Original author: Gabe Parker
Original compilation: Luffy, Foresight News
DeSoc, short for decentralized social network, is a growing field in the cryptocurrency industry that uses blockchain technology to establish a new standard for sharing ideas and information digitally. These applications, like many in the broader cryptocurrency industry, aim to promote the values of data ownership, transparency and censorship resistance. The birth of blockchain-based social media platforms can be traced back to 2016, when Steemit, the first blockchain-based DeSoc application, was launched on the Steem blockchain.
Unlike traditional social media apps that typically require an email to log in, DeSoc apps use a blockchain wallet’s private key signature for login. After logging into the DeSoc app using a blockchain wallet, users can share content, follow other users, and collect digital goods in the form of fungible and non-fungible tokens. Ownership of user data is controlled by the users wallet and is typically stored in a distributed file storage system, which differs from using centralized data hosting services such as AWS and Google Cloud, which are used by large social media groups such as Facebook and Twitter. Some DeSoc apps also offer data portability, giving users a unified experience across various apps without the hassle of creating new profiles. Crucially, the technical architecture of the DeSoc app ensures a seamless connection between a user’s profile data and their blockchain wallet.
This report analyzes the on-chain activity of the most popular DeSoc applications since 2021, including Farcaster, Friend.tech, DeSo, and more. The report also delves into the narratives and growth strategies driving DeSoc application adoption, particularly the adoption of Farcaster, a relatively new DeSoc application that accounted for more than 30% of all DeSoc-related transaction activity in 2024.
active user
In 2016, Steemit, the first DeSoc application, was launched on its own blockchain (Steem). Since then, the DeSoc application has accumulated more than 8.7 million users and completed more than 82 million transactions on Ethereum, Optimism, Arbitrum, Polygon, BSC and other Layer 1 blockchains. As of April 6, 2024, the total number of monthly active users of DeSoc is approximately 550,000 (Note: Users here are defined as unique wallet addresses that have interacted with the smart contracts of DeSoc applications in the past month). For most cryptographic applications, distinguishing between active and inactive users is not easy. The analysis in this report defines active users as users who have interacted with an applications smart contract at least once during the applications lifetime.
The top DeSoc apps monthly active users account for approximately 0.15% of Twitter/Xs monthly active user base. It should be emphasized that the two DeSoc applications with the largest cumulative number of users were launched between 2020 and 2021, so they have been used by users longer than Friend.tech and Farcaster. DeSo is a Layer 1 blockchain released in June 2021. It has the largest number of user registrations among the DeSoc applications, with a cumulative number of 3 million users. Cyber Connect is a decentralized social graph that supports all EVM-compatible chains. Launched in September 2021, it has the second-highest cumulative DeSoc user registrations, with a total of 1.5 million users interacting with the application since its inception.
The top five DeSoc applications account for 85% of total registrations. As of April 6, 2024, DeSo accounted for 32% of the total DeSoc application registrations. Farcaster has experienced a surge in users since late January 2024. Although it is a relatively new DeSoc platform, it already accounts for 3% of DeSocs total registrations.
Distribution of DeSoc applications among total registrations
Different DeSoc applications have different user experiences and priorities. Here are the most popular DeSoc apps by category:
Traditional social media: The user experience includes public posts, comments, likes, and private messages.
Social Finance: User experience involves purchasing assets that provide access to gated content (Friend.tech keys) or represent fractional ownership of social media content (post.tech).
Collection: The user experience focuses on the collection of digital assets (mainly NFTs).
Other: User experiences that do not fall into the three specified categories above.
Traditional social media DeSoc applications are the most common applications in the DeSoc field today, and their users account for 67% of the total registered users. There are four representatives of this category of applications, while the collection category represents only the POAP DeSoc application. It is worth noting that the social finance field only emerged in August 2023, and they ranked third in user registrations. Although activity on social finance DeSoc applications such as Friend.tech has dropped sharply, their rapid success and competitiveness in challenging older DeSocs is significant.
Distribution of total registrations by DeSoc category
From September 1, 2023 to April 1, 2024, DeSoc’s cumulative number of users increased by 2.9 million, thanks in large part to the launch of Friend.tech, a social finance based on Base Rollup DeSoc Apps. Friend.tech added over 800,000 users from August 10, 2023 to January 1, 2024, making a significant contribution to DeSocs total user count. Although Friend.techs success was short-lived, the app apparently sparked a resurgence of other DeSoc apps. After the number of users of Friend.tech began to stabilize in late October 2023, other DeSoc platforms (such as Cyber Connect, Farcaster, POAP and Lens) saw a clear growth trend in new users, as shown in the figure below:
Friend.techs explosive growth in 2023 makes DeSoc the annual focus of Web3. Friend.techs user base grew 620x in 3 months, and the app generated over $27 million in revenue. The activity was driven by anticipation of the Friend.tech token airdrop. However, as of April 6, 2024, there was still no sign of an airdrop from the Friend.tech team, and user activity has declined since then. In October 2023, Friend.tech had an average of 22,700 daily active users that month, and by January 2024, this metric had dropped to 1,000.
Number of transactions
Users on DeSoc applications typically need to sign transactions on-chain in order to post topics, comment on other users’ posts, retweet posts, and complete other actions. Therefore, transactions that interact with a DeSoc applications smart contract reflect the usage of that application.
From November 2023 to January 2024, user transaction activity and the number of daily active users of the DeSoc application stagnated. The number of daily transactions on DeSoc did not start to show encouraging signs of growth until February 1, 2024, with a 3x increase compared to the previous two weeks. The uptick in trading activity is partly attributable to a resurgence of Farcaster users looking to claim airdrops from the sub-community.
Farcaster is a traditional social media DeSoc application based on Ethereum L2 Optimism, launched in September 2022. A channel is a forum on Farcaster with a designated topic. For example, the Bitcoin channel is a place where Farcaster users interested in Bitcoin can share and discuss ideas about Bitcoin. On January 28, 2023, Farcaster’s fastest growing channel Degen announced an airdrop of their $DEGEN tokens to all channel participants. It should be noted that the creator of the Degen channel and the token $DEGEN has no connection with the Farcaster team.
Farcasters transaction surge in mid-February 2024 was also driven by the launch of Frames, a new feature that allows users to embed web-based applications in Farcaster posts. Through Frames, users can create token minting launchpads, interactive games, and polls within Farcaster posts. Riding on Farcasters momentum, user transaction activity on other DeSoc applications (Lens and X-Connect) has also seen a slight recovery. As of April 6, 2024, Farcasters daily unique transactions exceeded 6 million.
Leveraging exclusive access to users and social media content to drive user growth strategies delivers the highest initial returns for DeSoc apps. Friend.tech accumulated 820,000 users in 2 months, while Instagram and Twitter took 3 months and 2 years respectively to reach similar levels. However, with or without financial incentives, DeSoc applications struggle to retain users in the medium to long term, as we will discuss in the next section on the DeSoc narrative cycle.
DeSoc narrative cycle
Historically, the explosion of DeSoc activity has tended to follow a power law, with one application representing the majority of activity across all DeSoc applications. These boom-and-bust cycles of DeSoc applications highlight the weak stickiness of DeSoc users and the tendency to jump to the next popular DeSoc application. The last three activity spikes from 2022 to 2024 are telling because they prove that DeSoc activity is driven by cyclical narratives.
The first meaningful surge in DeSoc activity occurred in March 2023, driven primarily by Lens, a traditional social media DeSoc app on Polygon, and X-Connect, another traditional social media app on Binance Smart Chain. At the time, decentralized social media applications modeled after Web2 social media applications dominated the DeSoc market. The second surge in DeSoc activity in September 2023 was attributed to Friend.tech, which introduced a new DeSoc category called “Social Finance”. As mentioned earlier, social finance involves purchasing access to gated content and purchasing fractional ownership of user content.
The third surge in DeSoc activity in February 2024 was due to renewed user interest in Farcaster. Farcaster’s recent rise represents a resurgence in the decentralized traditional social media movement, which last saw the phenomenon in March 2023 with Lens and X-Connect.
If history repeats itself, Farcasters on-chain activity may decline after 3 to 4 months, just as other leading DeSoc applications have experienced surges in activity in the past that then faded. However, Farcaster stands out as having the potential to sustain its high levels of user activity, thanks to its modular architecture that encourages channel creators to innovate.
Similar to Lens and X-Connect, Farcaster enables third-party developers and social media creators to easily build and launch their own DeSoc applications. Existing users of Farcaster can connect to Farcaster-based DeSoc applications without creating new accounts to try out the applications. Additionally, with the introduction of Frames, Farcaster channels and applications outside the Farcaster ecosystem can increase the flexibility of interacting with users by building their own tokens, voting, and interactive games. This programmability gives the user experience on Farcaster significant potential to drive sustainable user growth and activity at DeSoc.
in conclusion
Signs of mass DeSoc adoption are yet to emerge, but the industrys resurgence over the past 12 months cannot be ignored. In about four years, the DeSoc app has grown by 8.7 million registered users. Inevitably, as global cryptocurrency holders grow over the next decade, we expect the number of DeSoc users to increase as well. Like NFTs, gaming, and DeFi, DeSoc is a subsector of the crypto industry that has the potential to drive mainstream adoption of blockchain-based technologies and cryptocurrencies. Going forward, Farcaster stands out as a DeSoc app because of its focus on engaging users and developing sustainable growth strategies through creator-led features and content generation.
