A reminder, what and why is Farcaster?
Farcaster is a sufficiently decentralized social protocol with a currently dominant Twitter-like client called Warpcast. I see Farcaster's raison d'être as threefold: 1) unruggable for builders, 2) unruggable for users, and 3) the combination of social and crypto commerce has the potential to 10x UX and CTRs on transactions. There are a couple of other alternatives like Lens, but I find Farcaster far more interesting to use.
I was the 1277th person to join Farcaster when I did so in August 22' but they didn't earn the spotlight until earlier this year. The release of Frames, making it possible for devs to build apps in casts (aka tweets), created a fervor of builder energy that culminated in the first spike in user growth seen below to around 50K DAUs.
What was nature of the conference?
This past week (May 2-5), the Farcaster team and community (including myself!) convened in Venice for Farcon, to reflect, celebrate, and envision.
Unlike traditional conferences, Farcon felt like a meeting of friends. Attendees donned their Warpcast avatars around their necks on conference passes powered by Icebreaker. The conference was titled 'URL -> IRL,' and naturally, I had a ton of fun learning the physical faces behind the digital friends I've made over the last couple of years. For example, I was greeted at the door to the venue by Tayyab, who is now working on Icebreaker and therefore manned the entrance. 'I know you,' he said with a smile, setting the tone for the rest of the event.
Inital words from Dan and Varun about Farcaster direction.
I arrived early Thursday morning, and the conference kicked off with a keynote address from founders Dan and Varun. They discussed their top three goals: grow with crypto, create cozy corners, and make more Legos. For me, the greatest learning was the importance Merkle places on the importance of cozy corners, meaning Channels. There was lots of discussion, not all from Dan and Varun, about how these should become multi-million-dollar businesses. Dan spoke about how they intend to build and iterate on tools to empower Channel hosts, and how he plans to move Channels from client-level to protocol-level in the near future.
Farcon was "Base"d.
Next to Farcaster, there was a large presence from Base and the Coinbase team, who have really been on a tear and are incredibly synergistic with the Farcaster ecosystem. The two projects combined have reinvigorated fresh hope in the potential of social blockchain. Jesse, the founder of Base, reminisced on how it's only been eight months since the 'blue-dot launch' of Base. Shocking to consider. Base already has several million monthly transacting users, and practically everyone on Farcaster is building on Base. Jesse discussed Base's four goals: a powerful dev platform (qMTB, quality monthly transacting builders), a vibrant ecosystem (qMTA, quality monthly transacting accounts), liquidity (assets on platform), and decentralization and scaling (less than 1 second and 1 cent).
The most exciting very recent development from Coinbase is Smart Wallets, and Jesse discussed and demoed them at length. Smart Wallets are like Single Sign-On (SSO) for Web3 and are a dramatic improvement in UX for onboarding and ongoing on-chain transactions. They do away with the burden of passwords and seed recovery phrases by leveraging passkeys for authentication. For example, your fingerprint on a MacBook or your iPhone's FaceID. They importantly enable you to authenticate in-app, instead of having to leave to a mobile wallet app or chrome extension. They enable payment via Coinbase account just in time on the smart wallet and will eventually support paying via bank account or credit card. They also enable Merchant paymasters for gas fees.
00:00 Smart wallets with @jeffhino
1:15 Building the future of wallets
1:58 Today: too hard to get onchain
3:15 How to make it easier than ever
4:36 Shortening a…
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Related but different, Coinbase Commerce powered the Coffee and Gelato stations, which was also a delightfully simple experience.
An important disucssion : how will Farcaster monetize, and where will value and moats accrue to stakeholders?
One of the most interesting discussions is taking place in conversations online and 1/1 as well as at a small panel called Building with Onchain Social Graphs, led by Abi from Zerion. Other panelists include JP from Frens, Woj from Supercast—the second largest Farcaster client after Warpcast—and Lucas from Pods. Specifically, it is a strategic conversation about moats and value accrual for Farcaster, Warpcast, and other apps built on it. The big question is: Is Merkle building Warpcast or Farcaster? And even if they build Farcaster, where do the value and moats exist for app builders?
Woj believes values will accrue to the app-layer. JP and Lucas questioned that. JP highlighted how excited he is about the possibility of dramatically improving app adoption through one-click Farcaster authentication, leveraging the social graph in the app's context to bootstrap value, and benefiting from alignment with and virality of the network. Drakula is the best recent example. However, he also mentioned he has questions about the defensibility of such an app strategically.
One viral tweet by 0xDesigner continues this discussion. Ultimately, the argument boils down to: how will Farcaster monetize and how does that impact business prospects for app builders and users? Social networks like Meta and Twitter advertise to eyeballs on their apps. If Farcaster monetizes that way, then they will need their client to win, which will hurt other app builders. If, however, they can monetize at the Protocol level, then they will be incentive-aligned with builders. The way to do that will likely be Token Incentives, although I'll point out I haven't heard commentary first-hand on that from Dan or Varun specifically. There are several other options I can imagine like transaction fees, as well as by leveraging Warps as a primary currency and taking a spread on the mint of new Warps. I suppose then Warps is effectively the Token. Re: transaction fees, at the risk of getting ahead of my technical prowess, I suspect this could be implemented at the Protocol Level or Client Level, but it's the former that would contibure to decentralizing the network. It will be interesting and important to watch how this plays out.
the protocol wants to compete and win at the client level.
clients want to win and avoid being dependent on the protocol.
all roads lead to winner take all.
what’s the point?
I'll point out that Dan consistently points out that the reason for such heavy investment into Warpcast is simply that what builders need most is users, and they can't expect other app builders to solve the user problem for them. Therefore, they are executing product-led protocol development. Ultimately, he hopes that other clients take share, but that it will take some time before that happens in a big way.
Can you even write a blog post without reminding how early we are?
I was really excited when transactions came out and expected to see huge usage, but the reality so far has fallen short of my expectations with only a couple million USD transacted so far. Dan addressed that at the conference, pointing out that the issue is that mobile transaction UX is still too many steps. Dan pointed out that you can see it in the numbers. If I recall correctly, he said that while 85% of their usage is mobile, only 15% of their transactions are mobile. So he expects it will take half to one year for them and others to remove steps and friction.
Overall, it's clear we're very much still in the infrastructure stage of DeSci (and of course, Crypto too) and it's evident in the goals of Farcaster and Base. Lots of experiments in consumer crypto but nothing operating at large scale yet. One experiment I particularly enjoyed was Bracket.Game, which enabled folks to bet on the outcome of the conference Pickleball game (like I said, this felt more like a meeting of friends than a conference!). Ultimately, the combination of Base for infrastructure and the Farcaster network for distribution pave the way for accelerating experimentation and possibility.
Onwards and Thanks!
I leave with continued excitement about the Farcaster Protocol and appreciation for the Merkle team that's building it out, and for all the friends I've made there—new and old.
This is my first Paragraph post so if you enjoyed this article, please share on Farcaster and/or Twitter/X. Here's my profiles on those platforms (Farcaster, Twitter/X).
