The Case for Decentralized Social Media

4 Reasons it's poised for growth

👋🏽 Hello everyone, GM, GM!

Social media is as big a conversation as ever – whether its continuing debates on Elon Musk’s performance at X, the need for greater regulatory oversight, or fears over TikTok’s Chinese influence. But we here in web3 think the most important conversation is one of first principles: the foundational structures by which social media platforms are built.

In today’s guest post, Drew Beechler outlines the powerful case for decentralized social media and the four reasons it should succeed. Drew is the CEO and founder of Holder, a marketing tech and messaging platform for web3 brands and creators. They build in the Lens and Farcaster ecosystems as well as web2 social platforms (Discord and X/Twitter).

Prior to Holder, he led marketing at High Alpha helping co-found and launch over 30 startups and he worked in marketing tech at ExactTarget before it was sold to Salesforce in 2013 for $2.5B.

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The Case for Decentralized Social

It’s an incredibly exciting time to be building, participating, and engaging in decentralized, web3 social. VCs are plowing hundreds of millions of dollars into it. Friend.tech (and its copious copycats) exploded, Farcaster went permissionless and migrated to OP, and Lens V2 launched on mainnet last week (originally announced in July).

So what makes web3 social so special? 

It comes down to four things: 

1. on-chain social graphs

2. programmatic incentives and monetization

3. permissionless platforms

4. interoperable data

On-Chain Social Graphs

Not only am I talking about the fact that the literal post interactions and engagement lives on the blockchain (like in networks like Farcaster and Lens), but the existing blockchain is a social graph in itself. You are able to map relationships, relationship strength, influence, and a plethora of other “social” data, all based on an individual’s wallet address and on-chain interactions. Got a POAP from the last concert you attended? That’s on an open, immutable chain that can be leveraged in countless ways to build a social graph and on-chain identity around a user.

This is incredibly valuable for both builders and the end users. Builders are uniquely able to circumvent much of the “cold start problem” that all social networks and marketplaces struggle with today. The end user also benefits from a more contextualized, personalized experience. Your graph is pre-populated based on who you already interact with and on-chain shared experiences (like conference POAPs, NFTs, DAO participation, etc.). No level of data-scraping magic would make that possible for a network like Twitter(X) or Facebook.

All your on-chain data and social graph is also an asset owned by you and your wallet address. This gives you the ability to bring that social graph with you wherever you go, even if the platform you love is purchased by a billionaire who decides to start charging for blue checks.

Naturally, this also makes social platforms better and better over time because they can build off any other interoperable social content out there. In turn, this also presents major challenges for defensibility and the ability to build loyal user bases (more on that below).

Programmatic Incentives & Monetization

The other major unlock for web3 social is the ability to program incentives and monetization in easier ways. We’ve seen this in nearly every breakout consumer social application building on a blockchain so far. From friend.tech’s unique bonding curve to the Lens collects product and creator monetization strategy, every platform is building shared revenue streams, permissionless monetization, and other gamified financial elements that help the users share in the upside of the platform usage and growth itself. Leveraging incentive designs and in-protocol creator monetization are major ways I think we’ll see platforms capture loyal users and brand defensibility.

Lens Collect Example

Even among the major centralized social media players, the focus around creator-based monetization and revenue sharing has been growing dramatically over the last 12 to 18 months. What makes this unique in a blockchain-based world is the fact that the user account is tied directly to a wallet address and financial instrument (tokens) that are able to capture and share that information. The payouts and revenue share are also completely permissionless and verifiable on-chain versus a Twitter/X or YouTube revenue share black box.

Permissionless Platforms

For the most part, the prominent web3 social protocols have also built with permissionless in mind from day one. This allows for a handful of unique features and ecosystem opportunities, like Interoperable third party clients, which means anyone can build their own client on top of Lens or Farcaster and incorporate their own monetization, growth, and product strategy. 

Just among Lens and Farcaster, we’ve seen a dozen clients - like Orb (mobile-first), Hey (desktop client), Phaver, Warpcast, Aburra, etc - pop up on top of their protocols, all done in a permissionless way. We’ve even seen platforms like Yup launch that are the web3 social super apps, bringing together Lens, Farcaster, Twitter, Bluesky, Threads, and more in one app.

This empowers any developer to build and create their own prioritized roadmap and features they want to see on the protocol and in the ecosystem. Aburra (formerly Alphacaster) is a great example. 

According to billzh.eth, co-founder of Aburra, an open, permissionless structure will power the future:

“Aburra is web3 clubhouse for creators and DAOs. We want to create a social media platform where there are shared economics. It differentiates itself from web2 platforms by tapping into the open social graph and creating web3-native revenue streams via NFTs. We are bullish on permissionless social networks like Farcaster because it allows different applications to compose with each other and grow the pie together.” 

Interoperable Content & Data

This is similar to being permissionless, but there’s a layer deeper to explore. Not only is anyone able to create their own client and product on top of this social graph, but entire ecosystems, communities, and tools are being built that leverage and support the protocol itself, using this interoperable data.

One great example of this is Airstack. They are building web3 data APIs and have built integrations directly into both Lens and Farcaster, allowing developers to easily use Lens and Farcaster data in their applications. We do this at Holder, resolving wallet identities with their web3 social identities and letting brands use that data to drive messaging campaigns or segment their audience. 

We also saw this with Perk Shop’s unique friend.tech integration. Even though your friend.tech account isn’t tied to a user’s primary non-custodial wallet, they were quickly able to create an integration leveraging Twitter and friend.tech data to let you token-gate perks and airdrops to users that owned one of your keys.

We certainly have a long way to go for mass consumer adoption and web3 social to live up to its potential, but as Brian Armstrong noted after his epic AMA on Farcaster earlier this week, “Farcaster rocks and decentralized social is one of my top contenders for winning in the next crypto cycle.” 

Any thoughts or feedback, feel free to hit me up on Farcaster (@drewbeechler), Lens (drewbeechler.lens), friend.tech, or that bird app.

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