assets such as $DEGEN, it gives people a "full of value" growth expectation.
3) Farcaster’s technical operation architecture, to put it simply, is built on OP Stack and consists of two parts: on-chain protocol (ID) and off-chain protocol (storage + communication + client):
The on-chain part is mainly responsible for the creation, management and storage of user identities. The purpose is to generate a key pair on the chain that is linked to the account's Ethereum address, which is convenient for data matching and retrieval after the user transfers the client later.
The off-chain part is divided into the back-end information storage system and the front-end user interaction system:
The backend is equivalent to Nostr's Relay information storage and forwarding operation system, which consists of many Hubs nodes to store user data and distribute it between node networks;
The front end is operated by some clients like Warpcast. With the innovation of Frams interactive applications, as well as operating mechanisms such as paid registration and Channel creation and subscription, it has achieved healthy growth, aiming to provide users with an interactive experience comparable to that of web2 social platforms.
It should be said that Farcaster's overall technical architecture framework is not complicated. It draws on the strengths of many others. It not only adopts the essence of Nostr's decentralized backend communication architecture, but also uses the Warps points system to avoid the growth sustainability problem of pure Token incentives. In particular, Frams's innovative front-end interactive experience similar to mini-programs is particularly in line with the preferences of the web3 user group, and the payment end is naturally connected to the web3 wallet environment, making it easier to onboard high-quality user groups with payment habits.
Overall, the growth expectations and potential demonstrated by Farcaster will accelerate the implementation of the decentralized social protocol ecosystem, and I am personally very optimistic about it.
that's all
I think Farcaster should not be classified as SocialFI, DeSoc might be more appropriate.
In the short term, Farcaster will not be put in the spotlight and become too popular, because its registration threshold and paid usage experience will block the influx of most ordinary users. However, from a long-term perspective, this will prevent it from falling into the vicious circle of SocialFI's short-term popularity and then decline, and truly attract long-term users who have real social needs and care about data privacy and data ownership. It is worth continuing to lock in and pay attention to its development.
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