Breaking Down Walled Gardens: Farcaster and Decentralised Social Media

In today's digital ecosystem, users find themselves confined within 'walled gardens' characterised as closed systems under the strict control of monolithic entities. These so-called digital platforms hold sway over user identities, data, and even the relationships between users, unilaterally setting rules for participation and developer interactions. Such centralised control erects formidable barriers against competitors and innovators in general. It enforces high user switching costs, is extractive and rent-seeking, and sometimes wields power comparable to governments.

Dominant digital platforms retain the sole capacity to modify, monitor, and selectively promote or censor information. They can access private messages, censor or elevate content, and even impersonate users. Despite assurances of transparency and user interest, the ultimate trust lies in the belief that those in power will not misuse private data or suppress dissenting voices. The spread of misinformation, driven by engagement-focused algorithms, erodes public trust. In a democratic society where the press is considered the 'fifth estate', entrusting speech control to centralised bodies, regardless of their intentions, poses a significant threat.

Social media has become a pivotal force in shaping contemporary narratives. It can influence public opinion, drive political discourse, and even impact global events. The authority wielded by these platforms has frequently sparked controversy as they face allegations of censorship, bias, and manipulation. This influence was evident during the “Arab Spring” when platforms like Facebook and Twitter played significant roles in mobilising protests and disseminating information, challenging authoritarian regimes across the Middle East and North Africa. Another example would be the “Rohingya crisis” in Myanmar.

One approach to enhancing the present state of social media is decentralisation, which entails converting centralised platforms into distributed networks comprising multiple independent nodes. Such a substantial shift necessitates a ground-up revamp of the existing architecture that is able to facilitate peer-to-peer interactions and collective content management. This change aims to disperse control and authority across a broader network while distributing value created by the platform, potentially leading to a more diverse and resilient range of social media interactions.

The decentralisation of social media is gaining traction as a response to increasing concerns over censorship, privacy, neutrality, user control, and malicious activity on centralised platforms. Decentralised social networks operate on independently run servers rather than on a centralised server owned by a single entity. The decentralised design grants greater autonomy and control to both users and independent developers, influencing the network's functionality and the types of content allowed.

The concept can be likened to the analogy of the Cathedral versus Bazaar in software development. The Cathedral model is a centralised effort where a defined group of developers, or even a single one, is developing the software. This approach is more controlled and structured, reducing the scope of collaborative innovation. On the other hand, the Bazaar model is open and collaborative, with many people tinkering with the source code without central control. This method leads to rapid experimentation, innovation, and network stress-testing, as it allows for contributions from a diverse group of individuals.

Web3 brings forth many benefits for the realm of social media, tackling critical issues that are inherent in centralised systems:

• Reduced Censorship and Control: Decentralisation significantly curtails the risk of censorship and control by any single entity. In a decentralised network, no central authority wields the power to censor content or control the flow of information unilaterally. This paves the way towards a more neutral, less opinionated media landscape where diversity of thought can thrive. Users can express their views without the fear of being silenced by the platform's owners, which is crucial for upholding freedom of speech and fostering open discourse.

• More Equitable Value Dispersal: The value generated by creators and user interactions is typically monopolised on traditional social media platforms. Decentralisation alters this dynamic by opening up the design space for incentives to be more equitably aligned between all the stakeholders in the ecosystem who play an integral role in the success of these platforms.

• Portability & Open Social Graph: An open social graph in a decentralised system means that user relationships and interactions are not confined to a single platform. Instead, they are permissionlessly available, enabling greater interoperability between different services and applications. This can lead to a more connected and seamless user experience while fostering innovation as developers can build upon an existing network without restrictions.

• Data Ownership: One of the most significant advantages of distributed social media protocols is that they can give users ownership and control over their data. Unlike centralised platforms, where the company owns the user data, decentralised platforms can allow users to retain control over their personal information. This enhances privacy and enables users to decide how their data is used and potentially monetise it if they choose to. This also introduces the idea of "ownership of audience", much like an email newsletter, where the creator, not the platform, owns the relationship with their audience. This starkly contrasts centralised platforms like social media giants, where users may have thousands of followers but essentially "rent" access to their audience from the platform. 

• Composability and Modularity: Decentralised networks are often modular in design, meaning that they are composed of interchangeable components. This allows for greater flexibility and customisation, as users can choose which modules to use or even develop their own. Modularity also facilitates the platform's evolution, as new features can be added or outdated ones removed without disrupting the entire system.

• Transparency: Transparency in social media is a critical issue, and while decentralisation can contribute to increased transparency, the open-source ethos upon which the decentralisation narrative is built truly fosters this transparency. In a decentralised network, the algorithms that govern what content is shown to users, such as shadow banning and promotion of posts, can be open source. Decentralisation often necessitates open source because it distributes power and decision-making across a network of participants, eliminating unnecessary intermediaries and enabling greater autonomy and transparency.

Integral to every decentralised social network is a 'protocol', a shared language that ensures interoperability among different apps and services. These protocols can be likened to public infrastructure, similar to roads and sidewalks that facilitate movement between various destinations. Decentralised social media platforms are built on distributed architectures, where control and decision-making are shared among participants rather than being centralised in a single entity. Protocols are typically managed by core teams, often mission-driven non-profits, responsible for setting standards and ensuring a balanced, inclusive governance system.

Decentralised social media protocols are undertaking a variety of diverse approaches to data storage and identity handling:

• Federated Protocols: Examples include Nostr, ActivityPub and AT Protocol, which enable servers to communicate with each other. Users or organisations can host a server, although technical know-how is required, leading most users to join existing servers. Server administrators usually bear moderation responsibilities.

• Blockchain-Based Protocols: Farcaster and Lens use blockchain technology, particularly for the identity layer. It is a common misconception that all interactions are stored on the blockchain, which is not typically the case.

• Peer-to-Peer Approaches: Scuttlebutt (SSB) exemplifies this, where individual devices act as servers. This model is more suited to smaller networks or communities.

The Web3 social landscape can be segmented into four layers, though this representation is not exhaustive:

• Hosting Layer: Includes blockchains for running social applications and decentralised storage protocols for critical data.

• Social Primitives: These are the foundational elements representing individuals, their actions, assets, and relationships.

• Profile Layer: Wallets serve as digital passports, enabling users to carry their data across applications and forming the basis of their Web3 social profile.

• Applications: User-facing applications utilise a combination of blockchains, storage protocols, and social primitives. These can be categorised by interaction types: many-to-many (like Twitter), one-to-one (like WhatsApp), and one-to-many (like YouTube).

Farcaster, for instance, is a decentralised social network that exemplifies the innovative use of these layers to create a more interconnected and user-empowered online social experience. In the following sections, we will explore Farcaster in greater detail.

Farcaster stands at the forefront of digital evolution, embodying a decentralised protocol crafted explicitly for creating and interlinking social applications. Its core mission is to forge a censorship-resistant environment, empowering users with absolute control over their data and audience connections. This approach signals a shift from traditional social media dynamics, offering a new realm of social autonomy and user empowerment.

The architecture of Farcaster is built on a decentralised network, allowing users to maintain a singular social graph across multiple applications. Envision a platform where diverse social apps, analogous to Twitter, Instagram, and Facebook, coexist harmoniously, linked by a single decentralised identity. This structure ensures that users retain their identity and network connections, even if individual apps impose restrictions. It's a system designed to diminish the influence of centralised entities and return control to the users.

Farcaster's network is permissionless and open-source, encouraging developers to engage and innovate by integrating with its APIs and other applications. This accessibility fosters an environment ripe for enhancing software functionalities and elevating user experiences.

At its core, Farcaster differs significantly from centralised apps like Twitter. Registration on Farcaster is based on a private-public key pair, specifically an Ethereum address. The on-chain aspect of Farcaster is primarily concerned with identity, where users mint a unique Farcaster ID (FID) that serves as their permanent identifier within the Farcaster ecosystem. While the FID is often referred to as an NFT, it's important to clarify that it functions more as an identifier. Each account can have only one FID, as specified by the contract. This approach guarantees censorship resistance, as the FID is anchored on the Ethereum blockchain.

However, it's important to clarify what exactly this mechanism achieves. While it guarantees that a message can be published to Farcaster, it does not inherently ensure that all people can read the message. Suppose a moderation policy is implemented on Farcaster that filters out messages from specific FIDs. This would still constitute censorship at the application layer. This highlights a nuanced challenge within decentralised platforms: while they can offer mechanisms for censorship resistance at the protocol level, the application layer can introduce its forms of content moderation and control.

Content, including the social graph, is stored off-chain within the Farcaster network, operated by entities known as Hubs. These Hubs function similarly to Ethereum nodes, with anyone having the capability to run a Hub. They ensure a consistent view of the network by syncing and exchanging messages.

The first application built on Farcaster is “Warpcast”, a Twitter-like platform. However, the potential to extend beyond this is far-reaching, with the possibility of other social apps, such as Instagram, YouTube, or Substack, leveraging Farcaster's decentralised protocol. This system enables users to transfer their followers between apps, preventing apps from monopolising users' social graphs and facilitating novel experiences that merge social activities with on-chain data.

Farcaster's client-server relationship also sets it apart. Unlike Twitter, where a single client interacts with a centralised server, Farcaster allows for multiple servers, each offering diverse features. This unbundling of client and server reduces the risk of excessive power accumulation by any single entity, echoing the flexibility seen in exporting Gmail contacts to Outlook or moving assets between cryptocurrency exchanges.

The Farcaster protocol serves as the foundation, enabling developers to build competing clients on the same protocol. This approach is reminiscent of how different services, such as Substack and Mailchimp, are built on the Simple Mail Transfer Protocol (SMTP).

As a user-centric platform, Farcaster utilises the Ethereum blockchain to create a decentralised registry for user identities. Contrary to the need to generate a new wallet address, new users register a Farcaster ID (FID) with the Farcaster contract using their existing Ethereum address. This FID is linked to their username, and while it is unique and serves as a permanent identifier within the Farcaster ecosystem, it is not an NFT in the traditional sense as it is singular and non-transferable per account. This system minimises the need for blockchain interactions for everyday actions, improving the user experience by avoiding regular gas costs.

Farcaster's innovative approach to social networking includes three core layers: the Identity Layer, Data Layer, and Application Layer. The Identity Layer, based on Ethereum, manages operations and authorisation. The Data Layer stores authorised information, while the Application Layer consumes this data.

The protocol addresses several key challenges of decentralised social networks:

• Identity: Users maintain a consistent identity across applications through Farcaster IDs and usernames.

• Authentication: The authenticity of messages is verified through the sender's FID.

• Availability: User data remains accessible across various applications.

• Consistency: All applications adhere to the foundational rules set by the Farcaster protocol.

Farcaster's implementation of these solutions has led to the development of various applications, including Alphacaster, Discove, Jam, Opencast, Warpcast, and Yup. These applications leverage Farcaster's protocol to offer diverse, user-centric social experiences similar to traditional platforms like Twitter but with enhanced user autonomy and network portability.

• Application Integration with Farcaster: Applications developed on Farcaster interact seamlessly with Hubs, which are key components in the protocol’s architecture. These applications access, organise and categorise data stored on Hubs to offer tailored user experiences across various clients, facilitated by APIs. This system ensures a dynamic and diverse range of applications, each catering to different user preferences.

• Governance and Operational Standards: Farcaster operates on a governance model based on rough consensus and operational code. Changes to the protocol are driven by Farcaster Improvement Proposals (FIPs) that require approval from a broad spectrum of stakeholders, including protocol developers, application developers, and users. This consensus-driven approach ensures a democratic and collaborative development process without any single entity wielding dictatorial power.

• Social Ecosystem Partnerships: Farcaster’s network extends beyond its core functionality, encompassing various applications. This diverse range of capabilities includes user notification systems, Move-to-Earn platforms, social event notifiers, ecosystem metrics trackers, messaging applications, decentralised news platforms, and more. These applications enrich the Farcaster ecosystem, offering users an expansive range of services and functionalities.

• Sufficient Decentralisation: Farcaster achieves what is termed 'sufficient decentralisation' by ensuring that users can always find and communicate with each other, regardless of external constraints. This level of decentralisation is anchored in three key features: unique identifiers called Farcaster IDs (FIDs), posting messages under that name, and reading messages from any valid name. While Farcaster Names (fnames) are centralised and controlled by Warpcast, with the ability to revoke names on squatting, FIDs are permissionless and on-chain, offering a more robust guarantee of censorship resistance. Users can also associate their FIDs to an Ethereum Name Service (ENS) domain via proof, further integrating their social identity with the Ethereum ecosystem. This approach balances the need for decentralisation with practicality, avoiding the pitfalls of an entirely blockchain-based system that could lead to inefficiency and high costs.

• Scaling Networks and Decentralising Name Registry: One of the challenges in decentralising social networks is scaling. Farcaster addresses this by allowing users to select servers for storing messages and using public/private key pairs for secure and unique identification. Employing a hybrid off-chain/on-chain architecture allows the distribution of data storage across multiple servers, reducing reliance on a single centralised server and preventing bottlenecks as the network grows. Users can select servers for storing messages without increasing centralisation or infrastructure strain. Additionally, the protocol employs smart contracts to create a decentralised name registry, enabling users to associate their unique public key with a memorable username and a host URL. This system ensures that users can easily locate and communicate with each other, maintaining the integrity of their connections.

• Identity and Authentication: Farcaster introduces a robust identity and authentication system. Users have a numeric identifier controlled by a key pair, with identities registered on a Turing-complete blockchain. This setup allows for key rotation and recovery, ensuring security and flexibility. Messages are signed with the user’s key pair, ensuring tamper-proof and self-authenticating communication.

• Message-Graph and Applications: The Farcaster network is conceptualised as a message-graph representing the social network of users, their content, and relationships. This structure is maintained by Hubs that synchronise message-graphs using Conflict-free Replicated Data Types (CRDTs). This mechanism allows for consensus without the need for coordination, ensuring data integrity and consistency across the network. Applications built on Farcaster can range from simple mobile clients to more complex systems with backends interfacing with Hubs, offering users a variety of choices to suit their needs.

• The Hybrid Architecture of Farcaster: Farcaster’s hybrid architecture combines on-chain and off-chain systems. It utilises smart contracts on Ethereum for identity registry, storage leasing, and key management. Off-chain Hubs provide high-performance data streams, validating and replicating messages across the network. This architecture facilitates the development of diverse applications within the Farcaster ecosystem, enhancing user experience and networking capabilities.

• On-chain and Off-chain Architecture: Farcaster's hybrid model is strategically divided into on-chain and off-chain components to optimise security, consistency, and performance. On-chain actions, conducted via contracts on the Optimism Mainnet, are reserved for critical functions like account creation, data storage payment, and app key management. These actions are minimised to reduce costs and enhance efficiency. In contrast, the off-chain system, powered by a peer-to-peer network of servers known as Hubs, handles the bulk of user activities. This includes posting messages, following users, and profile updates. Off-chain activities prioritise performance and cost-effectiveness, leveraging on-chain signatures for security.

Hubs form a distributed network of servers essential for storing and validating Farcaster data, crucial for both reading and writing within the Farcaster ecosystem. They initiate operations by syncing with Farcaster contracts on the blockchain to recognise every user's account and keys. The process for a Farcaster message includes its creation, signing, uploading to a Hub, validation, and then distribution via gossip to peer Hubs.

Validation checks for a valid signature and compliance with protocol specifications. Storage conflicts, like duplicates or limit exceedances, are resolved using CRDTs for deterministic outcomes. Hubs distribute messages using the gossipsub protocol and ensure data integrity through periodic diff syncs with peers, achieving strong eventual consistency even after disconnections. However, messages may arrive out of sequence.

There is no need for Hubs to reach consensus among themselves on the content, as the on-chain components ensure the integrity and ownership of messages through cryptographic signatures. In cases where two Hubs have conflicting messages, the on-chain data can be used to verify the authenticity and origin of the messages, resolving conflicts based on the immutable records on the blockchain. Hubs also employ peer scoring to assess behaviour, maintaining network integrity by sidelining peers who fail to meet standards.

• Core Contracts on OP Mainnet: Farcaster's on-chain functionalities are anchored in three main contracts deployed on the OP Mainnet:

• The Id Registry is responsible for registering, transferring, and recovering Farcaster accounts.

• The Storage Registry manages the rental of storage space for accounts.

• The Key Registry allows accounts to issue keys to apps for message publication.

• Farcaster Hubs - The Off-chain Backbone: Hubs form the crux of Farcaster's off-chain system. These distributed servers store and validate Farcaster data, syncing with both on-chain data from Ethereum and off-chain data from other Hubs. They play a crucial role in reading and writing data to Farcaster, and their accessibility allows anyone to run a Hub on various platforms.

• Data Lifecycle and Validation: The journey of a Farcaster message is a testament to the protocol's robust design. Once a user creates and signs a message, it is uploaded to a Hub, which validates its authenticity and compliance with message type requirements. Following validation, the message undergoes conflict checks and is stored in the Hub.

• Data Replication and Consistency: Hubs employ a two-phase process – gossip and diff sync – to ensure data replication. This system, based on the gossipsub protocol, is complemented by periodic syncs to capture any dropped messages. Despite the potential for out-of-order message delivery, Hubs maintain strong eventual consistency.

• ENS Names and Usernames: Farcaster integrates ENS names as human-readable account identifiers, supporting both off-chain ENS names (Fnames) and on-chain ENS names (e.g., @alice.eth). This dual approach caters to user preferences for control and personalisation. Fnames offer a free but regulated option, while on-chain ENS names provide complete user control at a cost.

Farcaster recently introduced a major feature called Farcaster Frames. A Frame is a standard designed to enhance user interaction by seamlessly integrating external content within the app's interface. It turns casts into interactive mini-apps within Farcaster. Frames blend static or animated visuals with interactive elements. This allows users to interact with various external links and applications without exiting the app. These interactive buttons, upon activation, dispatch a POST request carrying a signed payload, facilitating a range of dynamic user engagements. Central to Frames' operation is the EdDSA authentication system provided by Farcaster, ensuring a seamless and secure user experience across various platforms without necessitating application switches, thereby circumventing potential mobile operating system issues related to deep link redirects.

• User Experience (UX): Frames are inherently supported across all Farcaster clients, including Warpcast and Supercast, leveraging the EdDSA system. This integration allows users to interact with Frames directly from their feed with a simple tap, enhancing overall user engagement without the need for additional applications.

• Security: By avoiding using ECDSA keys, Frames significantly reduce the risk of wallet drain. Furthermore, as they are cryptographically signed, they cannot be spoofed.

• Composability: The EdDSA key corresponds to the user's FID, making it straightforward to pull in all the user's social graph context. This is why token-gated Frames for minting and revealing content are already visible.

The introduction of Frames has led to a significant increase in Farcaster's Daily Active Users (DAU), with developers rapidly adopting the platform to integrate native crypto functionalities like NFT minting and gaming. This surge in adoption shows Frames' potential to bridge the gap between separate, siloed experiences, offering a unified and immersive user experience. Farcaster is actively developing enhancements for Frames, focusing on features such as text input, on-chain transactions, and improved privacy measures.

Farcaster, a nascent platform in the realm of decentralised social networks, is fostering a vibrant ecosystem of diverse applications, each catering to different facets of digital interaction and online community building. Below, we outline a couple of the exciting applications that are utilising Farcaster in unique ways: 

• Warpcast: A Social Networking Pioneer 

Warpcast is a flagship application in the Farcaster ecosystem, mirroring the user interface of traditional social networking sites like Twitter. This Web3 app, accessible via mobile and web browsers, allows users to share posts (casts), engage with others, flaunt their NFT collections, and seamlessly integrate their on-chain activities into their social feeds.

• Paragraph: Revolutionising Newsletter Publishing 

Paragraph reimagines publishing in the decentralised world. Drawing inspiration from Substack in the Web2 space, it enhances user experience with extensive customisation options, automated email workflows, in-depth analytics, and collaborative tools for teams. Its unique offerings include minting, NFT memberships, token-gating, and direct integration with the Farcaster social graph, unlocking new avenues for content monetisation and audience engagement. When users sign up with an Ethereum wallet, Paragraph immediately taps into their Farcaster network to recommend newsletters from their connections. It allows users to subscribe to their followers' newsletters, view a feed of their followers' long-form content, and access trending posts shared within the Farcaster community. Paragraph also aggregates discussions from Farcaster directly onto the relevant newsletter posts, centralising conversations and enhancing engagement. The Paragraph team recently integrated Farcaster Frames to streamline the newsletter experience, offering users a one-click subscription to newsletters, and users can read the post directly from their Farcaster feed.

• Kiwi News: A Community-Driven Crypto Media Platform 

Kiwi News has emerged as a crypto-focused media dApp where community participation is centred around an NFT pass. Users can share and vote on a plethora of content, such as podcasts, news articles, and videos. Kiwi News, available as a web extension and app, offers an ad-free experience devoid of social noise, emphasising community-curated content.

• Wield: Making Crypto Exploration Fun

Wield is a wallet that offers a unique club membership model, enabling users to earn rewards through crypto transactions. It leverages the Farcaster Layer 2, Cast, for efficient message submission to a federated, open-source Hub. This approach eliminates on-chain storage fees and Farcaster ID fee requirements. Farquest and Cast are applications built on the Wield platform that enhance the Farcaster protocol experience. Cast is a prominent Farcaster client with roughly 15,000 daily active users, while Farquest gamifies the protocol, allowing users to explore it in an RPG style and earn rewards.

• A Suite of Utility-Oriented Applications 

The Farcaster community has developed a series of utility-focused applications, including:

• castRSS: Integrating a user’s Farcaster activity into other applications.

• Launchcaster: Enabling users to discover the new web3 projects.

• Fardrop: Enabling users to create an allowlist based on followers.

• RequestCaster: Serving as a public forum for product and feature requests.

• Sharecaster: Enabling users to make preview-friendly links to casts.

The graph provides a view of user registrations for the protocol. Initially characterised by a modest uptick in registrations, the graph delineates a marked escalation post-July 2023 as it marked a significant pivot to a permissionless paid subscription model. The narrative above the graph is imbued with a sense of expectancy for 2024, reflecting the bullish stance on the future trajectory of user engagement with the protocol.

These graphs offer a granular view of the dynamics of interaction within the Farcaster community, highlighting content-sharing patterns and the corresponding engagement levels across different types of casts. The first graph tracks three key metrics: links, reactions, and casts. Peaks in the graph suggest sporadic surges in activity, with notable spikes, particularly in the reactions component, which indicate viral content or events prompting increased user interaction.

The total reactions of casts after 24h graph provides a breakdown of the volume of reactions received by casts within 24 hours of posting. It's segmented into reaction ranges, such as 0, 1-5, 6-10, all the way to over 100 reactions, showing the distribution of engagement across posts.

The data points from this dashboard paint a clear picture of a platform on the rise, demonstrating substantial and growing engagement. The total of 2.8 million casts by 306,000 users signifies a robust and active user base. The weekly and monthly active casters, at 49,000 and 53,000, respectively, further highlight this healthy recurring engagement and are indicative of a platform that users return to regularly.

The user growth rate of 11% and the high Gini Index of 90 suggest a concentrated level of activity among a smaller subset of users. This could be interpreted as a core, highly engaged community driving the platform's interaction, a common trait in emerging platforms.

The heatmap's representation of weekly cast activity offers valuable insights into user behaviour patterns, showcasing the times when engagement is most intense. This data could be instrumental in targeting peak activity periods to launch new initiatives or features.

The 'Users According to Casts' pie chart and the 'Continued Engagement' metric underscore the platform's success in attracting and retaining users over significant periods. The segments showing engagement for one week, two weeks, one month, and over three months confirm a sustained interest, a crucial factor for long-term growth.

All these statistics collectively indicate that Farcaster is on the right path when it comes to building and expanding its user base.

Farcaster’s ascent is contoured by notable challenges and adoption barriers, particularly regarding user experience and the broader perception of decentralisation. This task is complicated by the existence of multiple clients, each with its own slightly tweaked UI, which is a crucial factor for achieving wider adoption. This technological chasm potentially deters mainstream users, who may value interface familiarity and content richness over the nuances of the underlying technology. A pertinent debate in this context is the public’s valuation of decentralisation and censorship resistance. While appealing to a privacy-conscious demographic, it remains unclear if the average user prioritises these aspects over convenience.

Furthermore, the discourse on whether absolute decentralisation is the end goal or if a semi-centralised model of moderation, akin to recent evolutions in platforms like Wikipedia, might be more palatable, is increasingly relevant. Farcaster, for instance, adopts a sufficiently decentralised approach to reap the benefits of decentralisation while retaining the ability to scale and combat spam. This hybrid approach offers a balanced juxtaposition of user autonomy with responsible content governance.

As Farcaster scales, maintaining the integrity of its user base and community culture presents another hurdle. The platform's ethos of fostering a friendly and innovative digital milieu must withstand the pressures of growth, ensuring that expansion doesn't erode these foundational values. Farcaster also faces stiff competition from not just entrenched Web2 entities but also other protocols building on SocialFi in Web3, making market penetration and user conversion a formidable task.

Overall, decentralised social media platforms, such as Farcaster, Mastodon, Minds, and Lens, offer various advantages over traditional centralised platforms, including user control over data, censorship resistance, and increased privacy. However, they face significant challenges in gaining widespread adoption, such as:

• Complex User Experiences: The onboarding process for decentralised platforms can be cumbersome, involving cryptocurrency transactions, wallet installations, and understanding new protocols.

• Difficulties in Scaling: Decentralised platforms often struggle to build a critical mass of users, essential for a social network’s success.

• Fragmented Landscape: The decentralised ecosystem can be harder to navigate than centralised platforms, leading to a retention problem.

• Lack of Moderation: The absence of centralised moderation can result in the spread of misinformation, cyberbullying, and criminal activity.

As the application layer on top of decentralised social media protocols increasingly gains traction, the influence that large applications can amass over the underlying protocol becomes an essential but often overlooked topic. Large applications can significantly steer the protocol’s development decisions, much like Gmail's local policy changes can impact all other email providers, even within a decentralised email protocol. For a decentralised protocol to remain truly democratic and resistant to the influence of large entities, it must either have mechanisms to enforce rules against a large entity or support a competitive environment with a multitude of players that prevent any single one from forcing changes unilaterally.

As we peer into the future of decentralised social media, we stand on the brink of groundbreaking shifts poised to fundamentally transform how we interact online. These advancements herald a new era where our virtual experiences are not only more engaging and personalised but also crafted within a framework that champions user autonomy and collective governance.

Decentralised social media protocols will enable a wide array of secondary innovations. Exciting areas that we are looking into are games and commerce. Prospects include the development of games that leverage user engagement and wallet activity. These could echo the early days of Facebook gaming but without the notorious spam issues. The commerce aspect is equally promising, with opportunities to purchase NFTs and access specialised services directly through Farcaster. Importantly, these developments on Farcaster come without the risk of situations like Zynga vs. Facebook, where complementary solutions built on top of centralised platforms can suddenly turn into competitors, highlighting the platform risk associated with centralised platforms.

Although decentralised content moderation also requires a delicate balance between freedom of speech and preventing abuse, the difficulty lies in distinguishing between acceptable and unacceptable content, a task complicated by cultural differences and subjective interpretations. While no universally agreed standard of acceptability exists, democratic processes, such as those employed by Wikipedia editors or federated social networks, offer models for decentralised content moderation that are not controlled by private entities. The future of decentralised social media may involve a democratic approach to content moderation, where users decide what is acceptable through debate and deliberation, supported by technical tools and automation. This governance should be based on ethical principles, democratic control, and accountability, moving beyond simplistic censorship resistance or dictatorial administrative powers. Currently, these functions are often bundled together in a single entity, leading to issues of bias and lack of neutrality. 

The intersection of social media and artificial intelligence (AI) has been an active topic of discussion primarily due to how AI algorithms utilise user data to target ads and content. Twitter and other social networks have leveraged AI/ML models to analyse vast amounts of personal data, tailoring user experience and personalising content and advertisements. This raises concerns over privacy and data ownership as these models are trained on the users’ data, yet they don’t belong to them. Decentralised social protocols introduce a fundamentally different dynamic where users own and control their social graphs. Users can “mint” posts and content, build their own “on-chain content collections”, and support content creators through microtransactions. In the context of recent developments in AI, decentralised social models offer a unique advantage for users to train their own AI models on their own data. As Fred Wilson discussed in his recent article, users’ on-chain collections can serve as personalised data sets for training these AI models. This allows for highly personalised AI experiences, as the models are trained on data directly relevant to the user, and it respects user privacy because users can decide when and how their data is used.

A more modular approach, where different aspects of the platform are managed independently, could help address these issues. This would involve separating the baseline protocol, which should be neutral, from the moderation layer, which could be tailored to the needs and preferences of different user groups.

In the broader context of decentralised social media, this modular approach could lead to more neutral "public town squares" while still allowing for effective moderation. This would make the end-user experience more valuable, meaningful, fun, and useful, as well as "appropriate" by filtering out harmful actors and posts.

Farcaster's expansion into broader functionalities is notable. This includes implementing verification mechanisms for genuine user giveaways and allowing Farcaster accounts to be used for logging into external applications, thus enhancing ecosystem connectivity. Despite being in its infancy, Farcaster is showing immense potential and generating excitement reminiscent of the early days of platforms like Clubhouse. Its focus on building a Web3-centric, creator-focused culture is evident. As Farcaster continues to grow, the questions about the scalability of its quality user base will become increasingly important. The platform's commitment to fostering friendly, optimistic, and innovative online spaces distinguishes it in the digital landscape. Despite facing market challenges, its strategic vision and unique approach to decentralised social networking inspire optimism and anticipation for its future developments.

Web2 platforms, having matured over time, are bolstered by strong network effects but simultaneously challenged by numerous deeply rooted design problems. In contrast, Web3 social media platforms are nascent and often face criticism for their less polished user interfaces. Yet, they embody the promise of a better and more equitable future, aiming to dismantle the 'walled gardens' of traditional social media. As this new era of social media unfolds, it will be shaped by the collective efforts of its users and the ethical frameworks they establish, striving to create a more transparent, accountable, and inclusive digital ecosystem for all without the redundancy of past models.

We’re incredibly excited to see the emergence of new models and primitives in this sector. If you're in the process of creating or planning to develop something innovative in the new era of Social, please don't hesitate to get in touch with us.

We would like to express our sincere thanks to Anthony from Seed Club Ventures, JC & Nico at Wield and Katie from Archetype for their invaluable feedback on this report.

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