Built on top of decentralized protocols, the fast-growing vertical of Web3 social applications promises a solution to the rampant value extraction interposed by the current leviathans of the internet. Open social graphs — the digital mapping of connections formed between you and your internet friends through interactions such as follows, likes, and replies — present an opportunity for freedom from our modern day feudalistic web. These webs of relationships are essential to social platforms as they power content discovery, user engagement, and network growth. By freeing them from today’s walled gardens, open social graphs will allow users to reclaim ownership over their digital identity and reputation, and developers to permissionlessly build new social spaces and experiences.
Still, people endlessly debate the shortcomings of Web3 social — the bulky UX, the speculative spam, the rampant bots. Astute observers have also pointed out a more serious flaw rooted in the foundations of this emerging ecosystem: the lack of meaning and culture for its users. This issue has engendered claims that blockchain-based social apps are uninspiring — aligning with more general criticism of the wider crypto industry, which highlights the predominance of transactional and mercenary behaviors that, while boosting user acquisition, often fails at meaningful user retention.
In this essay, I highlight one novel onchain activity that is forming part of the solution: tipping. Within the world of Onchain Social, tipping is a lot more than the transfer of financial value. I argue that tipping — reframed here as onchain gift giving — can add social context and complexity to user interactions and expressions, thus strengthening the open social graphs upon which the future of this space will be built.
Altogether, the benefits of onchain gift giving — from improved user retention and token distribution, to richer content curation and internet culture — have the potential to help foster the environment necessary to build sustainable, long-term decentralized social networks.
“Onchain Social” vs. “SocialFi”
Even within today’s hyper-competitive, digital attention economy, the current slate of Web3 social apps has proven successful in capturing user attention through the integration of financial primitives. Two prominent examples include Friend.tech and Pump.fun, which integrate bonding curves to enable users to trade platform-specific assets and permissionlessly issue memecoins, respectively.
These apps, which leverage financialization to engage users and bootstrap social graphs, comprise the category termed “SocialFi.” They provide opportunities for creators to more directly monetize their social capital and audience, and users to speculate within a social environment.
While I find the current implementation of decentralized financial mechanisms within SocialFi interesting, I don't see enough attention paid to the quality of the social interactions that take place on these platforms — activities that determine the quality of the social ties, and ultimately the quality of the social networks, that form within them.
Meanwhile, the bar for transacting onchain within a second category of apps — apps which belong to the “Onchain Social” category — has been forever raised. With new integrations Frames and Open Actions, users can execute external onchain actions directly in these apps built on top of underlying open-source protocols, Farcaster and Lens. These innovations, among others, are beginning to power a wider range of onchain experiences, social interactions, and expressions of culture.
Given this opportunity, it’s time to consciously consider the onchain behaviors, such as tipping, that continue to shape the foundation of the Onchain Social space. Only by leveraging the full capabilities of this technology, rather than focusing solely on the exchange of financial value, will these activities enable users to craft meaningful identities and connections — the essential elements of strong social graphs and resilient networks.
Onchain Tipping: Recovering Crypto’s Killer App
As the name implies, tipping involves distributing tokens to other users in exchange for a quality interaction or piece of content. I use the term “onchain tipping” loosely here, as recipients typically receive points that are then converted into and claimed as an onchain token at the end of designated periods.
At a glance, tipping resembles nothing more than a financial transaction similar to a traditional micropayment. And yet, I believe that this behavior creates and directs more than just monetary value.
The most prominent examples of tipping have been implemented within some of the largest Onchain Social apps — Warpcast (built on Farcaster), Orb (built on Lens), and Zora (an Ethereum L2) — via the $DEGEN, $BONSAI, and $ENJOY tokens, respectively.
While users of these apps tip for multiple reasons, such as to reward creators and farm airdrops, tipping taps into the inherent human desire for social proof — that is, proof of taste, proof of recognition, and proof of belonging. Simply put, users tip to send social signals of the content they’ve discovered and appreciated, and thus, the content others should discover and appreciate too.
Then, how does tipping— which I conceptualize here as onchain gift giving — expand and enrich the traditional follow/like model within today’s dominant social media platforms?
While the act of tipping is typically done through replies and comments that detail the amount and type of token to be transferred, I’d argue that this act of gift giving is more intentional than a simple like or positive comment because tipping allocations are relatively scarce. And in addition to supporting the traditional engagement model, tipping in a wide variety of tokens on top of a decentralized public ledger enables both the transfer and ownership of social, cultural, as well as financial value. The tipped tokens route payment directly to creators and, as they are accrued by individual wallets, contribute to the group identities and interests that comprise early Onchain Social communities. This process of value exchange and shared ownership cultivates onchain subcultures within decentralized social networks, while also providing monetary reward for those involved.
Good examples of this include the $DEGEN and $ENJOY channels within both Warpcast and Zora, as well as the token-gated $BONSAI club on Orb, all of which gather holders of these tokens and curate the content they, well, enjoy. Similarly, Wildcard.lol has a “most tipped feed,” where tips mirror the functionality of Reddit’s upvotes to surface the most quality and engaging content as determined by users. Another interesting example is Ham.fun, an ecosystem of social connections created by tips denominated in various memecoins and social tokens. The tips are enabled on both Warpcast and Twitter, the amounts of which are claimable on Ham’s layer 3 blockchain.
In this way, tipping enables users to craft onchain histories and social graphs — their identities and connections — based on a variety of different vectors, such as shared interests and experiences.
This capability represents a reversion to crypto’s original killer app: internet-native rails for the permissionless exchange of value. But for me, this was never just about financial value. Blockchains and crypto allow for new ways of exchanging multiple forms of value between communities and their members, as well as creators and their audiences, in a way present-day platforms do not.
However, builders must also tread carefully when integrating tipping functionality. Tipping culture has already inundated Warpcast with AI-generated posts trying to farm $DEGEN, reducing the quality of the content. Additionally, incorporating financial transactions within Onchain Social apps carries the risk of reframing social interactions as market ones, and turning close relationships into economic ones. Monetizing our relations runs the risk of eroding the unquantifiable values that bring us together, such as trust, shared interest, and appreciation, and turning every community into a profit-maximizing network.
While using financial games can be useful to bootstrap attention and an initial user base, financial value alone just doesn’t succeed at producing social environments rich in culture and meaning. On the other hand, onchain gift giving is a new tool that can inspire intentional, repeat and reciprocal transactions that transcend the monetary realm, as well as promote a more complex social environment. In fact, this is a role that gift giving has played in human societies throughout history, and most recently, within the evolution of the internet.
Gift Giving: A Sociological and Digital Phenomenon
The concept of gift giving, and the gift economies it spawns, has been well-documented by sociologists and anthropologists alike. Central to this literature is the examination of both the distinction and interrelatedness between social-communal relations and market-exchange relations. Marcel Mauss is perhaps the most cited academic to study the gift — the eponymous subject of his most famous work — and became canon in this field due to his analysis of the cycles of exchange structured around giving, receiving, and reciprocating.
In the context of collectives, gift giving has been shown to strengthen social relations, foster creativity, and build community — a quality that has featured prominently in the open-source software movement and the foundation of the internet. Open-source developers contribute their time and skills to create and share software freely, often prioritizing social relations and community well-being over individual profit — something Eric S. Raymond identified as the gift culture of open-source hackers, and Richard Barbrook termed the “Hi-Tech Gift Economy”. Giving away one's time, attention, and skills has even become an essential part of the business model of modern day digital capitalism. For the actors involved, it’s both crucial and rational to expect gifts to be returned as recognition, artistic pleasure, or connection to others, in lieu of immediate monetary reward.
First and foremost, the gift generates symbolic value for its participants, which they can then opt to leverage for future financial value. Accordingly, when gifting tokens within Onchain Social apps, the giver, receiver, and even the tokens themselves all accrue value based upon the identities of the participants, the transactions that occur, and the social context in which they take place — all of which are recorded by a blockchain. By connecting gift giving to an open social graph, the gifts (i.e. tokens) can then become building blocks of a shared, onchain social and cultural history that connects its participants in unique, meaningful ways.
Crucially, in gift economies, an individual’s motivations are complex — reflective of their desire for status, meaning, and belonging — when compared to the simplistic goals of profit-maximization within market exchange economies. In addition, gift giving is often directly attributable, particularly in an onchain setting where all transactions are transparent by default. As a result, onchain gift giving can promote reputation, self-expression, and social ties in a way that simply speculating on digital assets cannot — and the importance of which should not be overlooked in the context of social networks.
In the end, by enriching the social context of onchain transactions and online creation, I believe gift giving of this type will help produce the culture and meaning that will foster the Onchain Social apps that reach millions of users.
Conclusion: Towards the Future of Onchain Social
In carrying forward the concepts discussed in this essay, I’d like to end with a collection of ideas on how to leverage and extend the activity of onchain gift giving — that is, a list of recommendations to projects building in this space on how to potentially create more meaningful interactions and more resilient social networks.
Gift Giving as Curation: Make tip-powered social graphs more legible (i.e. who has given to whom, the frequency, amount, etc.) in order to surface content, creators, and curators according to a user’s subjective sense of quality, rather than an algorithm’s rigid calculation of engagement metrics. One way I see this playing out is through “tipping lists” — similar in concept to Drips Lists, which make software dependency funding more public.
Gift Giving as a Token Distribution Mechanism: Rather than turning to the one-time airdrops plagued by sybils and short hype cycles, get tokens into the hands of the more engaged and value-add users through continuous tipping allocations and onchain gift giving. Ceding more control and ownership over the token distribution process to community members could be integral to building psychological attachment into Web3.
New Experiments with Gift Giving: This includes tipping different types of tokens — such as NFTs — to add even greater social context, scarcity, and value. Relating back to gift economy dynamics, non-fungibility often contributes to the value of the goods exchanged and the status of the parties involved. Also, play around with tipping mechanics, such as decay rates for inactivity and boosts for specific transactions, or integrate tipping into new cryptoeconomic models that leverage “proof-of-giving” to contribute to users’ onchain reputation.
While gift giving isn’t the only activity that I believe will be integral to the future of this space, it’s a good example of how combining novel forms of digital assets, transactions, and ownership, can lead us to the promised land of Onchain Social: open social graphs upon which we can build a vibrant landscape of decentralized applications and the internet culture of tomorrow.
Thank you to Sam Marin, Thomas Pan, David Phelps, Adrian Lai, and the rest of the Spartan Labs team for providing valuable feedback on this piece.
