Author: flowie , ChainCatcher
Editor: Marco, ChainCatcher
In the first two years of becoming a unicorn, the founder of Farcaster adopted the most primitive method to promote his social application: lobbying Web3 people in his circle of friends one by one and inviting them to join the platform, including Vitalik Buterin who promoted Farcaster.
After thousands of field promotions, Farcaster has a group of elite seed users.
Web3 users, led by Twitter's early investor Fred Wilson, announced their migration to Farcaster, where most of Vitalik's views were first published.
On May 21, Farcaster announced that it had completed a $150 million financing at a valuation of $1 billion.
Web3 social has been around for eight years since the decentralized content platform Steemit was launched in 2016, kicking off the Web3 social narrative.
Compared to the ups and downs of DeFi and GameFi, Web3 social networking is a more lonely story. Most of the first-generation gold diggers such as Steemit and Bihu have ceased operations. Lens, Damus, and friend.tech quickly fell into silence after creating a brief spark.
Farcaster seems to bring a glimmer of hope for Web3 social networking.
A user on the X platform tweeted that “there aren’t many innovative posts on Twitter anymore”. Vitalik responded by saying, “Join the decentralized social protocol Farcaster, where there are a lot of Cambrian explosions and weird things.”
0xLuo, who has nearly 50,000 followers on Farcaster, told ChainCatcher, "For the first time, I felt real social interaction on a Web3 social platform, rather than the self-entertainment of the Mao party."
At the same time, the extremely high ceiling brought by the social network effect is still "tempting" new and old players to continue. According to RootData statistics, there are nearly 450 Web3 social projects in operation.
In 2018, Torum, a crypto-incentive social product inspired by Steemit, made a comeback after a setback. Jayson, the founder of Torum, told ChainCatcher that “We are preparing to launch Torum SocialFi V2.”
UXLINK, who has experience in social entrepreneurship in Web2, and Tony, a former senior entertainment investor in Web2, both chose social networking as their first stop for Web3 entrepreneurship. They both said, "Social networking is the only way for large-scale application of Web3."
Although Web3 social networking has not yet matured, AC Capital investment manager Armonio said in a recent article that "As Web3 technology continues to advance and barriers and costs continue to decrease, real products may emerge at this moment."
The simplest way: telephone promotion
Tony, co-founder of Web3 social platform Tako, began to prepare a plan to call 300-500 well-known founders, investors or KOLs he was familiar with in the Chinese-speaking region one by one, inviting them to join his Web3 social client TakoCast.
Tony plans to build it into an Asia-Pacific version of Farcaster. “Farcaster targets different language regions and requires localized operation communities.”
He learned how to promote sales through phone calls from Dan Romero, the founder of Farcaster. “The results are completely different if you make one-on-one calls or not.”
Tony said that Farcaster was in the "underwater circle" for a long time in the past one or two years. One of the most important things Dan Romero did was to promote it one by one in person.
Before founding Farcaster, Farcaster co-founders Dan Romero and Varun Srinivasan both held important positions at Coinbase, serving as vice president of operations and platform developer respectively. Farcaster's early investors were also top VCs such as a16z, Coinbase Ventures, and Multicoin.
The first 2,000 users of Farcaster were basically the friends of Dan Romero and Varun Srinivasan, the two founders of Farcaster. They are the most prestigious founders, investors and Ethereum community users of Web3.
"This group of elite seed users has created real social interactions on Farcaster," as they share their views on technology, entrepreneurship, investment and even life.
In Tony's view, "Farcaster is not only an elite community of bigwigs, but also a resource bureau that provides unlimited imagination for subsequent ecological construction."
Compared with whether it is decentralized or what innovative technologies are adopted, the migration and "selling of goods" by the big guys themselves are more attractive.
In mid-2022, after Farcaster announced the completion of a $30 million financing round led by a16z, it did not attract 0xLuo, a leading player in Web3 social networking, to participate in project interactions, "because the invitation code was troublesome, so it was shelved."
It was not until October 2022 that Vitalik posted a tweet on the X platform, attaching his personal Farcaster and other Web3 social account addresses, and 0xLuo began to pay attention to Farcaster.
“Since Vitalik is promoting the product, I must participate,” 0xLuo sent a private message to Dan Romero on the X platform to recommend himself and ask for an invitation code.
Half a year later, 0xLuo finally got the invitation code to join Farcaster.
At first, 0xLuo did not think Farcaster was special in terms of function and technology, "but it brought me closer to the big guys". On the X platform, you can only like the big guys, but on Farcaster, the big guys will like you whenever you look up, and you can send him a private message at any time, and the chance of getting a reply is very high. "Even if there is no expectation of token incentives, it is very attractive to live in the circle of big guys' friends."
In addition, due to the high quality of users, alpha opportunities for projects closely related to Farcaster will be released on Farcaster first, which is also a major reason that attracted him.
After 0xLuo shifted his main Web3 social platform to Farcaster, Farcaster brought him the most fans among a large number of Web3 social projects he participated in.
0xLuo told ChainCatcher that at the beginning of this year, his Farcaster followers were less than 2,000. "With Farcaster's daily active users exceeding 50,000 in February, my followers have also skyrocketed in more than four months along with the surge in Farcaster users, and have already exceeded the 2,000 users on its X platform."
Crypto KOL A Ping also joined Farcaster as early as October 2022. A Ping shared in the Xiaoyuzhou podcast that what made her feel that Farcaster was a little different was that the Nouns DAO, which she had been paying attention to for a long time, did not go through a proposal, and most members joined Farcaster without any prior agreement.
“Nouns DAO has been looking for a social platform to discuss public affairs, and chose Discord through a proposal, but the Nouns DAO Discord channel was abandoned after being closed and reopened.”
No longer obsessed with the idea of decentralization
In the early days, Web3 social networking focused on decentralized narratives, especially reaching a peak after Reddit was blocked in 2021.
In early 2021, a group called "Wall Street Bets" on the Reddit platform led retail investors to stage a short squeeze, causing at least two hedge funds that shorted "GameStop" to go bankrupt.
But the brief carnival for American retail investors came to an abrupt end, the stock trading code was deleted, and Reddit was also banned.
Joshua Meng, founder of the open information layer RSS3, recalled that at that time the market had a very strong demand for decentralized social networking or social anti-censorship, "because everyone realized that decentralized finance must have decentralized social networking."
Farcaster, the representative Web3 social project in this cycle, initially adopted a relatively centralized and strong operation mode, and its technology stack also relatively emphasized the "adequacy" of decentralization. Joshua Meng feels that "more Web3 social entrepreneurs are moving from idealism to realism."
Farcaster founders Dan Romero and Varun Srinivasan mentioned this shift in thinking in a recent interview.
Dan Romero mentioned that after entering the market in 2021, he found that people in the cryptocurrency field talked a lot about decentralization and the need for other applications in the ecosystem. "We also naively thought that there would really be people who wanted to play with new things, but it turned out that users would rather continue to use existing products."
Despite concerns about Twitter's development after Musk took over, Twitter's network effects are stickier than he initially thought. "The only way we win is not because of architecture, but in large part, it should be building products that people love."
At the beginning of this year, Farcaster experienced explosive growth with Frames, a feature similar to embedded mini-programs. It allows developers to embed interactive experiences in Farcaster posts (casts), such as voting, casting NFTs, building games, and even making instant transactions directly in social media dynamics, eliminating the need to switch web pages when browsing content on traditional social platforms and interacting on the chain.
Since its launch on January 26, Farcaster’s daily active users have increased 20 times in less than 10 days.
0xLuo believes that the emergence of Frames truly distinguishes Farcaster from the X platform and sets a good start for the Crypto-native innovation of its ecosystem.
Farcaster's strong resource operation model is not something that any Web3 project team can replicate. But a group of Web3 social project parties, like Farcaster, are trying to explore the real needs of the Web3 field and start with some specific demand tools.
"If a real pain point of Web3 users is not solved, it will not be sustainable in the end." Jayson, the founder of Torum, is one of the earliest Web3 social gold diggers. This is the lesson he learned after stepping into the pit.
Socialization is more important than token incentives
In 2016, a social media platform called Steemit was launched, which is similar to a blog forum. After users post content (articles, pictures, comments) on the platform, they can get a system reward token called Steem according to the rules such as user voting and commenting. Steemit also puts content on the chain, emphasizing the return of content asset rights to users.
Steemit has gained more than 168,000 registered accounts in one year. Inspired by Steemit, Jayson began to develop a similar crypto-incentive social platform Torum in 2018. Torum V1 allows users to earn XTM tokens by posting, inviting friends, and forwarding content.
This incentive method did not achieve the expected effect. With the advent of the bear market, the Torum V1 platform was unable to provide sufficient rewards, and those users who participated in the project with the expectation of making money were the fastest to leave.
After Torum V1, it also tried to lower the entry threshold of the platform and aggregated multiple media platforms to enrich the platform content, but in the end the number of users still did not increase much.
Jayson said that if you only use token incentives to attract users, it will eventually backfire. "From 2016 to now, all Web3 social networks that have tried to attract users with only token incentives have failed."
As for the incentives on Fi, the incentive methods such as Degen and other meme rewards on Farcaster this year may become a more superior token incentive platform project technique.
"Social accounts for 80% of Torum V2, and Fi will only account for 20%." Jayson hopes that Torum V2 will build a higher-quality social network like Farcaster. Jayson chose to start with more vertical NFT players to solve the pain point that NFT has almost no usage scenarios.
In the past, NFT could only be used as a personal avatar, but Torum V2 aims to transform NFT into a ready-to-use mask filter. It is similar to the special effect filters on short video platforms, allowing users to use and spread them in a trendy way.
Jayson analyzed that the explosion of Web2 social networks such as Facebook originated from a unique and innovative content creation tool, and Web3 social networks will also have a similar logic.
Compared to using a small number of high-quality Web3 users to achieve scale expansion, UXLINK is more pragmatic and chooses to look for opportunities in a larger traffic pool.
UXLINK mentioned that users’ current demand for Web3 is nothing more than discussing Web3 projects and discovering investment opportunities.
"Social networking among acquaintances such as WeChat and Facebook makes it easier to generate trust and conduct transactions."
The core team of UXLINK highly appreciates the mutual assistance among acquaintances of Pinduoduo and TEMU, “which has been successful all over the world”. Therefore, UXLINK copied this similar model to Web3 social networking, and UXLINK chose Telegram, which also has huge traffic but lower risk control.
UXLINK uses the incentive mechanism of Link To Earn to allow C-end users to invite acquaintances to join the Telegtam group, providing them with a social venue for project discussion and participation.
UXLINK, which has a large amount of C-end traffic, monetizes it through B-end Web3 developers who have demand for traffic. UXLINK claims that its registered users have exceeded 10 million and its income and expenditure have been balanced.
"Web3 social has always been a hard-hit area for investment," said Bill, an investor at Cypher Capital, an investor in UXLINK, who is also more pragmatic about investing in Web3 social.
When the overall user scale of Web3 is relatively low, it prefers social projects that can find traffic pools from the beginning to closed applications that need to build their own traffic.
In Bill's opinion, "Without a user base, we can only issue tokens by telling stories and make a short-term profit from market sentiment."
Better timing
The imperfect Web3 infrastructure is also a major reason for the frustration of early gold diggers.
Tik Tok was launched on September 20, 2016, and Steemit was launched two months earlier than Tik Tok. Compared with Tik Tok's fool-proof gameplay, logging into Steemit requires a lot of hurdles.
Jayson, an early player of Steemit, mentioned that crypto wallets such as MetaMask were not yet popular. When a user created a user, the official Steemit wallet would generate four types of keys. Each key would represent a permission, such as one key for logging in and one key for publishing content. "As a novice, I felt very helpless."
Before founding Cyber (formerly CyberConnect), Ryan and his founding team founded a decentralized live broadcast platform Dlive in 2018. At that time, there were not many developers on Ethereum, and due to the lack of infrastructure, in addition to developing products, Dlive also needed to develop its own chain and make deposits.
At its peak, Dlive had 1 million daily active users and had the largest YouTuber at the time, Pewdiepie, as an exclusive livestreamer. Ryan mentioned that the timing of entry was also important, "It was relatively early, and if it were done today, Dlive might have a wider range of success."
Tako co-founder Tony believes that it is time for large-scale applications such as Web3 social networking to take off.
On the one hand, the entire Web3 infrastructure is growing, and the user experience will be better. For example, wallet login has moved from mnemonics to MPC and abstract accounts, which lowers the threshold for using applications.
As the transaction speed of public chains increases, gas fees are also getting lower and lower. Tony said: "Playing DeFi may earn you hundreds of dollars, and a deduction of $10 for a transaction is barely acceptable. Social networking is a high-frequency content. If users have to pay $10 in gas to leave a message or repost, no one will play it."
After the public chain network is expanded, it can also accept concurrent information from more users, such as from supporting only text to supporting multimedia.
On the other hand, while Web3 social applications have not yet achieved large-scale adoption, a group of entrepreneurs have begun to turn to building Web3 social infrastructure. The "puzzle" of infrastructure has provided a fertile ground for the birth of popular social applications.
Ryan mentioned that now when developers develop an application similar to Dlive, they only need to focus on the product itself, because they can choose social-specific chains such as Cyber and call on the social graph built by Cyber. Cyber will also be connected to DEX soon to help the application solve users' deposit and withdrawal problems.
Currently, there are more Web3 social protocols than applications, and the ecosystems of each major protocol also remain highly open.
Earlier this year, 0xLuo discovered that some more interesting clients began to emerge on Farcaster, such as the Web3 version of TikTok Drakula, the Web3 version of Instagram Jam, etc. At the same time, some aggregation clients not only support Farcaster, but also support other protocols such as Lens.
"All major protocols serve as each other's infrastructure and guide each other." Lens ecosystem application Phaver also chose to hold activities on Farcaster, and also supports cross-platform posting between Lens and Farcaster.
Firefly, owned by Mask network, supports simultaneous sending across different social platforms such as Farcaster, Lens and X, and also aggregates content from Mirror and Paragraph blog platforms.
Has the singularity of Web3 social arrived?
Uniswap promoted DeFi Summer, Axie defined GameFi 1.0, and with Farcaster becoming a unicorn, has the singularity of Web3 social arrived?
0xLuo believes that Farcaster + composable application Lego + scene memecoin economics represented by $DEGEN have opened the onchain Social Summer.
Joshua Meng, founder of RSS3, remains cautious. He believes that although Farcaster is currently developing well, it has not yet broken through the bottleneck of being a Single Tribe Network. The current prosperity is closely related to the early high-quality seed users.
Farcaster has almost the same model as the once popular Clubhouse. However, as users are opened up, the quality of social interaction on Clubhouse has rapidly declined, and early elite seed users have also left.
Joshua Meng said that the Web3 social projects that have had their highlights in the past one or two years, such as Farcaster, Lens, Nostr, and friend.tech, have mostly attracted users through Web3's native ideology and economic incentives, which is essentially different from traditional social businesses that rely solely on product and experience innovation.
Jayson has a similar view. “Web3 social is still a very vague concept. Whether it is the social networking of Web3 users, decentralized social networking, or blockchain-based social networking, there is still no project that has emerged to define Web3 social networking in stages.”
Joshua Meng believes that it will take longer for the Web3 social endgame to arrive. This is not just achieved by Web3 entrepreneurs through pain point model innovation, it is more like a social change.
"It's like new energy vehicles to fuel vehicles." Early users were not sensitive to using electricity instead of gasoline, but driven by multiple factors such as startup projects like Tesla that provide a better user experience, education market, and national policy incentives, cars have entered the new energy era.
At present, Web3 social startup projects and teams need to gradually achieve Mass Adoption of decentralized social networking through different paths and prepare for the arrival of the end.
Although the singularity may not appear yet, AC Capital investment manager Armonio believes that "everything is progressing. The experience and lessons accumulated by the industry and the continuous advancement of technology are pushing us closer to the singularity of the industry's explosion."
