Decentralized Social Networks Will Succeed Because of You: The Crypto Community
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July 12th, 2022

Decentralized social networks are on-trend nowadays and it’s easy to see why. Top-down, our current social networking status quo has issues. Data monopolies make it hard for users to switch to something new; the advertising business model encourages a singular feed algorithm optimized for attention; and censorship is increasingly relied upon to keep the gen pop at bay. Bottom-up, we’ve advanced our decentralized technology toolkit quite a bit over the past few years. Blockchains have improved; user-controlled crypto wallets now have millions of active users; and tokens (of the fungible and non-fungible varieties) have succeeded as units of value for decentralized protocols and as units of coordination for decentralized communities.

While there’s been plenty of digital ink spilled on the above, I want to highlight one underrated element of why decentralized social networks can succeed: the crypto community as their early-adopter cohort.

New social networks make celebrities out of early-adopters who put in the work to express themselves via the product’s new capabilities. Social networks grow by resonating within that early-adopter cohort in a way that attracts new users to emulate and adapt the observed early behavior patterns for their own benefit. As the network grows, so too does the status of successful early-adopters both locally (within the social network) and, eventually, globally (absolute celebrity) as the social network reaches mass-market scale. In a sense, a winning social network cultivates an early community of users who could be famous given the right tools, and gives them the right tools [1]. Past examples include silicon valley insiders on Twitter and high status young people on Facebook.

The crypto community has the potential for future fame and a crypto-powered social network, naturally, is the right medium for the manifestation of that eventual celebrity. The crypto community is a net-new social graph with aspirational traits: a positive-sum mentality, a strong meme game, an intuitive grasp of blockchains and their use, and a point-of-view on building internet-native institutions, among others. These characteristics can one day attract the masses who wish to emulate and interact with this community. The crypto community’s status accrual will be uniquely aided by the native capabilities of a decentralized social network (e.g. NFTs, zero-knowledge proofs, anon-friendliness, on-chain awareness) — forming a fabric the crypto community can weave into new and compelling forms of online social interaction.

There’s a lot to figure out (e.g. product vs protocol? how decentralized is sufficiently decentralized? what are the right business models?). But I’m confident that the crypto community is a compelling social network early-adopter cohort, and that on its own gives decentralized social networks a good chance to succeed. And perhaps the best news is that the crypto community is already coalescing around products and protocols, stewarded by deeply principled leaders with the experience and foresight to go the distance.

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[1] A counterintuitive consequence of this growth pattern is that it is usually a bad idea to add pre-existing celebrities to a new social network. Pre-existing celebrities are unlikely to be good early-adopters and, by definition, don’t need to utilize the new product’s native expressions to achieve status. They can drown out the very patterns of use that need to be amplified within the early-adopter community. Now, there is a time and place — magic happens when a celebrity joins a social network and adopts pre-existing norms (e.g. Shaq joining Twitter and engaging with his followers, rather than pure broadcast). But those norms need to be strongly established by early-adopters before pre-existing celebrity can be poured on top.

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Thank you to the following people for reviewing drafts of this:
I.M. Not, Playing Y’Our, Status G. Ames

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Disclaimer: This post is for general information purposes only. It does not constitute investment advice or a recommendation or solicitation to buy or sell any investment and should not be used in the evaluation of the merits of making any investment decision. It should not be relied upon for accounting, legal or tax advice or investment recommendations. This post reflects the current opinion(s) of the author(s) and is not made on behalf of Standard Crypto Management LP (“Standard Crypto”) or its affiliates. The opinions reflected herein are subject to change without being updated.

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