Crystal Ball Gazing: Economic Social Incentive Layers

BEFORE WE START

You will want to join Farcaster if you havent already and get your Moxie soulbound token to participate in the economic layer.

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In the past several years, we have seen attempts to create decentralized social graphs. The implementations may differ, but the north star is the same: having a composable social graph layer that prioritizes the users rather than treating them as the product. This approach serves as a tool for creators, communities, and fans alike to utilize in previously unavailable ways, allowing them the flexibility to move with their social capital instead of being tied to a single product provider.

We will focus on what we believe is the most ideal solution from a pragmatic approach, both from a user and developer perspective, that may be able to scale to a user base necessary for global reach. From the beginning, Farcaster took the approach that blockchains do not provide the best user experience for storing all data on-chain, nor is it necessary. Farcaster, the protocol, was built to be a primitive, providing only the small feature set required for the base layer, essentially a social graph. The on-chain component can be simply described as a registry, while the storage layer is decentralized but not on-chain, utilizing the Hubs implementation. This is what the creators and contributors would describe as a sufficiently decentralized social network.

One of the staunch stances that confuses the majority of participants is the prevalent use of token creation for anything in the crypto industry. This is generally a short-sighted approach that few would challenge with an informed opinion because products are incentivized by the majority of participants for easy money early on in the journey. It may even seem ideal to have value transfer and economics baked in at the base layer, but the core Farcaster team, Merkle Manufacturing, knew this was not the route they wanted to take. They adopted a very different approach, viewing the protocol from a traditional business perspective and generating revenue through various methods, one being user signups and yearly subscriptions. Farcaster is already quite successful and is a profitable protocol. Not many blockchain products can attest to this.

This essentially leaves room for products and layers to be built parallel to and/or on top of the Farcaster social graph. As an early user, it seemed apparent this would happen, but it requires background, deep thought, and novel mechanism design.

Airstack is an artificial intelligence-powered platform that allows on-chain data across projects and blockchains. They have been incremental in helping build out farcaster by providing feedback and building through the many early interations of the product as the team continued to test thesises and work on the protocol as it evolved. Airstack notably began providing API's to empower developers. They knew early on to have an advantage they would need to sink time and manpower to extract knowledge and give a first mover advantage. In the early days they started building the second client on the protocol after the Merkle teams - Warpcast(previously named Farcaster, the same as the protocol). They built out Jam which provided some features that were not available in Warpcast. This allowed them to personally find the flaws that would need to be addressed while giving essential knowledge of what clients would need to succeed. Jam was sold to Tako protocol in 2023.

Airstack is the go to provider for developers looking to build on Farcaster

The history of economic social incentive layers for social networks traces its origins to the early 21st century, marked by the rise of platforms like Facebook and Twitter, which capitalized on the network effect to drive user engagement and content creation. Initially, these platforms relied on intrinsic motivators such as social interaction and community building. However, as user bases expanded, the limitations of non-monetary incentives became apparent. This led to the integration of economic incentives, where content creators could monetize their contributions through ad revenue, sponsored content, and later, direct user payments. For example, YouTube's Partner Program allowed creators to earn revenue based on ad views, while Instagram influencers monetized their content through brand sponsorships and affiliate marketing.

Over time, several models emerged to enhance and diversify these economic incentives. Patreon, launched in 2013, allowed creators to receive direct financial support from their fans through a subscription model, offering exclusive content and perks in return. Similarly, Twitch, a live streaming platform primarily focused on gaming, implemented a system of donations, subscriptions, and ad revenue sharing to incentivize streamers. These models not only provided alternative revenue streams but also fostered closer relationships between creators and their audiences.

However, the evolving guidelines and policies of parent social media companies often rendered certain products and business models obsolete. For instance, Vine, a popular short-form video platform, faced significant challenges after Twitter, its parent company, altered its strategic focus and eventually shut down the service in 2017. Similarly, changes in Facebook's algorithm in 2018, which prioritized content from friends and family over pages and brands, drastically impacted the reach and revenue of media companies and content creators who had built their businesses around organic reach on the platform.

With the base layer decentralized social graph. We have the ability for developers to design, play and create. This is a brilliant step forward but with this we have subjective ideas, alignment with different platforms and tokens. Anyone who has been in the industry for a few years quickly realizes while the ideaology around decentralization is what we need, with it, comes as many issues as it solves. Notably, in this case is the fragmentation. Intended is a network affect but we need thoughtful coordination to achieve this. We have seen some alignment with $DEGEN but an equal amount using their own models or tokens from outside ecosystems.The many iteration of Jam after the acquisition by Tako are a great example of this. As an early user, I have mostly abandoned it due to rapid rate of change and time spent on failed attempts.

What developers really need is a plug in solution. Airstack is particulary well positioned for this due to their background, knowledge and resources.

Enter Moxie

Moxie's north star is to grow the Farcaster GDP

TL;DR: The Moxie Protocol, developed by Airstack, revolutionizes decentralized social networks by integrating fan tokens and rewards systems to enhance user engagement and monetize creator-fan interactions. This protocol offers flexible earning mechanisms and transparent payouts, fostering vibrant communities and democratizing economic benefits.

The Moxie Protocol: A Comprehensive Solution to the missing

Airstack's innovative solution, the Moxie Protocol, represents a significant advancement in the realm of decentralized social graphs by integrating economic incentives and enhancing user engagement through a robust token economy. The Moxie Protocol is designed to facilitate direct and meaningful interactions between creators and their communities by leveraging fan tokens, rewards, and other incentive mechanisms. Notably, with Moxie everyones an owner - User, Builder, Channels and the Farcaster Protocol

Central to the Moxie Protocol is the concept of fan tokens, which empower creators to monetize their influence and content directly. Fans can purchase these tokens to support their favorite creators, gain access to exclusive content, and participate in unique experiences. This model not only diversifies the revenue streams for creators but also strengthens the bond between them and their audiences by offering tangible value in exchange for fan engagement and loyalty.

The rewards system within the Moxie Protocol further incentivizes active participation. Users earn rewards by engaging with content, completing challenges, and contributing to community goals. These rewards can be redeemed for various perks, including exclusive merchandise, event access, and even personalized interactions with creators. By gamifying the engagement process, the Moxie Protocol enhances user retention and fosters a vibrant, interactive community.

Moreover, the Moxie Protocol's earning mechanism allows users to monetize their activities within the network. By participating in challenges, games, and community-driven projects, users can earn tokens that hold real-world value. This not only democratizes the economic benefits of the platform but also encourages a more equitable distribution of wealth among users.

Farcaster members can buy and sell FAN TOKENS from the Moxie smart contracts, with three types available at launch: Member, Channel, and Network FAN TOKENS. Member FAN TOKENS provide access to exclusive features and benefits for the token holders, with a portion of all rewards earned by the member accruing to their Fan Token smart contract. Channel FAN TOKENS offer similar benefits specific to the channel, while Network FAN TOKENS cater to network-level benefits and accrue rewards similarly. These FAN TOKENS emphasize utility over speculation, allowing holders access to special features integrated into Farcaster experiences.

FAN TOKENS can only be purchased by Farcaster members through Moxie contracts and cannot be transferred or sold outside of these contracts, preventing secondary markets. Purchases and sales of FAN TOKENS occur via Moxie Fan Token Auctions (FTAs) or the Moxie Bonding Curves smart contracts. FTAs use batch auction contracts for fair pricing, while the Moxie Bonding Curves ensure continuous market liquidity and stability with a logarithmic pricing structure. This method prioritizes membership utility, discouraging rampant speculation. Proceeds from batch auctions are allocated to bonding curve contracts, the Moxie Protocol, and the members or channels whose tokens are sold, with a focus on fostering a decentralized and equitable ecosystem for FAN TOKENS.

The Moxie Protocol allows anyone to offer “proof of work” REWARDS to Farcaster members by staking MOXIE tokens in a REWARDS contract. Members earn REWARDS for completing actions such as creating quality content, building valuable frames, promoting frames, onboarding new users, and interacting with advertisements or products. The protocol verifies these actions and issues REWARDS according to predefined splits. To demonstrate the effectiveness of the REWARDS, Moxie has partnered with Airstack and tested various REWARDS concepts off-chain since March 2024. At launch, REWARDS include earning MOXIE for high-quality casts and replies, using developer frames, and running API calls with Airstack. Common Goods REWARDS support high-quality content creation and are managed by the Moxie DAO, while 3rd party REWARDS allow sponsors to acquire MOXIE and incentivize specific actions. Airstack facilitates the publication of REWARDS by providing frames and actions, and organizations can either use Airstack’s no-code tools or develop their own REWARDS systems using the Moxie protocol.

PAYOUTS for earned REWARDS are issued automatically by the Moxie smart contracts. At launch, PAYOUTS are allocated as follows: 50% to the member who earned the REWARD, 20% to the Fan Token Bonding Curve Smart Contract for the member, 20% to the Fan Token Bonding Curve Smart Contract for the channel where the REWARD was earned (if applicable), and 10% to the Fan Token Bonding Curve Smart Contract for the network. This allocation mechanism is designed to increase the price of the next-purchased Fan Tokens by paying the earned amount into the bonding curve and burning the respective amount of Fan Tokens.

For example, if a Farcaster member zoz.eth earns 10 $MOXIE, 5 $MOXIE is given to zoz.eth, 2 $MOXIE is used to buy and burn Base channel Fan Tokens, 2 $MOXIE is used to buy and burn zoz.eth FAN TOKENS, and 1 MOXIE is used to buy and burn Farcaster Network FAN TOKENS,. Developers can also program other PAYOUT splits depending on the use case, offering flexibility in how REWARDS are distributed across different actions and participants.

Devs can also program other payout splits depending on the use case.

For example, users or communities might decide to allocate a % of earnings or rewards to certain causes or charities

Airstack's Moxie Protocol exemplifies the potential of decentralized technologies to transform social networks by prioritizing user agency and economic empowerment. Through its comprehensive suite of features, the protocol not only enhances the creator-fan relationship but also sets a new standard for interactive and rewarding digital experiences.

We believe that Airstack have thoughtfully created the needed additional layer to coordinate growth for Farcaster. Just as Frames propelled Farcaster into Q1 24. Moxie will take the batton and fuel explosive growth in Q2

HAPPY CASTING!