Frames release was the moment Farcaster went from a relatively small niche community to a dominant platform/protocol in the larger web3 community. From a high school to a college campus. It was the first of many such leaps that will be needed to progress to the default social protocol. Which I believe is where Farcaster will be when it’s all said and done. Which brings us to the question many have asked since the hype of Frames has died down:
What is “the next” frames?
I think it will be very soon, and we already know what it is: Decentralized Channels. This will be order of magnitudes more impactful than channels. Which is one of two things I want to discuss here.
Why Decentralized Channels will be such a big deal
Hyper-Specialized Clients
Compounding of Decentralized Social Protocols
Harberger Tax - The Future of Decentralized Public Goods
What are Decentralized Channels?
It’s moving channels from Warpcast to the protocol. So instead of it being controlled by the Warpcast client/team, it will be a part of the protocol. Managed totally publicly and up to each client to implement them how they will. Right now things like the names of the channels, who can join and post in them and other such decisions have been controlled by the main team building the protocol. This was very needed while they experimented on what implementation works. When it’s moved to the protocol it can no longer be controlled by one team. This wasn’t a priority as the focus was on experimenting quickly. Now the team has been very clear that moving channels to the protocol is a priority for them in the coming weeks.
Why is this a big deal?
Two reasons: Hyper-Specialized Clients and Compounding of Decentralized Social Protocols.
Hyper-Specialized Clients
You can think of this as channel specific clients. I cannot stress enough how big this is. What this does is empower online communities with crypto/web3 primitives. Think of subreddits. Now it’s twitter but for a long time, Reddit was at the top of the stream for everything on the internet. It’s impact is hard to understate. Even twitter today cannot compete with Reddit. After the events of the GameStop in 2021, it was heavily neutered so it likely won’t be able to have such an impact in the future (this could be an entire article in itself).
The kind of impact Reddit could have without any of the empowering tools of web3 and crypto is awe inspiring. It’s fitting that it’s final act was to nearly take down the world's financial system (chain reaction clearinghouse default.)
This is all relevant to channels because the mental model for channels is subreddits. Except now they will be decentralized and anyone can build clients on top. Implement the subreddits however they want and the community is free to interact however they chose. No worries about Reddit throttling API access or changing the rules in the middle of the game. This will be online communities at their most magnificent and powerful. This is where we will see Balaji’s Network States in action and they will be considerably more powerful than even he expected.
Compounding of Decentralized Social Protocols
When one client eats, everyone does. This is the beauty of Farcaster and what will make it unstoppable once the momentum starts. If someone builds an Instagram-like image client that’s super successful, all the clients get new users and content liquidity. There are a lot of powerful platforms that could be successful but don’t have the distribution/users to really show off their features. With Farcaster everyone wins together, and the wins feed back into each person building on the protocol. It’s network effects but the returns are fed back into the network.
With clients built for separate communities, not only do those communities benefit but so does everyone else. The other clients, the other developers and the users who are share greatly in the monetary benefits as well since crypto makes financialization so simple and distributed.
Harberger Tax
If you’ve made it this far, then allow me to preach the good word of Harberger to you. This tax is one of the most elegant solutions I’ve seen on how to manage public goods and prevent rent seeking behaviour. Here is a good website: http://www.harbergertax.com/
Simply, how it works is you have an item that is always up for auction and the owner constantly pays a small tax on it. This interval can be set to whatever time frame you want. It’s based on the price of the item. So if the price is low, you pay less tax. Someone who wants it more however, will pay a higher price to get it, but then they will have to pay more tax based on the new price.
It allows the public good to find equilibrium and in the hands of those who value it sufficiently. So imagine if channels were set to have a harberger tax. They would generate so much value for the protocol as a result of the tax. It would also allow communities to own it in a multisig and take care of ownership as it would be in the hands of those who truly value it and are willing to out the money where their mouth is.
It also doesn’t work for a bad actor to buy it for a high price and maliciously control the channel. Since the community can simply move to a new channel and so the user will pay a high price, and a high tax only to temporarily disrupt the community.
A small downside when you consider the downsides for other ways to manage decentralized channels. Especially centralized solutions like the creator being able to own it for free indefinitely.
Man the future is so bright for crypto and Farcaster.
See you on chain Anon!
-Syed
