There were two negative hot spots on the decentralized social networking circuit today.
One is that the friend.tech team has set the Admin and ownership parameters to 0x 000…000, which means that the developers of this team have given up control of the smart contract, and the protocol will not have any upgrades or improvements in the future—— Many disappointed users and investors pessimistically interpreted this as friend.tech has chosen a "soft Rug".
Another is that the number of new users of Farcaster has almost stagnated. The number of new users on September 8 was only 545, which has dropped significantly from the peak of about 15,000 in February this year.
Q2 Caishan: Decentralized social networking will explode
As two phenomenally popular projects in the decentralized social field, friend.tech and Farcaster experienced surges in traffic last fall and this spring and summer. The former received Paradigm financing in March this year. The token FT was launched, and the latter received a $150 million Series A round of financing led by Paradigm in May at a valuation of $1 billion. The two major agreements have driven up the popularity of the entire track with their explosion at different stages.
In May of this year (shortly after Farcaster’s financing), Fred Wilson, the co-founder and venture capital tycoon of USV, the first financing institution of X (still Twitter at the time), posted on X that his X account had been He has been dormant for 18 months, but during these 18 months, he has been active on Farcaster and shared his views on technology, startups, venture capital, music, life, etc. on the chain through this protocol. Fred It also called on its X followers to follow its Farcaster account instead.
At that point in time, many decentralized believers regarded Fred's declaration as a milestone event that "decentralized social networking is about to explode." However, in retrospect, it was more like "a short-term high in the market." point".
In the months since then, the traffic observed from friend.tech, Farcaster, Lens and other products has shown a downward trend, and this trend has continued today with the fermentation and discussion of the above two hot events. was presented more explicitly.
Why is socializing so difficult? This is not a problem unique to Web3. Looking back at the history of Web2 social development, you will also find that there are very few successes and countless failures. Generally speaking, building a universal social product is a very difficult challenge. Acquiring customers, retaining them, and allowing users to establish new relationships in new products are all extremely complex matters.
The Three Mountains of Decentralized Social Networking
Combining the frustration cases of decentralized social networking, we can roughly attribute it from three angles.
First, current decentralized social products generally lack certain irreplaceable advantages, making it difficult for users to form "rigid needs".
In other words, the product itself is not irreplaceable at the social level - "What I can do with you, I can do the same at another place." This is a challenge that all emerging social products need to face, because traditional social giants have covered almost all potential service directions, and it is difficult for new products to find a functional innovation that is strongly related to demand.
As far as friend.tech is concerned, its innovations are more focused on the Fi side of SocialFi, that is, realizing the realization of influence and value transfer through Key, while the social aspect has not brought about substantial changes; Farcaster and Lens In terms of social functions, it is almost a replica of X. Although the address-based on-chain social graph also has certain innovative significance, it has little relationship with the needs of users.
From this point of view, the more worthy cases in the Web2 field are TikTok, which uses short videos to break through, and Discord, which is irreplaceable in large-scale community management scenarios.
Second, current decentralized social products have obvious disadvantages in terms of network effects.
The popular explanation of the so-called "network effect" is that the value of a single product increases as the number of users using the product increases , and this value will be fed back to all individuals who use the product.
In this regard, Farcaster actually did quite well in the early days. The protocol attracted a group of investors, founders, and developers to form a high-quality user group with certain "technical" characteristics. The ideological collision between this group also attracted A large number of loyal users who seek knowledge.
I remember that Farcaster co-founder Dan Romero would hold exclusive AMAs on the platform in the early days, and used his personal resources to invite big names such as Vitalik and Coinbase founder Brian Armstrong to attend and comment. As a media worker, I once regarded Farcaster as an irreplaceable platform. source of information.
However, the problem is that there are only a few groups obsessed with "technical" discussions, and PGC models such as high-quality AMA do not have scalable suites, which makes it difficult for Farcaster to maintain its early growth trend.
From the perspective of ordinary users, especially those who have certain needs for content promotion (such as project developers and KOLs), the social reach effect within Farcaster's own traffic pool is still not ideal, and the value feedback that individuals can obtain is relatively low. —— I want to expose my brand, why not go to X; I want to attract new users, why not go to Telegram...
Third, the wealth effect of current decentralized social products has generally declined, which is the most critical and fatal problem.
The so-called "wealth effect" can essentially be understood as a "subsidy" mechanism for users . The entry barrier to the Web3 world is already high, and user profiles are more "speculative". Therefore, users need to be given more sufficient value "subsidy" to attract users to abandon mainstream social positions and switch to new products.
In response to this, Yan Meng, co-founder of Solv Protocol, commented on How many years of accumulated social relationships and data assets? Well, it’s not impossible. How much do you give? The more active people on Farcaster are all investors or related households of his family. If it develops, their migration costs can be obtained. Pay, what about ordinary users?”
For decentralized social products, the “subsidy” mechanism is represented by tokens (including tradable NFTs) . However, the effectiveness of this mechanism has long been greatly reduced. On friend.tech, FT is currently trading at 0.073 USDT, which has dropped more than 97% from its high of $3.26. Key’s own price trend has been criticized; and on Farcaster, as users always The growth in scale, the decline in the benefits of airdrops in the industry, and the expected profit from airdrops are also declining... This makes the "subsidy" mechanism of new decentralized social products gradually fail, thereby weakening the appeal of the product itself.
It’s too early to give up, but new exploration is needed
As mentioned earlier, the popularity of decentralized social networking a few months ago was like "the short-term high point of a market cycle." Following this logic, we are not willing to regard the current trough as the failure of decentralized social networking. , but prefer to regard it as "a periodic trough in the long-term market."
Although from the perspective of individual products, the demise of friend.tech seems to be a foregone conclusion, more decentralized social products including Farcaster, Lens, and UXLINK still have sufficient development potential.
Looking to the future, we are very much looking forward to the fact that social products in the decentralized field can find unique innovation directions and irreplaceable positioning at the social level. We also hope that more products can gradually accumulate considerable network effects through various strategies.
At the same time, we also look forward to seeing more attempts at decentralized social products at the Fi level. Although friend.tech has failed, its exploration at the Fi level still deserves recognition. Blockchain and tokens naturally have financial attributes, and good economic model design may be a potential path to achieve sustainable wealth effects ("subsidy" mechanisms).
