When social networks combine blockchain | Open up new experiences for users
When social networks combine with blockchain
When users join social networks, the login account itself is not the most valuable thing. The most valuable is user information including the friends they interact with, the content they follow and the actions they take. All of the above helps paint a picture of the user. The more information you have, the clearer the picture becomes.
However, that asset is completely held by social network giants. In addition to controlling the account or content a user can post, the information users provide is being used for advertising purposes or sold to other parties for maximum value.
Blockchain with its transparent or decentralized characteristics creates a new approach to developing social networks. Advertising sales account for a large proportion of social networks' revenue
Information that can be retrieved on the blockchain helps provide a transparent history of activity from which to build an identity. Verified identities are fundamental to the credibility of content. This helps solve problems related to spam and fake content.
The fact that information is not under the control of one party also helps develop new models that save time and effort for users. For example, with Lens Protocol, post content, follower count, and following will follow the user if they use the new platform. The ease and low switching costs enable users to choose the platform and access the content that best suits their desires.
Below we will learn about the picture of social networks developed from web3 and whether those projects have the opportunity to take a piece of the pie of the current social network market.
Overview of social network web3
This section will delve into the question: Should we focus on developing Killer apps or appropriate infrastructure?
Referenced from Coinbase Venture, the web3 social network branch includes 4 main components:
· Applications: group of projects with which users interact directly.
· Profile: project group that connects users to the application
· Social Primitives: middleware project group working on infrastructure.
· Hosting: the project team helps store and provide blockchain infrastructure (L1 & L2) for the above projects to develop.
If not counting middleware projects or profile projects that can be used in many branches other than social networks, two prominent development directions include:
Develop killer app to attract users
Among the hundreds of blockchain projects that exist on the market, the top ten names account for nearly 90% of the market share of locked asset value. With strong network effects, the top blockchains are where many of the applications developed above are concentrated. Over time, different applications gradually appear that take advantage of the advantages that blockchain brings to attract users
From the beginning of 2022 until now, there have been a few web3 social network projects that have attracted attention such as Lens Protocol from mid-2022 to mid-2023, Friend.tech from the second half of 2023 to early 2024, Farcaster from 2024 to the present.
· Lens Protocol: User accounts are NFTs, users can use NFTs on Lens ecosystem platforms without redeveloping the social network
· Friend.tech: Use economic model through key to attract users
· Farcaster: Apply frames to open up new content directions and airdrop to attract users
Although all projects have a period of rapid growth, most of them only maintain a short period of time and then quickly decline. Relying on incentives and economic models has a big advantage in attracting early-stage users, but they are unstable.
Because they are developed on the blockchain, dapps are limited by their scalability and the complex process of on-chain manipulation. If a social network does not provide the basic functions it needs and only focuses on the economic model, users tend to leave as soon as they do not receive related benefits.
Although there are many middleware projects created with the purpose of supporting other projects including social networking applications. However, the integration between projects is often on the surface, not deep.
For example
There is ENS but Lens Protocol still issues .lens domain names, Farcaster still issues Farcaster IDs. Projects mainly collaborate through social tasks such as doing tasks on Galxe, Layer3, QuestN,...
Develop appropriate infrastructure
Killer app development is suitable for the current context of the crypto market when there are too many blockchains with similar designs. Current blockchains are too limited in scalability and have high complexity for users when interacting on-chain.
The magnitude of the channels on the Farcaster
1/ Upgrade the network
Leading networks are researching and developing suitable AA (Account Abstraction) solutions to improve user experience in interacting with blockchain through wallets, Dapps, DeFi.
There have been initial proposals applied such as ERC-4337 or are being discussed such as EIP-7702, etc. Although there are many solutions, most of them have not shown effectiveness. Upgrade proposals still need a lot of discussion and testing because each change to the infrastructure can have big impacts.
2/ Develop new network
Networks that have been developing for a long time and have attracted value like Ethereum are difficult to take a new path and can only improve the means to make going forward more convenient. This is an opportunity for new blockchains with different and groundbreaking designs.
An example of a project with a different approach can be mentioned as Lukso. Lukso targets the AA element right from the initial development platform. Instead of using a wallet as a personal account to interact with the blockchain like users do on blockchains today, users will create an account like when joining a social network. In that account, there can be many wallet addresses adjusted depending on the purpose of use.
In addition to blockchains with different approaches, there are more and more toolkits that help develop chains quickly and can be customized depending on project needs. Some prominent toolkits include Cosmos SDK, Polygon CDK, Op Stack,... Recently Lens Protocol also announced the development of Lens Network based on ZK technology.
Networks created to optimize a certain branch are likely to have better efficiency. However, the networks serving the social networking branch are only in the early stages of development and have not yet attracted value. It will take time to evaluate whether the features the network brings are truly effective or not.
3/ Develop complementary grafts
Upgrading and developing a new network will take a lot of time, so there are projects to develop complementary pieces to partly solve user needs.
Typical of the social networking branch, projects often choose to store data on Arweave to save costs but still retain the decentralized spirit of web3.
Or like the AA segment, besides updating the network, there are also above-mentioned development projects such as smart wallets or projects that apply AA elements to make it easier for users to interact on-chain. The above support applications help simplify interaction but are still not enough to reach users who do not have much knowledge about crypto.
What to expect from web3 social network?
Currently web3 social networks are mainly used by users with knowledge about crypto. For web3 social network projects to truly develop requires taking market share from today's social network giants. Applications such as Meta, X,... have created network effects that help maintain and grow a large user base.
Social networks, when combined with blockchain, can bring new positive experiences to users. However, looking at the current picture, they need some time to develop enough to take a share of the market pie.
Blockchain and crypto help applications attract users well in the early stages, but they are limited by infrastructure and cannot provide the same experience as traditional social networking products. Infrastructure improvements take a lot of time and web3 social network apps that only depend on incentives from crypto will find it difficult to develop stably.
From another perspective, successful products such as Lens Protocol, Friend.Tech, Farcaster have shown the potential that social networks can bring when combined with blockchain. From limiting spam accounts/content, low conversion costs, many unique ways to interact and generate revenue. These applications will continue to be developed and explored to bring new business models and experiences to users.
New blockchains with more optimized architectures are currently in their early stages and have not yet attracted much value. However, if the ecosystem is developed, these networks can go faster than networks that have been developed for a long time.
Conclusion
Social networks, when combined with blockchain, can bring new positive experiences to users. Although more development time is needed, the puzzle pieces are gradually appearing to open up new experiences for social network users in the future.
