Decentralized Social Media: Insights into Farcaster, Lens Protocol, and Friend.tech
Social media is undergoing a revolutionary transformation with the rise of decentralized applications. Significant venture capital backing, exemplified by Farcaster's recent $150 million raise, holds the potential to reshape digital interactions fundamentally. However, the question remains: is this transformation truly as impactful as it appears? This newsletter delves into the intricacies of decentralized social applications such as Farcaster, Lens Protocol, and Friend.Tech, analyzing their distinct features, underlying technologies, and the future prospects for online communities.
As Chris Dixon aptly states, "Come for the tool, stay for the network." These platforms extend beyond mere functionalities; they promise the formation of vibrant, decentralized communities where users retain control and ownership. Our data-driven insights elucidate how these platforms are fostering new paradigms of social interaction, marking a significant departure from traditional, centralized social media models.
Introduction
The concept of decentralized social media is not novel. As we delve deeper into the world of decentralized social (DeSoc), it is crucial to understand the broader context of this movement.
Traditional Web2 social platforms have been dominated by centralized entities, creating closed networks that control user data and restrict interoperability. In contrast, Web3 promises to decouple the data layer from the application layer, empowering users with data ownership and enabling seamless social interactions across platforms. This paradigm shift opens up new possibilities for social interactions, identity management, and data sovereignty.
In the rapidly evolving landscape of Web3, CyberConnect stands out as a pioneering force in decentralized social interactions. Founded in 2021, CyberConnect aims to explore the vast potential of Web3 by focusing on both the protocol and application layers. As the first decentralized multi-chain social graph protocol, CyberConnect's core system, CyberProfile, serves as a digital passport for users in the Web3 world, recording assets, content, social relationships, and on-chain activities in a decentralized manner. With 1.2 million users, CyberConnect has built a comprehensive ecosystem that includes over 50 applications and is continually expanding through developer empowerment.
As CyberConnect continues to grow, its influence on Web3 social interactions provides a foundational context for exploring the contributions of Farcaster, Friend.Tech, and Lens Protocol.
Farcaster
Fundraising
Series A Round
Amount Raised: $150 million
Valuation: $1 billion
Date: May 20, 2024
Investors: Paradigm (Lead), Andreessen Horowitz, Union Square Ventures, Standard Crypto, Haun Ventures, Variant Fund
Seed Round
Amount Raised: $30 million
Valuation: Not disclosed
Date: July 12, 2022
Investors: Andreessen Horowitz (Lead), Coinbase Ventures, Multicoin Capital, Standard Crypto, 1confirmation, Archetype, Scalar Capital, Ribbit Capital, Canonical Crypto, Volt Capital, A.Capital, Chapter One, First Round Capital, Offline Ventures, Todd and Rahul's Angel Fund, Haystack, Proof Group, Floodgate, Ansa Capital, Mischief, Balaji Srinivasan, Elad Gil, Punk 6529, Raymond Tonsing
Overview of Farcaster
Architecture: Farcaster is a shared protocol on which independent clients, like Warpcast, are built.
Data Handling: Utilizes off-chain data handling with on-chain elements for identity, such as FIDs on Optimism and connected wallet addresses across EVMs.
Key Components: Includes Hubs (distributed networks for data), Clients (instantiations of the Farcaster protocol like apps), and Frames (in-app interactive modules).
User Identity: Employs on-chain decentralized identifiers (DID).
Content Type: Supports off-chain posts (casts), reactions (likes and comments), follows, etc.
Monetization: Indirectly addressed through $DEGEN.
Focus: Targets developer tools, decentralized app (clients), and in-client apps (frames) creation.
Ecosystem: While supporting multiple clients, Warpcast currently accounts for almost all activity.
Live on Mainnet: August 30th, 2023 (Optimism)
Permissionless: October 12th, 2023
Key Metrics:
Total users: 431,711
Protocol Revenue: $1,551,025
Farcaster Explorer
To thoroughly examine user statistics and trends on Farcaster, we recommend utilizing the dashboard created by Andrew Hong (@ilemi) - https://dune.com/ilemi/farcaster-explorer
friend.tech
Co-Founders
0xRacerALT
Shrimppepe - (https://x.com/shrimppepe)
Fundraising
Date: August, 2023
Round: Seed
Amount Raised: TBD
Lead Investor: Paradigm
Overview of friend.tech
Launched in August 2023 by anonymous developers 0xRacerAlt and shrimppepe, Friend.Tech faced scrutiny due to their controversial history in the crypto community. Despite concerns, the project secured seed funding from Paradigm. The funding included token authentication, leading to the issuance of their own tokens.
Friend.Tech's origins trace back to TweetDAO and Stealcam, both of which faced issues leading to their rebranding. The platform initially grew quickly by attracting Web3 influencers but was criticized for vague privacy practices and reliance on influencers. A strategic pivot in the V2 update aimed to focus more on the broader community, but challenges remain regarding influencer engagement and competition from platforms like X, Farcaster, and Lens.
Key Metrics:
All-Time Buyer Addresses: 916,908
Protocol revenue: 17,256.3 ETH ($64,635,197.28)
Total Net ETH Flow: 21,238.79 ETH ($79,490,206.95)
$FRIEND Tokenomics Overview
The $FRIEND token is integral to Friend.Tech V2, acting as both a currency and a community engagement tool. With a market cap and fully diluted valuation of $94,523,169, all 94,542,666 tokens were allocated to the community at the token generation event.
The tokenomics encourage participation: 10% of tokens are claimed by following ten people, and 90% by joining a club, ensuring active ecosystem involvement. $FRIEND tokens can only be traded within Friend.Tech’s system, using a native swap function with a 1.5% fee, which supports liquidity and platform revenue, though it necessitates trust in the platform's stability.
Clubs function like decentralized mini-governments, allowing customization and governance by key holders, akin to a DAO. The introduction of $FRIEND tokens and clubs enhances engagement and monetization, with a 1.5% transaction fee within clubs supporting both liquidity providers and the platform, thereby maintaining the ecosystem's financial health.
Lens Protocol
Founder
Stani Kulechov (founder of Aave) - https://x.com/StaniKulechov
Fundraising
Undisclosed Round (June 8, 2023)
Amount Raised: $15 million
Investors:
Tier 1:
Balaji Srinivasan (Angel Investor), Delphi Digital (Venture), Blockchain Capital (Venture)
Tier 2:
Venture: DEO CoLab Ventures (Lead), Fenbushi Capital, Variant, Kraken Ventures
Angel Investor: Sandeep Nailwal
Tier 3:
Venture: Robot Ventures, a_capital, Zee Prime Capital, Folius Ventures, General Catalyst, Palm Tree Crew
Angel Investor: Sebastien Borget
DAO: Global Coin Research, FlamingoDAO
Corporation: Tencent
Tier 4:
DAO: dao5, Seed Club Ventures, SpaceshipDAO, DAO Jones, FireEyes
Venture: Stake Capital Group, Tioga Capital Partners, Bonfire Ventures
Angel Investor: Alex Atallah, Denis Nazarov, Pplpleasr, Emily Yang, Hayden Adams
Undisclosed Round (November 3, 2022)
Amount Raised: Not disclosed
Lead Investor: FTX Ventures
Overview of Lens Protocol
Blockchain: Polygon
Architecture: Lens Protocol is a shared protocol on which independent apps, like Hey, Orb, and Phaver, are built.
Data Handling: Handles all social interactions on-chain.
Key Components: Features an NFT-based social graph, standard APIs, and Open Actions.
User Identity: Utilizes blockchain addresses and profiles as NFTs.
Content Type: Supports on-chain posts, comments, likes, collections, follows, etc., using NFTs.
Monetization: Facilitated through profile trading, post collection, etc., and indirectly through $BONSAI.
Focus: Concentrates on the creator economy and an interoperable dApp ecosystem.
Ecosystem: Supports a thriving and balanced ecosystem of clients, including Hey, Orb, and Phaver.
Live on Mainnet: May 18th, 2022 (Polygon)
Permissionless: February 27th, 2024
Key Metrics:
Total Users: 391,034
Total Transactions: 29,470,444
Conclusion
Social media is undergoing a transformative shift with the rise of decentralized applications. Our newsletter examines decentralized social apps like Farcaster, Lens Protocol, and friend.tech, focusing on their features, technologies, and the future of online communities. With Farcaster's recent $150 million funding round, these platforms aim to reshape digital interactions. However, as we are still in the early stages of adoption, many uncertainties remain. Despite valuations reaching billions of dollars, these platforms have generated less than $2 million in revenue, raising intriguing questions about their future prospects.
Sources
Risk Disclaimer:
insights4.vc and its newsletter provide research and information for educational purposes only and should not be taken as any form of professional advice. We do not advocate for any investment actions, including buying, selling, or holding digital assets.
The content reflects only the writer's views and not financial advice. Please conduct your own due diligence before engaging with cryptocurrencies, DeFi, NFTs, Web 3 or related technologies, as they carry high risks and values can fluctuate significantly.
Great content, the analysis and trends you cover are incredibly useful