Once seen as a 'Twitter killer,' the current revenue situation of the decentralized social protocol Farcaster is worsening. According to Dune Analytics panel data created by @pixelhack, Farcaster's revenue in October only reached nearly $16,000, with daily revenue being sluggish, achieving four-digit figures only on a few days.
Farcaster's cumulative protocol revenue surpassed $2 million on July 1, but then began to slow down, with total protocol revenue in the third quarter amounting to about $320,000, a decrease of 70% from the $1.12 million in the second quarter.
Farcaster's daily protocol revenue over the past year, Source: The Block
Farcaster's user activity has also declined since peaking at the end of June, with daily active users dropping from a peak of 71,000 to about 33,000.
Farcaster is a decentralized social protocol built on Ethereum, founded in 2020 by former Coinbase employees Dan Romero and Varun Srinivasan. It has received investments from companies such as Paradigm Ventures, a16z, and Haun Ventures, totaling over $180 million.
Farcaster gives users more control over their data and allows developers to expand the platform through 'Frames,' a type of Mini App. It briefly became a hot topic in the Web3 space this year. The main client of Farcaster is the social app Warpcast, developed by the Farcaster team, which adopts a design similar to existing social platforms like X, allowing users to write posts (casts) and perform other functions such as minting NFTs and claiming tokens.
Some crypto community members discussed the reasons for Farcaster's declining development. An X user named @TropicVibes stated that creating 'a better mouse trap' and making a profit is difficult; if alternatives only offer marginal improvements, people will stick to what they know.
@TropicVibes continued to point out: 'People think it’s just like X, so why not just use X? I love web3 as much as anyone but developers overestimate people’s willingness to change.'
It’s hard to 'build a better mouse trap' and profit. People stick to what they know if the alternative is a marginal improvement. People believe it is just like X, so why not just use X? I love web3 as much as anyone but devs overestimate people’s willingness to change.
— Tropic (@TropicVibes) October 22, 2024
Another X user @justz_eth shared two main reasons for not switching to other social platforms like Farcaster. First, many global leaders and influential people are using X, such as presidents and CEOs like Elon Musk. Second, he has already accumulated a certain amount of content on X, and he doesn't want to rebuild his achievements and presence on other platforms.
Although @justz_eth recognizes the benefits of decentralized relays, such as resistance to censorship, it believes the most likely way for new social platforms to succeed is to target a new generation of users who have not yet accumulated much content online and are willing to explore the benefits of emerging platforms. Another possibility is that a catastrophic event on the X platform could trigger a mass migration to other platforms; mere token incentives are not enough to drive such a shift.
Data Source
Source
