In the era of the creation and thriving of social networks, you and I, got the opportunity not only to consume content but also to create it. It marked the Internet version of Web2 and made it a territory where everyone is a media personality and shares their thoughts, travel photos, upload silly cat videos and influence other people.

This influence was liked by many because it gave an opportunity not only to be famous but also to earn money from blogging or spreading information (sometimes very suspicious).

While creating terabytes of content, users of Instagram, Facebook, YouTube and other free and popular social networks did not know or forgot about personal data. Being visible and creating content that matches the daily context - that was and remains the main goal for many.

The invention of blockchain technology ushered in the era of Web3, enabling people not only to consume and create content, but also to own it.

My name is Daria Volkova. I'm a Blockchain Product Marketing and Branding Expert. I build awareness and trust in blockchain products among users, developers and VC funds.

I’m interested in the Ethereum ecosystem and research it deeply because now it’s the most promising blockchain for building products that can bring the mass blockchain adoption.

In this article, I share the results of the researches and my thoughts about the Ethereum-based social networks and the economy of user-generated content. I describe such social protocols and networks as Mirror, Lens Protocol and Hey, Farcaster and Warpcast, Status, and DeBank. Read it to learn about the trends that will change our online communication.

What are decentralized social networks?

Decentralized social networks are blockchain-based platforms that allow users to exchange information as well as publish and distribute content to audiences. Many decentralized social networks exist as alternatives to established social media services, such as Facebook, LinkedIn, Twitter, and Medium.

Decentralization means the users have the complete right to their content. It means instead of centralized entities owning the content, ownership gets distributed among users.

Decentralized social networks are a class of dApps — applications powered by smart contracts deployed on the blockchain. The contract code serves as the backend for these apps and defines their business logic.

Traditional social media platforms rely on databases to store user information, program code, and other forms of data. But this creates single points-of-failure and introduces significant risk. For instance, Facebook's servers infamously went offline for hours last year, cutting off users from the platform.

Decentralized social networks exist on a peer-to-peer network comprising thousands of nodes around the globe. Even if some nodes fail, the network will run uninterrupted, making applications resistant to failures and outages.

Using decentralized storage systems like the InterPlanetary File System (IPFS), social networks built on Ethereum can protect user information from exploitation and malicious use. No one will sell your personal information to advertisers, neither will hackers be able to steal your confidential details.

Many blockchain-based social platforms have native tokens that power monetization in absence of advertising revenue. Users can buy these tokens to access features, complete in-app purchases, or tip their favourite content creators.

The potential of decentralized social networks is currently untapped. To popularize this direction, venture funds are being created, specializing in Web3 social projects. Recently, there was news about creating the Social Graph Ventures fund.

At the heart of Social Graph Ventures lies a singular, visionary mission: to channel capital into the application and middleware layer startups of Web3’s social graph. SGV is positioning itself at the intersection of innovation and necessity, focused on nurturing the very fabric of the next-gen Web3 social ecosystem.

The main challenges of decentralized social networks

The decentralized movement can no longer be called underground but is still niche. It is doubtful that in the end of 2023 you will see someone on a bus or in a cafe scrolling through the Bluesky news feed or reading an article on Mirror. And there are several reasons for that:

• Complicated onboarding that requires crypto wallet address. Many people share the values of transparency and privacy and have no desire to understand the blockchain ecosystem and cryptocurrencies. Users are put off by the need to have a crypto wallet, and this challenge can be overcome by mass adoption of the Account Abstraction concept. Onboarding users should be as simple as in centralized social networks.

• Web3 social media must be active on Web2 social pages to find more audience. At the moment, decentralized social networks are not as popular as Twitter or Instagram. To reach the largest possible audience, marketing teams of decentralized social networks have to play by the rules of centralized ones - follow algorithms and suffer from advertisements and bots. This is a paradox on the one hand. On the other hand, it is a logical stage of evolution that should lead us to a more decentralized future.

• It’s hard to find a balance between a niche audience and the mass market. Continuing the previous point, it should be noted that the positioning of decentralized social networks is not entirely clear. On the one hand, more and more platforms are trying to focus on the interests of specific groups of people.

  For example, DeBank is focused on crypto investors. On the other hand, nicheness is a limitation in growth, which means a limitation in the social network's revenue. The growth of users is the main rule of survival of social networks, no matter how decentralized they are. From this point of view, the protocols look more promising, in my opinion, because they can scale indefinitely.

• UI and involvement flaws are still far from being perfect. Due to the industry's youth, many points related to the design of applications and their marketing are inferior in convenience to centralized social networks. Sometimes, there is a feeling that developers make them for developers and not for mass use. However, it is only a matter of time and attracting more non-technical professionals to work on decentralized social networks.

Despite all the challenges, decentralized social networks are growing an audience of enthusiasts. Lens Protocol has more than 100K native Web3 users, according to their website. DeBank has 200K+ users on the platform. This is quite small compared to the hundreds of millions of Facebook or X, but it is not bad for niche social networks that require specific knowledge to register.

The need to look for new decentralized platforms is due not only to the fact that Facebook's servers go down from time to time or LinkedIn is not as UX-oriented and fast as it could be. There's something else that makes you and I suffer, even if it doesn't seem like a big deal at first glance.

How do traditional, off-chain, social media platforms make us suffer?

In this part, I will not talk about how traditional social media platforms are addictive, fake, and manipulate our behavior to waste our time and become an object rather than a subject online. I'm sure you know all this even without my explanations. You can read the results of researches on social media and its negative impacts on autonomy.

Instead, this part is dedicated to actualizing some additional flaws of traditional social media, namely:

Control over Data

As users navigate through and interact with one another on social media, they generate incredible amounts of data which are recorded and stored by the owners of the platforms.

When users create a social media account and use the platform, they leave a digital footprin on the internet. Companies collect personal information, along with interests and locations, from the platform by using tracking cookies, geofencing and cross-site tracking. When users sign up for an account, they agree to the terms and conditions, which enable social media platforms to collect data.

Even if an account is private, advertisers and scammers can get sensitive data, such as the following:

• status updates, including work, life and relationship events;

• religious beliefs;

• profile information, including name, contact information and birthdate;

• location data, including your hometown, check-in locations, previous cities lived or exact address;

• personal interests, such as buying history and website interactions;

• status updates, photos and videos;

• engagement on social media, including likes, shares or comments on other posts;

• employment information, including current or past jobs;

• personal identifiers, such as age, race and gender.

Social media posts can reveal attitudinal data, which captures feelings and emotions. This data measures how users feel about certain messages and content. Attitudinal data can be used with surveys, interviews, reviews, feedback, preferences and complaints.

Platform Capitalism

In the case of platform capitalism, including social media, it is the users and their activities which provide the materials, data, which lead to profits. Platform capitalism refers to a form of capitalism focused on building digital infrastructure that enables two or more groups to interact, and which typically builds on network effects to try to keep its users inside the platform.

In most cases, Web2 social media offers free access for the users. And what happens next? The user becomes a product of the platform capitalism. We don’t pay, but the private data of all of us becomes a commodity.

Many people are not satisfied with this format of data trading, so European regulations require the Meta to store data on the territory of Europe. Meta cannot fulfil these requirements, so the company proposes to make the accounts paid.

Meta will offer people in the EU, EEA and Switzerland the choice to pay a monthly subscription to use Facebook and Instagram without any ads. People in these countries will be able to subscribe for a fee to use our products without ads. Depending on where you purchase it will cost €9.99/month on the web or €12.99/month on iOS and Android.

The representatives of Meta hypocritically claim they “believe in an ad-supported internet, which gives people access to personalised products and services regardless of their economic status”. In fact, they do nothing to protect users’ data because they trade the data.

Which Ethereum-based social networks are going to change the market?

I want to share with you several Ethereum-based social networks that grow and change the market and the future of the Internet.

These are the protocols and social networks that are currently promising due to the attraction of new users and the community's activity. In fact, there are many more, so I would appreciate it if you could share your list.

Mirror

Mirror.xyz is a decentralized social publishing platform and content marketplace built on blockchain technology, specifically the Ethereum blockchain. Launched in October 2020, Mirror aims to fix the ownership gap and some of the other issues raised before by creating a Non-Fungible Token (NFT) from the written content.

• Instead of classic likes and reposts, Mirror reimagined interactions between author and reader. To like and repost or save an entry, the reader must mint it in NFT format. Every entry shows the number of accounts that have liked and saved (minted) it to their profile for free (we do not take gas fees into account).

• The entries (articles) can be minted through L2 networks to avoid huge gas fees. The most used are Optimism and Base.

• The platform has a clean and minimalistic design, focusing on the content. This design choice is intended to enhance the reading experience.

• Unfortunately, on Mirror, you can’t search for a specific topic as on Medium or Hackernoon. To read something, you must have a direct link, or the entry must be featured by the curators.

• This moment of curation and selection of articles is confusing, because the principle of decentralization assumes that the content will not undergo selection, and only users will decide what to read.

This is a screenshot from the Explore page where you can find featured entries.

Content published on Mirror.xyz is stored on Arweave, making it immutable and resistant to alteration or deletion. This ensures the integrity of the content and prevents unauthorized changes.

Marco Rodrigues created a comprehensive article with analysis of entries on Mirror - statistics with top networks and top authors, and much more. I recommend you to read it.

Lens Protocol

Lens Protocol - a permissionless, composable, and decentralized social graph that makes building a Web3 social platform easy. From the team that built the Aave Protocol.

The purpose of the Lens Protocol is to empower creators to own the links between themselves and their community, forming a fully composable, decentralized social graph. This is achieved by allowing users to create profiles and interact with each other via these profiles.

The protocol is built from the ground up with modularity in mind. Lens Protocol is currently overseen by a multisig, which will be expanded to a broader DAO, which can develop and vote on new modules and expanded functionality.

How does the Lens Protocol compare to existing social networks and graphs?

Lens Protocol seeks to solve major issues in existing social media networks. Namely, Web2 networks all read from their unique, centralized database. There is no portability. Your profile, friends, and content  are locked to a specific network and owned by the network operator. This  causes each network to fight a zero-sum game for your attention.

Lens Protocol corrects this by being a user-owned, open social graph that  any application can plug into. Since users own their data, they can bring it to any application built on top of Lens Protocol. As the true owners of their content, creators no longer need to worry about losing their content, audience, and livelihood based on the whims of an individual platform's algorithms and policies.

Here is a video from ETHCC 2023 where Stani Kulechov, the founder and CEO of Aave and Lens Protocol, talks about the updates in Lens Protocol. I recommend you to watch it:

Hey

Hey is a cutting-edge social media application that leverages the power of Lens Protocol to create a decentralized and permissionless platform for users to interact, share, and engage with one another.

With a focus on privacy, security, and user control, Hey aims to revolutionize the social media landscape by providing a more transparent and equitable digital environment for its users.

Farecaster and Warpcast

Farcaster is an open protocol for a decentralized social network that gives ownership of the relationship between consumer and creator directly into the hands of the consumer.

Farcaster describes itself as a sufficiently decentralized protocol. If two users can connect and communicate with one another, even if the remainder of the network wishes to stop them from doing so, then the network is sufficiently decentralized. This indicates that users can always connect with their audience, which is only possible if network engineers can create a large number of clients.

Farcaster has raised a total funding of $30M over 1 round.

In August 2023, Dan Romero, Farcaster’s co-founder and CEO, noted that many of its “most active users and developers” are currently building on Optimism or another network using Optimism’s OP Stack, such as Base or Zora.

I want to share a video where Dan Romero shares lessons learned growing Farcaster and – a protocol for building decentralized social networks – including the advice he’d give himself at the beginning of his journey. From thinking like a user to welcoming more builders, Dan’s talk covers best practices for growing protocols developers want to build on.

The Warpcast social media is built on the Farcaster protocol so anything a creator posts is distributed to their audience, unless and until the consumer decides to unfollow them. No third-party intermediary can snip that connection.

The app is similar to X (Twitter) in terms of look. In terms of function, users can post a 320-character cast, post media, reply, recast, direct cast, and use encrypted messaging.

There’s also a connected wallet feature that shows users’ on-chain activity in the feed as it happens and lets users show off their NFTs in a tab.

The app currently has 20K+ individual users most of whom are people interested in ETH and people who are building new things like SaaS companies, etc.

Status Network

The Status Network builds decentralized technologies, including protocol-level infrastructure and consumer applications, to create resilient, sustainable, and inclusive communities.

They offer products such as private and secure communication tools, secure hardwallets, and decentralized project funding. Additionally, they provide developer tools for building and deploying decentralized applications (DApps) and an infrastructure layer for secure messaging and implementing Ethereum 2.0 clients.

The network is governed by the native token, SNT, which powers products and incentivizes initiatives.

DeBank as an example of a SocialFi network

Debank is a web and mobile platform that specializes in providing data and analytics for decentralized finance (DeFi) projects. It serves as a comprehensive DeFi wallet and analytics tool, offering users insights and information about their DeFi holdings and activities.

Key Features of DeBank:

1. Data Aggregation. Debank aggregates data from various DeFi protocols, providing users with a centralized platform to access information on lending, borrowing, yield farming, and more. It saves users the hassle of visiting multiple platforms to gather data.

2. Portfolio Management. Users can track their DeFi investments, view their asset allocations, and monitor their performance, all in one place. Debank’s user-friendly interface makes it easy to manage and optimize portfolios.

3. User-Friendly Interface. Debank offers a clean and intuitive interface, making it easy for users to navigate and understand the complex world of DeFi. It presents data in a visually appealing manner, enhancing the user experience.

The biggest value of the product that you, as a crypto investor, can analyse the most profitable portfolios and contact owners for advice.

To further monetize the platform, DeBank offers paid features for users:

You can read a comparative analysis of DeBank and Lens Protocol in the article on Medium.

Conclusion

As you can see, many decentralized social networks are currently developing in parallel, which aim to replace traditional centralized ones through data control, content monetization or by closing specific user needs.

Currently, the number of users and their onboarding are the main challenges that the teams of these social networks have to overcome. People already understand that large corporations like Meta are not about ethics but are not ready to switch en masse to unfamiliar platforms.

The number of users will increase with the development of B2C dApps on Ethereum or L2s, the popularization of Account Abstraction, and the upcoming bull run.

Read my previous entries about Marketing and Branding of Ethereum L2 Networks and about Account Abstraction as a perfect blockchain tool for exciting brand experiences.

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