Breaking the Walled Garden: Farcaster and Decentralized Social Media

A walled garden for social media

In today's digital ecosystem, users find themselves confined to "walled gardens" that are characterized by closed systems that are tightly controlled by the overall entity. These so-called digital platforms control user identities, data, and even relationships between users, unilaterally setting rules for engagement and developer interactions. This centralized control in general creates a huge barrier for competitors and innovators alike. It enforces high user switching costs, is extractive and rent-seeking, and sometimes has powers comparable to those of the government.

The dominant digital platform retains the sole ability to modify, monitor, selectively promote, or censor information. They can access private messages, censor or promote content, and even impersonate users. Despite the guarantees of transparency and user benefits, the ultimate trust lies in trusting that those in power will not misuse private data or silence dissenting voices. The spread of misinformation, driven by participation-focused algorithms, erodes public trust. In a democratic society where the press is seen as a "fifth estate," delegating control of speech to a central body, regardless of its intentions, poses a significant threat.

Social media has become a key force shaping contemporary narratives. It can influence public opinion, drive political discourse, and even influence global events. The authority held by these platforms is often controversial as they face accusations of censorship, bigotry, and manipulation. This effect was especially pronounced during the "Arab Spring", when platforms such as Facebook and Twitter played an important role in mobilizing protests and spreading information to challenge dictatorships in the Middle East and North Africa. Another example is the Rohingya crisis in Myanmar.

One way to enhance the status quo of social media is decentralization, which entails transforming a centralized platform into a distributed network with multiple independent nodes. Such a significant shift requires a complete overhaul of the existing architecture to facilitate peer-to-peer interaction and collective content management. This change aims to decentralize control and authority across a wider network while distributing the value created by the platform, which could lead to more diverse and resilient social media interactions.

The future of social networking

The decentralization of social media is gaining traction in response to growing concerns about censorship, privacy, neutrality, user control, and malicious activity on centralized platforms. Decentralized social networks run on servers that run independently, rather than on centralized servers owned by a single entity. The decentralized design gives users and independent developers greater autonomy and control, influencing the functionality of the network and the type of content allowed.

This concept can be likened to a cathedral and a bazaar in software development. The cathedral model is a centralized effort where software is developed by a defined group of developers or even a single developer. This approach is more controlled and structured, narrowing the scope of collaborative innovation. The Bazaar model, on the other hand, is open and collaborative, with many people modifying the source code without central control. This approach enables rapid experimentation, innovation, and cyber stress testing because it allows different groups of individuals to contribute.

Web3 brings a number of benefits to the social media space, addressing key issues inherent in centralized systems:

• Reduced censorship and control: Decentralization significantly reduces the risk of censorship and control for any single entity. In a decentralized network, no central authority has the authority to unilaterally censor content or control the flow of information. This paves the way for a more neutral, less opinionated media landscape in which diversity of thought can flourish. Users can express their views without fear of being silenced by platform owners, which is essential for upholding free speech and promoting open discourse.
• Fairer value distribution: The value generated by the interaction between creators and users is often monopolized on traditional social media platforms. Decentralization changes this dynamic by opening up the design space, allowing for a more equitable alignment of incentives among all stakeholders in the ecosystem, who play an integral role in the success of these platforms.
• Portability and Open Social Graph: An open social graph in a decentralized system means that user relationships and interactions are not limited to a single platform. Instead, they can be used without permission, allowing for greater interoperability between different services and applications. This can lead to a more connected and seamless user experience while fostering innovation because developers can build on existing networks without limitations.
• Data ownership: One of the most significant advantages of distributed social media protocols is that they can give users ownership and control over their data. Unlike centralized platforms, where companies own user data, decentralized platforms can allow users to retain control over their personal information. This enhances privacy and enables users to decide how their data is used and, if they choose, monetize it. This also introduces the concept of "audience ownership", where the creator, not the platform, owns the relationship with the audience, just like email newsletters. This is in stark contrast to centralized platforms such as social media giants, whose users may have thousands of followers but are essentially "renting" access to their audience from the platform.
• Composability and modularity: Decentralized networks are often modular by design, meaning they are made up of interchangeable components. This allows for greater flexibility and customization, as users can choose which modules to use or even develop their own. Modularity also facilitates the development of the platform, as new features can be added or outdated ones removed without breaking the entire system.
• Transparency: Transparency in social media is a key issue, and while decentralization helps increase transparency, the open-source ethos on which the decentralized narrative is based really fosters that transparency. In the decentralized web, algorithms that control what content is shown to users, such as shadow bans and post promotion, can be open-source. Decentralization often requires open source because it distributes power and decision-making power across a network of participants, eliminates unnecessary intermediaries and enables greater autonomy and transparency.

Learn about protocols in the context of decentralized social networks

Every decentralized social network has a "protocol", which is a shared language that ensures interoperability between different applications and services. These agreements can be likened to public infrastructure, similar to roads and sidewalks that facilitate movement between different destinations. Decentralized social media platforms are built on a distributed architecture, where control and decision-making power are shared among participants rather than being centralized in a single entity. Protocols are typically managed by a core team, often a mission-driven nonprofit organization responsible for setting standards and ensuring a balanced, inclusive governance system.

Decentralized social media protocols are employing a variety of different methods for storing data and handling identities:

• Federation protocols: Examples include Nostr, ActivityPub, and AT protocols, which enable servers to communicate with each other. Users or organizations can host servers, although technical knowledge is required, which leads most users to join existing servers. Server administrators typically have audit responsibilities.
• Blockchain-based protocols: Farcaster and Lens use blockchain technology, specifically the identity layer. There is a common misconception that all interactions are stored on the blockchain, but this is often not the case.
• An example of a peer-to-peer approach: Scuttlebutt (SSB) is where individual devices act as servers. This model is better suited for smaller networks or communities.

The Web3 social landscape can be divided into four layers, although this representation is not exhaustive:

• Custody layer: Includes a blockchain for running social applications and a decentralized storage protocol for critical data.
• Social primitives: These are the essential elements that represent individuals, their actions, assets, and relationships.
• Profile layer: The wallet acts as a digital passport, enabling users to carry data across applications and form the basis of their Web3 social profiles.
• Applications: User-facing applications leverage a combination of blockchain, storage protocols, and social primitives. These can be categorized by interaction type: many-to-many (e.g., Twitter), one-to-one (e.g., WhatsApp), and one-to-many (e.g., YouTube).

For example, Farcaster is a decentralized social network that exemplifies the innovative use of these layers to create a more connected and user-empowered online social experience. In the following sections, we'll explore Farcaster in more detail.

Farcaster: Pioneering the decentralized social network revolution

Farcaster is at the forefront of digital development, embodying a decentralized protocol specifically designed for creating and interconnecting social applications. Its core mission is to create a censorship-resistant environment that gives users absolute control over their data and audience connections. This approach marks a shift in the dynamics of traditional social media, offering new areas of social autonomy and user empowerment.

Farcaster's architecture is built on a decentralized network, allowing users to maintain a single social graph across multiple applications. Imagine a platform where various social applications, such as Twitter, Instagram, and Facebook, coexist harmoniously and are linked through a single decentralized identity. This structure ensures that users retain their identity and network connection, even when individual applications impose restrictions. It is a system designed to reduce the impact of centralized entities and return control to users.

Farcaster's network is permissionless, open-source, and encourages developers to participate and innovate by integrating with its APIs and other applications. This accessibility creates a mature environment for enhanced software functionality and enhanced user experience.

Essentially, Farcaster is very different from centralized apps like Twitter. Registrations on Farcaster are based on private-public key pairs, specifically Ethereum addresses. The on-chain aspect of Farcaster primarily involves identity, where users create a unique Farcaster ID (FID) that serves as their persistent identifier in the Farcaster ecosystem. While FIDs are often referred to as NFTs, it's important to clarify that it acts more as an identifier. As per the contract, there can only be one FID per account. This approach guarantees censorship resistance because FIDs are anchored to the Ethereum blockchain.

However, it is important to figure out what exactly this mechanism achieves. While it guarantees that a message can be posted to Farcaster, it doesn't inherently ensure that the message can be read by all. Suppose you implement an audit policy on Farcaster that filters out messages from specific FIDs. This still constitutes a review of the application layer. This highlights a subtle challenge within decentralized platforms: while they can provide censorship-resistant mechanisms at the protocol level, the application layer can introduce its form of content moderation and control.

Content, including social graphs, is stored off-chain within the Farcaster network and is operated by entities called Hubs. These hubs function similarly to Ethereum nodes, and anyone has the ability to run the hub. They ensure a consistent view of the network by synchronizing and exchanging messages.

The first app built on Farcaster was "Warpcast", a Twitter-like platform. However, the potential beyond this is far-reaching, and other social apps (such as Instagram, YouTube, or Substack) have the potential to leverage Farcaster's decentralized protocol as well. The system enables users to move followers between apps, prevents apps from monopolizing users' social graphs, and facilitates novel experiences that combine social activity with on-chain data.

Farcaster's client-server relationship also sets it apart. Unlike Twitter, where a single client interacts with a centralized server, Farcaster allows for multiple servers, each offering different features. This client-server split reduces the risk of any single entity accumulating too much power, echoing the flexibility of exporting Gmail contacts to Outlook or moving assets between cryptocurrency exchanges.

The Farcaster protocol serves as a foundation that enables developers to build competing clients on the same protocol. This approach is reminiscent of how different services, such as Substack and Mailchimp, are built on top of the Simple Mail Transfer Protocol (SMTP).

As a user-centric platform, Farcaster leverages the Ethereum blockchain to create a decentralized registry for user identities. Contrary to the need to generate a new wallet address, new users use existing Ethereum addresses to register a Farcaster ID (FID) with the Farcaster contract. This FID is associated with its username, and while it is unique and serves as a persistent identifier in the Farcaster ecosystem, it is not an NFT in the traditional sense as it is singular and non-transferable. The system minimizes the need for blockchain interaction for day-to-day operations, improving the user experience by avoiding regular gas costs.

Farcaster's approach to social networking innovation consists of three core layers: the identity layer, the data layer, and the application layer. The identity layer is based on Ethereum and manages operations and authorization. The data tier stores authorization information, while the application tier consumes that data. The protocol solves several key challenges for decentralized social networks:

• Identity: Users maintain a consistent identity across applications through their Farcaster ID and username.
• Authentication: The authenticity of the message is verified by the sender's FID.
• Availability: User data remains accessible across a wide range of applications.
• Consistency: All applications adhere to the basic rules set by the Farcaster protocol.

Farcaster's implementation of these solutions has facilitated the development of a variety of applications, including Alphacaster, Discove, Jam, Opencast, Warpcast, and Yup. These apps leverage Farcaster's protocol to provide a diverse, user-centric social experience, similar to traditional platforms like Twitter, but with enhanced user autonomy and network portability.

Farcaster 协议解释

Source: Farcaster documentation

• Application Integration with Farcaster: Applications developed on Farcaster interact seamlessly with the hub, which is a key component in the protocol architecture. These applications access, organize, and classify data stored on Hub to provide a customized user experience across a variety of clients, fueled by APIs. The system ensures dynamic and diverse applications, each of which caters to different user preferences.
• Governance and operational standards: Farcaster runs on a governance model based on coarse consensus and operational code. The changes to the protocol were driven by the Farcaster Improvement Proposal (FIP), which required approval from a wide range of stakeholders, including protocol developers, application developers, and users. This consensus-driven approach ensures a democratic and collaborative development process where no single entity exercises dictatorial power.
• Social Ecosystem Partners: Farcaster's network goes beyond its core functionality to encompass a wide range of applications. This diverse range of features includes a user notification system, a Move-to-Earn platform, a social event notifier, an ecosystem metrics tracker, a messaging app, a decentralized news platform, and more. These apps enrich the Farcaster ecosystem, providing users with a wide range of services and features.
• Full decentralization: Farcaster achieves what it calls "full decentralization" by ensuring that users are always able to find each other and communicate with each other, regardless of external limitations. This level of decentralization is based on three key functions: a unique identifier called a Farcaster ID (FID), publishing messages under that name, and reading messages from any valid name. While the Farcaster name (fnames) is centrally controlled by Warpcast and has the ability to revoke cybersquatters, FID is permissionless and on-chain, providing stronger assurance against censorship. Users can also further integrate their social identities with the Ethereum ecosystem by associating their FIDs to the Ethereum Name Service (ENS) domain through proofs. This approach balances the need for decentralization with practicality, avoiding the pitfalls that can lead to inefficiencies and high costs with a fully blockchain-based system.
• Scaling networks and decentralized name registration: One of the challenges of decentralized social networks is scaling. Farcaster solves this problem by allowing users to choose which server to use to store messages and to use public/private key pairs for secure and unique identification. Adopting a hybrid off-chain/on-chain architecture allows data storage to be distributed across multiple servers, reducing reliance on a single centralized server and preventing bottlenecks as the network grows. Users can choose servers to store messages without increasing concentration or infrastructure pressure. Additionally, the protocol employs smart contracts to create a decentralized name registry that enables users to associate their unique public keys with memorable usernames and host URLs. The system ensures that users can easily locate and communicate with each other, maintaining the integrity of the connection.
• Identity and authentication: Farcaster introduces a robust identity and authentication system. Users have a digital identifier controlled by a key pair, and their identity is registered on a Turing-complete blockchain. This setting allows for key rotation and recovery, ensuring security and flexibility. Messages are signed with the user's key pair, ensuring tamper-proof and self-authenticating communication.
• Message Graphs and Applications: The Farcaster network is conceptualized as a message graph that represents a user's social network, user content, and relationships. This structure is maintained by a hub that synchronizes the message graph using the Conflict-Free Replication Data Type (CRDT). This mechanism enables consensus without coordination, ensuring data integrity and consistency across the network. Applications built on Farcaster range from simple mobile clients to more complex systems with hub-connected backends, providing users with a variety of options to suit their needs.
• Farcaster's hybrid architecture: Farcaster's hybrid architecture combines on-chain and off-chain systems. It leverages smart contracts on Ethereum for identity registration, storage leasing, and key management. Off-chain hubs provide high-performance data streams to validate and replicate messages on the network. This architecture facilitates the development of a wide range of applications within the Farcaster ecosystem, enhancing user experience and network capabilities.
• On-chain and off-chain architecture: Farcaster's hybrid model is strategically divided into on-chain and off-chain components to optimize security, consistency, and performance. On-chain operations through contracts on the Optimism mainnet are reserved for critical functions such as account creation, data storage, payments, and application key management. Minimize these actions to reduce costs and increase efficiency. In contrast, off-chain systems are powered by a network of peer-to-peer servers called hubs, which handle a large amount of user activity. This includes posting messages, following users, and profile updates. Off-chain activities prioritize performance and cost-effectiveness, leveraging on-chain signatures to ensure security.

The hub forms a distributed network of servers that are critical for storing and validating Farcaster data, which is critical for reading and writing in the Farcaster ecosystem. They initiate operations by synchronizing with the Farcaster contract on the blockchain to identify each user's account and key. The process of a Farcaster message involves creating, signing, uploading to the hub, verifying, and then distributing it to the peer hub via gossip.

Verification checks that the signature is valid and that it complies with the protocol specifications. Use CRDT to resolve storage conflicts, such as duplication or exceeding limits, to obtain deterministic results. The hub uses the gossipsub protocol to distribute messages and ensures data integrity through periodic differential synchronization with peers, enabling strong eventual consistency even after disconnecting. However, messages may arrive out of order.

There is no need to reach a consensus between hubs on the content, as on-chain components ensure the integrity and ownership of messages through cryptographic signatures. If there is a conflict between the messages of the two Hubs, on-chain data can be used to verify the authenticity and origin of the messages and resolve the conflict based on the immutable records on the blockchain. The Center also uses peer scoring to assess behavior, maintaining network integrity by excluding peers who do not meet the criteria.

Source: Farcaster documentation

• Core contracts on the OP mainnet: The on-chain functionality of Farcaster is anchored in the three main contracts deployed on the OP mainnet:
• The ID registry is responsible for registering, transferring, and recovering Farcaster accounts.
• Storage registry management account for the lease of storage space.
• The key registry allows accounts to issue keys to applications to publish messages.

Source - Farcaster documentation

• Farcaster Hub - Off-Chain Backbone: Hubs form the backbone of Farcaster's off-chain system. These distributed servers store and validate Farcaster data, synchronized with on-chain data from Ethereum and off-chain data from other hubs. They play a vital role in reading and writing data to the Farcaster, and their accessibility allows anyone to run the Hub on a variety of platforms.
• Data Lifecycle and Validation: The journey of Farcaster messages is a testament to the robust design of the protocol. Once a user creates and signs a message, it is uploaded to the hub, which verifies its authenticity and compliance with the message type requirements. Once verified, the message is checked for collisions and stored in the hub.
• Data replication and consistency: The hub employs a two-stage process (gossip and differential synchronization) to ensure data replication. The system is based on the gossipsub protocol and is supplemented by regular synchronization to catch any lost messages. Although there may be out-of-order messaging, the hub maintains strong eventual consistency.
• ENS Names and Usernames: Farcaster integrates ENS names as human-readable account identifiers, supporting off-chain ENS names (Fnames) and on-chain ENS names (e.g., @alice.eth). This dual approach caters to the user's preference for control and personalization. Fnames offers a free but regulated option, while on-chain ENS names offer complete user control but for a fee.

Farcaster Framework: The New Web3 Paradigm

Farcaster has recently launched a major feature called Farcaster Frames. A framework is a standard designed to enhance user interaction by seamlessly integrating external content into an application interface. It will be converted into an interactive mini-app within the Farcaster. Frameworks combine static or animated visuals with interactive elements. This allows users to interact with various external links and applications without exiting the application. When activated, these interactive buttons send a POST request carrying a signed payload, facilitating a series of dynamic user engagements. At the heart of Frames' operations is the EdDSA authentication system provided by Farcaster, which ensures a seamless and secure user experience across a variety of platforms without the need for application switching, thus avoiding potential mobile OS issues associated with deep link redirects.

Key features:

• User Experience (UX): With the EdDSA system, all Farcaster clients, including Warpcast and Supercast, essentially support the framework. This integration allows users to interact with Frame directly from their feed with a simple click, enhancing overall user engagement without the need for additional apps.
• Security: By avoiding the use of ECDSA keys, the framework significantly reduces the risk of wallet churn. Also, since they are cryptographically signed, they cannot be spoofed.
• Composability: The EdDSA key corresponds to the user's FID, allowing for direct extraction of social graph context for all users. That's why the token gating framework for minting and revealing content is already visible.

The introduction of Frames led to a significant increase in daily active users (DAUs) for Farcaster, and developers quickly adopted the platform to integrate native cryptographic features such as NFT minting and gaming. The surge in adoption shows that Frames has the potential to bridge the gap between separate, siloed experiences to deliver a unified and immersive user experience. Farcaster is actively working on enhancements to Frames, with a focus on features such as text entry, on-chain transactions, and improved privacy measures.

The prospect of decentralized applications

Farcaster, an emerging platform in the decentralized social networking space, is cultivating a vibrant, diverse ecosystem of applications, each addressing a different aspect of digital interaction and online community building. Below, we've outlined some of the exciting applications that leverage Farcaster in unique ways:

• Warpcast: Pioneer of social networks

Warpcast is the flagship app in the Farcaster ecosystem, mirroring the user interface of traditional social networking sites like Twitter. Accessible through mobile and web browsers, this Web3 app allows users to share posts (actors), interact with others, show off their NFT collections, and seamlessly integrate their on-chain activity into their social feeds.

• Paragraph: Revolutionizing newsletter publishing

Paragraph reimagines the publishing industry in a decentralized world. It draws inspiration from the Substack of the Web2 space to enhance the user experience with extensive customization options, automated email workflows, in-depth analytics, and team collaboration tools. Its unique offerings include minting, NFT membership, token gating, and direct integration with the Farcaster social graph, opening up new avenues for content monetization and audience engagement. When a user signs up with an Ethereum wallet, Paragraph immediately leverages their Farcaster network to recommend newsletters from their connections. It allows users to subscribe to the newsletter of their followers, view feeds of their followers' long-form content, and access popular posts shared within the Farcaster community. Paragraph also aggregates Farcaster's discussions directly onto relevant newsletter posts, centering conversations and enhancing engagement. The Paragraph team recently integrated Farcaster Frames to streamline the newsletter experience, providing users with a one-click subscription to the newsletter and users being able to read posts directly from the Farcaster feed.

• Kiwi News: Community-driven crypto media platform

Kiwi News has become a cryptocurrency-focused media dApp with community engagement centered around NFT tokens. Users can share and vote on a large amount of content, such as podcasts, news articles, and videos. Offered as a web extension and app, Kiwi News offers an ad-free experience with no social noise and an emphasis on community-curated content.

• Use: Make cryptocurrency exploration fun

Wield is a wallet that offers a unique club membership model that enables users to earn rewards through crypto transactions. It leverages Farcaster Layer 2 Cast to efficiently submit messages to federated open-source hubs. This approach eliminates on-chain storage fees and Farcaster ID fee requirements. Farquest and Cast are applications built on the Wield platform that enhance the Farcaster protocol experience. Cast is the well-known Farcaster client with around 15,000 daily active users, and Farquest gamified the protocol, allowing users to explore it in an RPG style and earn rewards.

• A suite of utility-oriented applications

The Farcaster community has developed a range of utility-focused applications, including:

• castRSS: Integrate a user's Farcaster activity into other applications.
• Launchcaster: Enables users to discover new web3 projects.
• Fardrop: Enables users to create whitelists based on followers.
• RequestCaster: Serves as a public forum for product and feature requests.
• Sharecaster: Enables users to create actor links that are suitable for preview.

Growth and metrics

来源 - DUNE

The diagram provides a view of user registration for that protocol. The graph was initially characterized by a slight uptick in sign-ups, but after July 2023, there was a noticeable uptick in sign-ups, as it marked a significant shift to a permissionless, paid subscription model. The narrative above the chart is filled with a sense of anticipation for 2024, reflecting a bullish stance on the future trajectory of user engagement with the protocol.

来源 - DUNE

来源 - DUNE

These charts provide a granular view of the dynamics of interactions within the Farcaster community, highlighting content sharing patterns and corresponding levels of engagement among different types of actors. The first graph tracks three key metrics: links, reactions, and conversions. The spikes in the graph indicate sporadic spikes in activity and have significant spikes, especially in the reaction section, suggesting viral content or events that prompted an increase in user interaction.

The Actor's Total Reactions After 24 Hours chart provides details of the amount of reactions received by the actor within 24 hours of release. It is divided into reaction ranges, such as 0, 1-5, 6-10, all the way up to more than 100 reactions, showing the distribution of engagement between posts.

Source - Farcaster Network

The data points in this dashboard paint a clear picture of a platform on the rise, showcasing substantial and growing engagement. A total of 2.8 million deliveries of 306,000 users indicates a strong and active user base. The weekly and monthly active casters were 49,000 and 53,000, respectively, further highlighting this healthy level of repeat engagement and indicating that users return to the platform on a regular basis.

An 11% user growth rate and a high Gini index of 90 indicate that activity levels are concentrated in a smaller group of users. This can be explained by the central, highly engaged community that drives platform interactions, a common feature of emerging platforms. The heatmap showcases the weekly actor activity, providing valuable insights into user behavior patterns, showcasing the time of the highest engagement. This data may help target peak activity to launch new initiatives or features.

The "Users by Model" pie chart and the "Ongoing Engagement" metric highlight the platform's success in attracting and retaining users over the long term. Segments with engagement lasting more than a week, two weeks, a month, and three months confirm continued interest, which is a key factor for long-term growth.

All of these statistics work together to show that Farcaster is on the right path when it comes to building and growing its user base.

Risks and challenges

The rise of Farcaster faces significant challenges and adoption hurdles, particularly in terms of user experience and broader decentralized cognition. This task is complicated by the presence of multiple clients, each with their own slightly tweaked UI, which is a key factor in achieving wider adoption. This technology gap can hinder mainstream users, who may value the familiarity of the interface and the richness of the content more than the nuances of the underlying technology. In this context, a related debate is the public assessment of decentralization and censorship resistance. While appealing to a privacy-conscious demographic, it's unclear whether the average user prioritizes these aspects over convenience.

In addition, there is growing discussion about whether absolute decentralization is the ultimate goal, or whether a modest model of semi-decentralization (similar to the recent evolution of platforms such as Wikipedia) might be more acceptable. For example, Farcaster takes a fully decentralized approach to reap the benefits of decentralization while retaining the ability to scale and combat spam. This hybrid approach provides a balanced juxtaposition of user autonomy with responsible content governance.

As Farcaster expanded, maintaining the integrity of the user base and community culture was another obstacle. The platform's ethos of fostering a friendly and innovative digital environment must withstand the pressure of growth, ensuring that expansion does not erode these fundamental values. Farcaster faces stiff competition not only from entrenched Web2 entities, but also from other SocialFi-based protocols in Web3, making market penetration and user conversion a daunting task.

Overall, decentralized social media platforms (such as Farcaster, Mastodon, Minds, and Lens) offer several advantages over traditional centralized platforms, including user control over data, censorship resistance, and enhanced privacy. However, they face significant challenges in gaining widespread adoption, such as:

• Complex user experience: The onboarding process for decentralized platforms can be cumbersome, involving cryptocurrency trading, wallet installation, and understanding new protocols.
• Difficulty scaling: Decentralized platforms often struggle to build a sufficient user base, which is critical to the success of social networks.
• Decentralized landscape: Decentralized ecosystems can be more difficult to navigate than centralized platforms, leading to retention issues.
• Lack of moderation: A lack of centralized moderation can lead to misinformation, cyberbullying, and the spread of criminal activity.

As application layers on top of decentralized social media protocols gain more and more attention, the influence of large applications on the underlying protocol becomes an important but often overlooked topic. Large applications can significantly steer protocol development decisions, just as Gmail's local policy changes can affect all other email providers, even in decentralized email protocols. In order for a decentralized protocol to remain truly democratic and resistant to influence from large entities, it must have mechanisms to enforce rules against large entities, or support a competitive environment with many participants to prevent any one person from unilaterally forcing changes.

The way forward

As we look to the future of decentralized social media, we are on the verge of breakthrough shifts that will fundamentally change the way we interact online. These advancements herald a new era in which our virtual experiences are not only more engaging and personalized, but also carefully designed within a framework that supports user autonomy and collective governance.

Gaming and business

Decentralized social media protocols will enable a wide range of secondary innovations. The exciting areas we are working on are gaming and commerce. Prospects include the development of games that leverage user engagement and wallet activity. These may echo the early Facebook game, but without the infamous spam problem. The commercial side is likewise promising, with the opportunity to purchase NFTs directly through Farcaster and access to professional services. Importantly, these developments on Farcaster don't run the risk of what happened with Zynga vs. Facebook, where complementary solutions built on top of centralized platforms could suddenly turn into competitors, highlighting the platform risks associated with centralized platforms.

Decentralized content moderation

While decentralized content moderation also requires a delicate balance between free speech and preventing abuse, the difficulty lies in distinguishing between acceptable and unacceptable content, a task complicated by cultural differences and subjective interpretations. While there is no universally accepted standard of acceptability, democratic processes, such as those employed by Wikipedia editors or syndicated social networks, provide a decentralized content moderation model that is not controlled by private entities. The future of decentralized social media is likely to involve a democratic approach to content moderation, where users, supported by technological tools and automation, decide what is acceptable through debate and deliberation. Such governance should be based on ethical principles, democratic control, and accountability, beyond simplistic censorship to resist or dictatorial executive power. Currently, these features are often bundled into a single entity, leading to issues of bias and lack of neutrality.

Social Media and Artificial Intelligence

The intersection of social media and artificial intelligence (AI) has been an active topic of discussion, mainly because of how AI algorithms use user data to target ads and content. Twitter and other social networks utilize AI/ML models to analyze large amounts of personal data, tailor user experiences, and personalize content and advertising. This raises concerns about privacy and data ownership, as these models are trained on the user's data, but they don't belong to the user. Decentralized social protocols introduce a fundamentally different dynamic, where users own and control their social graphs. Users can "mint" posts and content, build their own "on-chain content collections," and support content creators through microtransactions. In the context of the latest developments in artificial intelligence, decentralized social models offer unique advantages for users to train their own AI models based on their own data. As FredWilson discusses in his recent article, a user's on-chain collection can serve as a personalized dataset for training these AI models. This enables highly personalized AI experiences because the model is trained on data that is directly relevant to the user, and it respects user privacy as the user can decide when and how to use their data.

Modular approach

A more modular approach, where different aspects of the platform are managed independently, can help address these issues. This will involve separating the baseline protocol (which should be neutral) from the moderation layer, which can be tailored to the needs and preferences of different user groups.

In the broader context of decentralized social media, this modular approach could lead to more neutral "public town squares" while still allowing for efficient regulation. This will make the end-user experience more valuable, meaningful, interesting, useful, and "appropriate" by filtering out harmful participants and posts.

Expansion of Farcaster

Farcaster's expansion into a wider range of features is compelling. This includes implementing a verification mechanism for real user giveaways and allowing the use of a Farcaster account to log in to external applications, enhancing the connectivity of the ecosystem. Despite being in its infancy, Farcaster has shown great potential and is exciting, reminiscent of platforms like Clubhouse in the early days. It's evident that it's committed to building a Web3-centric, creator-centric culture. As Farcaster continues to grow, questions about the scalability of its premium user base will become increasingly important. The platform is dedicated to nurturing a friendly, optimistic, and innovative online space that makes it stand out in the digital realm. Despite the challenges facing the market, its strategic vision and unique approach to decentralized social networking inspire optimism and anticipation for its future growth.

Web2 platforms have matured over time, underpinned by strong network effects, but also challenged by many deep-rooted design issues. In contrast, Web3 social media platforms are just getting started and are often criticized for their unrefined user interfaces. However, they embody a promise for a better and more equitable future, with the aim of dismantling the "walled garden" of traditional social media. As the new era of social media unfolds, it will be shaped by the collective efforts of users and the ethical framework they have established, striving to create a more transparent, accountable and inclusive digital ecosystem for all, without repeating the patterns of the past.

We are very pleased to see the emergence of new models and primitives in this field. If you are creating or planning to develop an innovative product for the new era of social, please do not hesitate to contact us.

We would like to thank Seed Club Ventures, Wield, and Katie of Archetype for their valuable feedback on this report.