Original compilation: BlockTurbo
Original compilation: BlockTurbo
Traditional social products are often thought of as fully packaged content and communication applications. At their core, however, they are primarily identity products. They provide the underlying link between a persons digital persona and their data, content and social relationships. The connection between people and content is the foundation of digital communication, yet it is monopolized, manipulated and monetized through a sugar-coated cannonball built by a handful of closed platforms.
Decentralized Social (DeSoc) protocols are re-architecting digital identities to be owned and managed by users. With DeSoc, users are free to communicate and build applications trustingly without manipulation or censorship for profit. Before that, the DeSoc network needs to reach a minimum level of network scale and overcome the current centralized platform paradigm.
In the traditional social field, many platforms are almost impeccable in the competition, because the rich personal data and content data (social graph) they possess cannot be obtained from the outside world. While platforms can reap huge profits from this, restricting access to the social graph creates three core problems for creators and associated businesses:
Disjointed Creator Monetization – Creators are often forced to use tools like email lists, blogs and other partnerships in addition to social media in order to fully monetize their content. While the overall creator market grows from about $14 billion in 2021 to over $100 billion in 2022, creators have limited revenue due to increased user friction from having to switch across tools and platforms.
Disproportionate share of platform value - While social platforms earn over $230 billion primarily from advertising, content creators only earn about $6.5 billion in revenue share. For example, on YouTube, which has the most generous revenue share, nearly 98% of creators do not reach the poverty line in the United States with ad revenue share alone.
Centralized Creator Revenue Allocation - Because social algorithms are optimized for predictable performance, only top creators with predictable appeal receive the vast majority of ad revenue. If developers do not have access to social graph data, there is no subsequent business model innovation that can support the waistline group among creators.
first level title
DeSoc architecture
The DeSoc protocol, like traditional social protocols, provides a core link between personal account information and digital content. The account profile is usually an NFT, and the published content, whether it is a post, video or comment, is associated with the core account on-chain or off-chain. Since all accounts and content relationships (the social graph) are open and readable by developers, anyone can build front-end applications and functionality on top of the social graph. This breaks down the technology stack of traditional platforms and significantly expands the potential for innovation.
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As development has increased, many projects have been launched to address problems outside of the core social graph. Theyre building every aspect of consumer apps, from developer infrastructure like video transcoding to features like messaging and search.
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Personal accounts and content relationships in the social layer are at the heart of any consumer application today. Typically, this layer of infrastructure benefits from shared standards. However, the core social graph protocols, each with different design criteria and tradeoffs, are in the early stages of building user bases and integrations. Therefore, upward investment in front-end and application infrastructure is challenging.
first level title
Social Graph Protocol
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Lens
protocol design
Lens, currently in closed release, is designed based on smart contracts and built on top of Polygon. Each Lens profile sends a ProfileNFT, and all followers of the profile send a FollowerNFT to represent the connection. In addition to basic personal accounts and subsequent content, other core concepts of Lens are:
Publications - Posts made by profiles are stored in the users ProfileNFT, with URIs pointing to metadata stored in off-chain solutions like IPFS. To save fuel, publications only become NFTs after they have been collected.
Collecting - Users can collect another users post, which will be minted as an NFT in their wallet. Collections are a way for creators to directly monetize their content, and for users to form stronger relationships with other profiles. It also introduces a new monetization path for those who find and retweet valuable content.
Mirrors – Mirrors is a reshared publication. As they are not real publications, they cannot be collected directly. However, if the original content is collected by other users, the person who reposts the valuable content can get a part of the income. Additionally, Mirrors has created a new form of ad tech where users can inspire others to boost their content.
Modules - Modules are smart contracts that are executed after being triggered by events such as new follow or favorite. Developers can customize Lens capabilities within modules and use them to build new features, including monetization. For example, a follow module may require a payment or subscription to follow profiles. Modules drive scale and feature potential, because developers have a framework to add almost any feature to Lens, while the social graph remains standardized and thus composable.
Built-In Governance - FollowNFTs are effectively badges that show users are part of a community. Knowing the potential, Lens built additional logic into the FollowNFT for things like voting delegation. Together, users can form a social DAO, which can have its own profile and be managed by its FollowNFT holders. Additionally, DAO owners can program special voting and governance rules directly into FollowNFTs.
integrated
The front end mainly interacts with the Lens contract through the Lens API. The Lens team indexed all Lens contracts such as ProfileNFT and FollowNFT. It then stores the formatted data in a Postgres database. Data is accessible through a standardized Lens API, improving performance and accelerating time to onboard for front-end developers.
Since Lens is a smart contract built on top of a general-purpose blockchain, it requires another network to handle high-throughput functions like content management and messaging. For messaging, Lens recently partnered with message storage and encryption network XMTP. It is used to securely send DMs to other personal accounts in the Lens API.
Application developers determine content storage for images, videos, and general metadata, typically choosing IPFS and Arweave. However, controlling content access, and thus scarcity, requires a key management network that encrypts and decrypts content, such as the Lit protocol.
The Lit protocol is used at the developer level to encode rules for accessing content. For example, a user could token-gate a post so that only holders of subscription NFTs or other tokens can view the post. Lens recently embedded token-gated posts using the Lit protocol into the Lens API, making it easier for developers to build content scarcity into their applications.
pros and cons
A core strength of Lens and other smart contract-based social graph protocols is composability and scalability. Developers are free to implement Lens extensions that interface with any other smart contract protocol. Additionally, other protocols that interact with Lens, such as reputation-gated DeFi or DAO tools, can be more easily deployed. The design surface area of a smart contract social graph like Lens is a major advantage compared to traditional social platforms and web-based encrypted social graphs.
One downside, however, is the limited and general recommendation engine in the Lens API (basic content feeds are available today, improvements are likely). Without a strong recommendation feature in the API, social feed projects would have to build their own indexer and then build their own recommendation algorithm to recommend new content to users. As the front end matures and seeks to gain a competitive advantage, they will almost certainly explore rolling out their own indexing and recommendation algorithms. Additionally, this trend will extract value from Lens, as a front end with powerful indexing and algorithmic capabilities will have no incentive to pay taxes or write data back to the Lens contract.
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CyberConnect
protocol design
CyberConnect, a closed-launch multi-chain social graph protocol, recently acquired over 20,000 account profiles. As a social graph based on smart contracts, CyberConnect, similar to Lens, uses NFT to represent personal data and followers. However, they differ in content representation and API methods.
Core features of CyberConnect include:
Account NFT - Each personal account profile (ccProfile) is a non-transferable NFT. Once created on one chain, account names are reserved on other chains. The account NFT acts as a central point of relationship for all user content and subscribers. Additionally, this NFT collects any payments from collected content or subscribers.
Subscription NFT - After following a profile, a subscription NFT is minted to the users address, representing the connection between the user and the newly followed profile NFT. Additionally, account owners can set rules such as requiring ownership of tokens or paying some small sum before issuing a subscription NFT.
Essence NFT - Account-generated content is represented as Essence NFT, which follows the OpenSea metadata standard. They can be any digital object the user desires, such as posts, blogs, videos, or credentials that indicate social status. Similar to Lens, other users can collect Essence NFTs for free or for a fee, depending on how developers configure the middleware that manages Essence NFT functionality.
Middleware - Developers can configure rules that are invoked during events such as publishing accounts, subscribing to NFTs, or collecting EssenceNFTs. Similar to Lens Modules, CyberConnect Middleware allows users to customize how they want to monetize their content and shape the user experience.
Multichain - CyberConnect is currently deployed on Ethereum, Binance Chain and Polygon where users can create accounts and content. New accounts, subscribers, content and various on-chain activities are indexed across all chains and then aggregated by CyberConnect in its API.
Off-chain data - Data from data storage networks like IPFS and Arweave are indexed and stored alongside other off-chain data sources like Rarible, Twitter, and Foundation. By correlating on-chain and off-chain data, CyberConnect is able to build a comprehensive view of users.
Interest Graph Engine – CyberConnect first aggregates cross-chain index data into a relational database and then into a graph-based database (Neo 4 j). From the graph database, CyberConnect exposes the data through its API. Additionally, CyberConnect builds recommendation models that can recommend profiles to follow, content feeds, and more. Developers can access these models from an API, significantly reducing initial application development costs.
integrated
The CyberConnect API is the primary tool that allows developers to utilize CyberConnect profiles and content in their applications. The API interfaces with a graph database that aggregates the CyberConnect social graph from across chains. Additionally, CyberConnect offers a recommendation engine that provides profile and content feed suggestions. Similar to Lens, normalized data and recommendation algorithms accelerate time-to-market for new front-end applications.
Also similar to Lens, CyberConnect interfaces with Lit Protocol to provide developers access control and content scarcity tools. To further enhance privacy, CyberConnect is exploring features such as zero-knowledge proofs to provide downstream applications with a users social graph without revealing the exact details of the social graph data.
CyberConnect profiles and content reside on a common blockchain, making high-throughput messaging a function that cannot be performed locally. As such, CyberConnect plans to announce integrations with messaging protocols in order to provide its users with secure end-to-end encrypted communications.
pros and cons
The core strength of CyberConnect is its multi-chain deployment and data indexing pipeline. The aggregation of cross-chain and off-chain data sources allows CyberConnect to build a richer social graph than competing protocols. Since CyberConnect uses a graph database instead of a relational database to store its data, it extends the capabilities of its recommendation engine given that graph-based algorithms are natively available.
While CyberConnects EssenceNFT was promoted as allowing developers to issue credentials and use them as social posts, the protocol lacks native support for retweeting and commenting on content. While app developers can add this functionality themselves, it only becomes slightly more difficult compared to more socially deterministic protocols like Lens or Farcaster.
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Farcaster
protocol design
Unlike the smart contract-based networks Lens and CyberConnect, Farcaster is a network-based social graph that is currently invite-only on the testnet. Its profile ID is stored within the Farcaster contract on Ethereum, but the social graph is stored in a separate network of Farcaster hubs. Each hub in a peer-to-peer network broadcasts an update, such as a new message (called a Cast in Farcaster) to each other. Broadcast updates, known as incremental writes, are initiated by new user actions that add new nodes or connections to the social graph. There are six possible defined incremental writes in the Farcaster protocol:
Cast - A message sent by a user. Casts can be simple text posts or comments, or they can reference metadata stored elsewhere, such as IPFS, for larger messages such as images or videos.
Reactions - likes, retweets, and other types of simple message-specific actions from other users.
Amps – Forgoing traditional following, Farcaster uses Amps to show the originating user more of another users content for a period of time (think of it as a temporary follow). Currently, the limit is 3 months and 100 Amps.
Varifications — Proofs of Ownership, are double-signed messages that link a Farcaster wallet with another (e.g. Ethereum wallet). They allow users to import NFTs and other assets into Farcaster without transferring tokens.
User Data - standard metadata about a user, such as bio, profile picture, etc.
Signers - The key pair that the user authorizes to sign increments. It is a special delta type initially set up to allow users to create additional messages.
Users can purchase a fname, a human-readable name for use in Farcaster, represented by an NFT on Ethereum mainnet. While similar in implementation to ENS names, fnames do have additional properties such as recoverability and cheaper minting costs. These properties make them more suitable for social applications.
By extension, fnames also offer a viable business model, as the proceeds from the initial fnames sale and re-registration can be used as profit or to incentivize Hub operations. The namespace registry business model has historically been one of the few successful on-chain models, as ENS was second only to OpenSea in terms of on-chain revenue last year.
integrated
Frontends (clients) integrate directly into the Farcaster Hub network by running their own Hub, or indirectly through third-party APIs that have indexed the network. Given that the app is currently on a testnet, only Farcaster sponsor Merkle Manufacturing is running Hubs, but the goal is to open Hubs in the first half of 2023. Therefore, web access to the frontend is currently through the Farcaster API. The API is currently very simple, with only chronological content endpoints and no dynamic recommendation engine. Given that Farcaster is hiring data engineers to build search and content recommendations, a more robust API may be in the works.
Given that Farcaster is web-based and in the early stages of development, there are no other third-party live integrations. Although Farcasters news is open, and it currently lacks crypto-native features and elements of digital scarcity, it can be speculated that Farcaster or application development integrations to enable such features in the future.
pros and cons
Along with its advantageously simple design, Farcaster can benefit long-term by capturing value as a network-based social graph rather than a smart-contract social graph. Hubs in the network will be the first to gain access to new messages, making them the first participants in that information. In a world where headlines can move markets and high-frequency bots dominate trading, having first access to information is a highly profitable position, and someone might pay to take advantage of it. Therefore, if Farcaster moves to a token-based model related to network participation, tokens can derive marginal value from this social MEV.
By far the biggest challenge to Farcaster and network-based social graph protocols in general is information bloat. The volume of messages (data) sent by users can become so large that the cost of running nodes and a P2P network becomes unmanageable for decentralization. Farcaster has chosen to limit the amount of messages a user can send to the network by deleting old messages.
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Deso
protocol design
After a controversial launch under the name BitClout in March 2021, DeSo is moving forward with its unique Layer 1 chain designed for social applications. The chain is currently a hybrid proof-of-work chain based on the Bitcoin algorithm, so it does not have functions such as smart contracts. However, in the first half of 2023, DeSo will undergo a hard fork to migrate the network to a proof-of-stake design.
In order to customize the chain for social applications, DeSo abandoned the general chain, but defined a core transaction mode specific to social applications. Standard social activities such as posts and profile updates and NFT transaction types are defined at the network level. Additionally, DeSo defines financial transactions that support standard token swaps, as well as DeSos creator tokens and a social tipping feature called Diamonds.
Diamonds act as a tipping mechanism for content creators. For every diamond tip a user receives, the more DeSo tokens they earn. Creator Coins are automatically assigned to accounts and can be purchased in exchange for DESO tokens. Hypothetically, as an account becomes popular, people will want to hold (buy) this creators coins, causing the price to increase for existing holders.
All of DeSos content is stored on-chain, with the exception of raw images and videos, either in a centralized provider like Google Cloud or a decentralized provider like IPFS. With this design, the state of the chain grows, limiting its long-term decentralization potential.
pros and cons
The main advantage of DeSo is also its disadvantage. As the network scales to accommodate different social applications, it becomes exponentially harder to maintain. As new posts and transactions continue to expand the state, DeSo nodes will eventually struggle to pay the cost of storing all this data. So while in the short to medium term DeSo will be able to scale based on its design decisions, at some point the choice will be either a decentralized with prolific low cost nodes or a more centralized chain with extremely high cost per node .
Another major disadvantage of DeSo is the design space provided to application developers. It is almost impossible to build novel crypto-native functionality without a generic smart contract. Instead, applications are forced to use deterministic features coded by the DeSo team, such as creator coins and tipping functions. However, with the upcoming hard fork, DeSo is introducing access control and affinity, which does expand the application design possibilities.
social graph attraction
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Both Farcaster and CyberConnect are much earlier in their startup process, so they have less overall traction than Lens. Despite being the longest active protocol and the only one not in a closed release, DeSo has 75% fewer active posting users (~5,500) than Lens. Also, since DeSo is low-cost and accessible to all, content on DeSo is more bot-led.
While Lens dominates the market, no social graph protocol has seen a truly compelling, differentiated product built on top of it. Therefore, early user metrics do not reflect the target market for the next killer app.
first level title
front-end application
The application layer combines all the functionality exposed in the social layer into a familiar user experience. While each application largely uses the same underlying components, the use cases of applications vary and generally fall into three broad categories:
Entertainment Apps – Social feeds, video sharing, and other apps primarily for connecting and entertaining.
Workplace Apps - Group and DAO tools focused on coordinating tasks. Traditional examples include Slack and Discord as well as task management apps Asana and Trello. While not yet connected to DeSoc, cryptographic applications such as Console, Dework, and Wonder would all be crypto-native examples.
Free Apps - Adjacent apps that offer services such as NFT trading often integrate profiles in some limited way because profiles are not core to the product or service.
While entertainment apps such as social feeds are considered a core use case for social apps, workplace apps are responsible for the vast amount of content created on a daily basis. In large corporations, millions of PowerPoint slides and memos are produced with the sole purpose of communicating with others within the organization. This form of content creation is then shared via email or Slack rather than traditional social media channels.
As DAOs shift their work from a closed to an open paradigm, the stereotyped role of the content creator will expand significantly to include more tangible and useful things rather than entertainment content creation. This untapped pool of content creators remains a huge growth opportunity for DeSoc as the requirements of commercial content creation (i.e. financial aspects and certification) strongly favor the crypto track over the traditional social media track.
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Lenster
The top three Lens apps by post count — Lenster, Phaver, and Orb — are all social feed protocols. Lenster is a web-based Twitter-like application with the largest number of weekly contributors, over 35,000. Since its launch, Lenster has accounted for roughly 30-50% of all weekly posts on Lens, and over 90% of browser-based Lens posts. Over the past four weeks, weekly Lenster posts have grown 44%, outpacing Phavers 7% growth, the second-largest frontend.
Phaver
Phaver is a mobile app built on Lens with all the standard social features. Its main purpose is to introduce unique gamification features to incentivize future activities and reward users. Each user can stake tokens on posts they think will be followed by others. If the post performs well, the user will be rewarded with additional tokens. Additionally, users can publish their content in the Premium Channel. After sacrificing some points, content publishers will be able to earn additional points for each user who subsequently stakes on the post.
This incentive mechanism rewards both top content creators and top curators (stakers). Plus, it prevents spam since paid posts incur fees. However, staking on post is currently free, leading to skewed incentives towards frequent posting until the cost is turned on. As a result, Phaver has nearly 40% of posts dedicated to Lens, but only 9% secondary engagement from comments and retweets.
Orb
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CyberConnect
While CyberConnect doesnt have as robust an app ecosystem as other social graph protocols, its gaining traction with its uniquely positioned Link 3 product. Link 3 is both a global social identity like Linktree and an event product. It allows users to host webinars and issue NFTs (W 3 ST) to attendees indicating their attendance, as well as run sweepstakes locally for attendees. Hosted by Kyle Samani and others, CyberConnects 2023 Summit will be hosted entirely on the Link 3 platform.
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Farcaster
Given the networks early development stages, the vast majority of activity was driven by Farcasters own client, a Twitter-like mobile app recently released on the App Store. While usage of the network and its app accounts for about 10% of active posters on Lens, the network has a highly engaged user base. Nearly half of active posters have been posting for more than three months, and nearly 75% of them have been posting for a month or more.
While Farcasters applications have driven most usage of the network so far (mainly due to Hubs still being closed), a number of new customers have recently joined, such as Purple, Omilos and Discover. Each client offers a similar social feed-style platform, with marginal improvements such as curated feeds for various topics. However, there have been recent alpha-stage projects like Pixel Pool, which aims to break away from a Twitter-like product and serve video on top of Farcaster.
Once the Hubs are open, the number of frontends and their functional diversity may increase.
DeSo
While DeSo has a range of apps, from a blogging app to a fundraising app, more than 75% of the webs posts come from three social apps:
Desofy – a mobile social media app and the DeSo app with the most posts. The app is backed by the DeSo Foundation and allows users to earn money by tipping diamonds and selling NFTs.
Diamond - Web-based social feed product backed by the DeSo team. Its functionality includes all monetization aspects of DeSo, enabling users to publish short and long-form content on the site in addition to images and videos.
DeSocialWorld – Multilingual social feed designed to cater to a global audience. It also showcases most of DeSos features, including content and monetization.
Currently, the feature sets of the applications are very similar given DeSos deterministic design. However, with the upcoming hard fork, DeSo will introduce access groups to build more custom features.
first level title
Competitive Dynamics
Since any application can display a users posts, friends, and overall social graph, users are free to choose any front end to participate in their network. However, this user mobility brings fierce competition to the front-end layer not found in traditional social apps. This competition comes from the network effect advantage retained by the social layer, while the front end lacks a strong moat to retain users.
Frontends can build competitive moats in two ways: through token models like Phaver, or by building advanced recommendation algorithms into their own indexing process.
While token models and loyalty programs can drive user adoption and retention, traditionally successful moats are driven by scale. In a world where airdrops and token models drive down fees in industries like DeFi, front-ends that can scale to support custom data collection, indexing, and recommendation functions may be more sustainable. Furthermore, the user data used to build the recommendation engine becomes richer over time as the front end has richer information about the users interaction with the product (time on page, scrolling behavior, etc.).
Over a longer time frame, the likely increased data collection and scale of the front-end layer creates competitive risks for the social layer. If the front end can scale to outperform all competitors, the incentive to write data back to the social graph is greatly diminished, reducing the potential value capture of the social graph protocol.
polymerization
While most frontends are specific to a particular social graph, there is nothing preventing a frontend from aggregating content across multiple social graph protocols and for users. An early example of this style approach is Yup, which spans Lens, Farcaster, Mirror, and even Twitter.
In Web2 businesses, aggregators tend to be the main business model identified by Ben Thompson. However, a key difference between Web2 aggregators and encrypted aggregators is the accessibility of the underlying data. Popular aggregators, such as Google, Facebook, and others, aggregate information that is difficult, but not impossible, for individual users or small businesses to gather.
Summarize
Summarize
Money acts as the motivating force that drives human movement in the same way that physical forces concentrate energy into less concentrated areas. When the incentive power of platforms doesnt balance $230 billion with creators nearly $6 billion, theres a huge incentive force for developers to create balancing technology, and for creators to adopt it.
DeSocs open architecture enables anyone to build applications on top of the social graph. Without major network effect hurdles, the viability of new social apps and business models is vastly expanded—for both traditional creators of entertainment apps and knowledge worker creators.
However, front-end applications need to build crypto-native functionality that provides compelling value to users (i.e., beyond traditional social in the crypto space). Given the current state of the app and app infrastructure, it may take some time for DeSoc to complete a functional pilot phase before it becomes the basis for peoples online identities.
