I had an insight recently — Farcaster is not a random application layer outlier. It is the trailblazer in a category of “protocols that will replace companies” (need a better name for this). 

Jack Dorsey’s original vision for Twitter (Twitter JV if you will) was for it to be a protocol. Unfortunately, the tools weren’t available at the time to realize this, so it ended up at the local maxima of what was possible — a successful company.

This isn’t a new concept and projects before Farcaster have tried this. Crypto oldheads will remember Steemit and DLive, which were trying to be decentralized versions of Reddit and Twitch, respectively. However, it was too early back then to build these apps because the infra layer was so immature. The plumbing hadn’t hardened enough to allow these products to cross the chasm.

Now, the infra is more ready than ever and the time is right to try again. Much like Webvan walked so Instacart could run, we’ll play back the same pattern from web2 in web3.

That said, not all the infrastructure is built out yet, which is why Farcaster and the Merkle team have a challenging lift ahead of them. They have already had to come up with off-chain architectures like Hubs because onchain storage isn’t ready yet. They also need to consider deeply where they will host key primitives like the identity system, as choosing the wrong base layer could be a death knell.

But they will blaze many of the trails for protocols to come and will also pioneer many of the picks and shovels, as will adjacent companies like Hypersub. Together they’ll give us a robust set of primitives like a social graph, auth, subscription gating, etc.

What this means hopefully is that we are about to see a wave of new protocols that were temporarily companies — eg. YouTube, Shopify, LinkedIn, etc. Each will have their own set of challenges that are unique to the specific vertical they choose. I suspect the best projects will be judicious with their early designs, and not try to decentralize too much. They’ll pick conservative architectures that allow flexibility to progressively decentralize in the future, but offer enough of a value prop to win users now.

The benefit of launching now is that the crypto-native audience or onchain userbase is large enough to build a real business. There is a thriving segment of users that want to pay with crypto and care about the ideological values of protocols over companies. This is a moat! Centralized companies (YouTube et al) cannot adopt crypto-native features the way they can adopt AI features because crypto is still brand-unsafe and kludgy. Normal audiences will be repulsed, and they cannot sacrifice their existing user base for a much smaller TAM. But new projects, lacking that baggage, can build the best product for crypto-natives.

This is very exciting to me as I’ve long been tired of seeing this industry launch yet another blockchain. It’s app szn and the time has come to begin transmuting essential digital services that are currently companies into their final and best form — protocols.