Crypto social will spawn entirely new networks

November 8th, 2023

Our public onchain activity will be bundled into social feeds that are easy to digest and take actions on.

We won’t just be users, but integral parts of the value creation - where every like, share, and comment moves the needle.

We'll move away from conventional advertising towards innovative business models that offer more effective, transparent, and rewarding distribution.

I’ve been building in crypto social since Lens was on testnet - and I’ve never been more hyped than I am now.

TLDR;

innovation in web2 platforms has stagnated and there is an appetite for new consumer social experiences, with the tech stack to support
onchain is the new online, with digital ownership driving the shift from passive consumption to active participation
protocols like Lens and Farcaster are catalysts for the emergence of high-definition social networks which utilize onchain data to accurately measure and incentivize engagement
builders will be competing to be the preferred client, with less competition at the protocol layer to offer monetization + cross-chain functionality
MadFi Social Clubs

Traditional social media platforms are in a state of decay. Other than copying each other’s features, there’s not much incentive for them to innovate; their bottom line is to maintain our attention long enough to show us another ad. I think TikTok was the pinnacle of web2 social media - the culmination of a decade of perfecting the highly addictive feed + algorithm model.

I think we’ve had enough of that, and the generation of kids after me definitely don’t want anything to do with Facebook. They want something new. Rage against the machine.

There’s never been a better time to build a consumer application.

Podcast Linked: https://open.spotify.com/episode/32El1BXQm3PzLU871JMtfG?si=3ad10326724d493b

Moreover, I think we finally have the tech stack to build crypto-native apps that feel like normal apps. It was a big theme at Paradigm Venture’s “Consumer Crypto Hackathon” in NYC two weeks ago. The two biggest unlocks in my opinion were

Managed wallets + social login + PWA with Privy
Paymaster to sponsor user transactions on Base

With these abstractions, users don’t deal with connecting their wallet, switching networks, or approving transactions.

I’ll also say that crypto social applications won’t replace traditional social media. We can simply view web2 social as top-of-the-funnel distribution channels, with crypto social focused on converting those users to onchain media, where they join the new internet being built.

onchain is the new online

This basically means more and more of what we do on the internet will go on some blockchain or data availability layer and will be linked back to our crypto wallets.

This is digital ownership, and it’s paving the way for new business models and new feelings of psychological ownership that will create stickier products than those of the last generation. Gamers understand this.

“Anything on the internet that can be an NFT, will be an NFT” is a line I read a few years ago, and it’s starting to materialize as we’re adding the word onchain before everything on the internet

onchain music
onchain media
onchain games
onchain ads

If we can assume this trend won’t slow down and more of what we consume online is collectable, interoperable, and programmed to handle the exchange of value - then we can also assume that our online behavior will change as a result of this. We’ll go from doom-scrolling to actively engaging with and promoting content that we align with - simply because of the effects of ownership. We’ll have skin in the game.

Lens and Farcaster are both crypto social protocols that offer social graphs, infra a framework for building social applications. They help solve the cold-start problem by giving builders access to a growing network. Just like slack is built on company graphs, Facebook on college graphs, Discord on gamer groups - building on top of these existing graphs means not starting from scratch.

But crypto social opens the door to an entirely different type of network, one that’s grounded not in click-bait, hype, or propaganda, but in economic interactions on the blockchain. Here, the use of onchain data - like asset ownership, product engagement, and transaction patterns - becomes the foundation.

We have a design space where activities such as promoting content, securing sponsorships, purchasing NFTs, and experimenting with new protocols are all data points and building blocks of a rich, high-definition social graph that blurs the lines between brands/sponsorships/creators/superfans/followers.

One interesting observation in the Lens ecosystem is that everyone is building clients + developer tooling on top of the Lens social graph. We have several general-purpose mobile apps, and some focused on video and music. And I’m sure there’s clones of every type of app on Farcaster, DeSo, etc.

It’ll also be interesting to see whether value accrues horizontally across the ecosystem, or vertically with a single client capturing the majority of traffic and being the entry point for onchain social interactions.

Regardless, I think there will be an opportunity to build the monetization protocol for these applications, transcending basic 1% mint fees to include premium content, sponsored posts, and onchain rewards.

Earning loyalty points on your favorite creator every time you interact with their most important social posts, and using them towards a free month of premium content
Social clubs with niche feeds; community-generated content pays out in USDC
Crypto subscriptions as real-time money streams
Creating an onchain social post that promotes your creator’s new opensea collection, and you get 5% commission on all sales made from your post
Members from your social club collaborate to promote one person’s drop, and 20% of the sales get automatically distributed back to contributing members based on loyalty points

At MadFi, we’ve been building and experimenting with crypto social for over a year. From a self-serve ad platform, to sponsored posts and crypto subscriptions. With our next release, our features are coming together for a more cohesive consumer app.

For creators: reward your most engaged followers with loyalty points, and offer your premium content to paying subscribers. Want access to behind-the-scenes FriesGPT development updates from @jessyjeanne? You need at least 500 loyalty points to view the gated posts. Subscribers get early feature access.
For DAOs: incentivize community generated content via a Campaign. Top 3 voted on posts go onchain and the creators earn 5 USDC + loyalty points. Loyalty points translate to future revenue-share distributions. For helping dOrg land their next client through my social post, I should get a 10% commission from the first invoice.
For NFT communities: social clubs as way to organize the social feed into hyper-relevant content and sponsorship opportunities. Members have access to all onchain social post modules available on MadFi to monetize their content and their IP. I want a feed of DeathbatsClub members’ rock-related digital collectables so I can share with my friend groups and earn commission on every sale that happens through my onchain social post.