Web3 social networks are a fascinating frontier, where the decentralized nature of the underlying protocols gives rise to a multitude of apps vying for user attention.

I’m the founder of discove.xyz, an app on top of the Farcaster protocol, so I have a horse in this race.

In the world of permissionless social protocols, users are theoretically able to switch apps and bring their profile, username, follows and posts with them. That raises the question for builders - if you build a great social app today on one of these protocols and capture a meaningful market share, can you expect to be able to able to have a lasting competitive advantage even if the protocol attracts significant competition?

Here are some new tools unique to permissionless social apps for building moats.

Social apps with market share can provide significant additional distribution to in-app users

One strategy that caught my attention is the use of incentives to encourage users to choose one app over another. Phaver, a Lens social app, exemplifies this approach by rewarding users with Phaver points for using its platform. These points can be used to boost the visibility of their posts, creating a virtuous cycle where users are incentivized to stay within the Phaver ecosystem to maximize their distribution on the protocol.

We might expect the market share of this app grow as a result of the stronger incentives to use it for distribution, compounding it’s incentives increasingly, to where it might hold a majority of the network and may have the option of not publishing content to the protocol altogether, essentially vampire attacking the protocol and moving the community and their new posts to somewhere else.

This strategy can lead to strong moats by apps and strong app centralization, where the space would face some similar problems to the some of the ones it’s trying to solve in web2 platforms; where there’s a couple big platforms that use their network effects to make it very difficult for other apps to provide great product experiences, due to their lack of network effects.

Post boosting rings

Another adversarial possibility is the formation of automatic in-app post boosting rings. In this scenario, a app could use the credentials of its users to automatically like and boost posts made through its platform. This would create an artificial sense of popularity and could distort the metrics used to surface top content on other apps, giving the in-app users disproportionate distribution.

Imagine this simple case: Offer your users one button to like 100 new posts by users of your app. In exchange the user gets loyalty points for your app, which they can redeem for likes. As a app, you disregard these likes for measuring what content is high quality, but posts by your app’s users end up in all the highlight feeds across apps built on the protocol.

Hiding or nerfing mentions of the competition

The competitive dynamics of web3 social networks also raise questions about how apps handle content that mentions or links to competitors. Will apps be tempted to "nerf" or rewrite links to rival platforms? Could they subtly watermark content or add promotions like “Sent via Superhuman” in the end of their posts to promote their own brand?

In addition to typical moats

Beyond the more adversarial moats mentioned above, apps will have other moats around brand, writing software, distribution, proprietary user data for targeting algorithms, and additional user data or preferences that aren't shared to protocols.

On protocol design

Ultimately the goal of web3 social protocols is to create the right structural incentives to give consumers more choice and better products through competition and innovation, while also creating sufficient incentives for the protocol to grow and reach network effects.

There's a sentiment of grow the pie rather than compete over the existing pie in some communities while the market is small and is growing at a fast rate, but once that changes and the market matures, the incentives and tools apps have at their disposal will become more important.

What’s the right balance for a protocol and protocol community between designing the protocol to make app moats small, potentially removing incentives for investment into building apps, and allowing for moats so large that they are only marginally better than their permissioned alternatives.

It's a delicate dance to design robust protocols, as decentralized social apps have a number of strategies at their disposal to build long term moats.