Lens Protocol & web3 content economy & scaling design
I'm really interested in web3 content. Might even be more bullish on it than defi, and I'm super bullish on defi.
This interview with the Director of Dev Relations at Aave/Lens, Nader Dabit, was excellent as he dug into the technical and design challenges of web3 content platforms.
https://open.spotify.com/episode/2OtvxXmZIijW9UOnLsFU6f?si=BvNQASg4Sl6IAijH58tWxA%0A
It also led me to writing down a bunch of thoughts on web3 content economy and scaling design.
The Future Lens is building to
I love what Lens is trying to do. I'm also hanging out for a Lens handle but the reasons I don't have one yet are worth digging into.
Lens dApps
Nader talked about some of the dapps from Lens https://www.lens.xyz/apps , his current favourites are LensTube https://lenstube.xyz/ and Orb https://orb.ac/
I was very glad to hear he called out wav3s https://wav3s.app/. When discussing the various forms of monetisation Lens enables, Nader mostly referenced the ‘tipping’ model nearly all content dapps in web3 currently employ. This is not a new concept and it’s much better done currently by web2 apps like Patreon and Only Fans. Even YouTube has now has a pretty robust set of ‘tipping’ features.
wav3s is a revenue model, essentially a decentralised ad agency, that is genuinely enhanced by the blockchain and cryptocurrency.
NOTE: At time of writing the wav3s website is not functional. I haven’t been able to ascertain whether this is temporary or indicates the protocol has actually shut down as it was previously working.
I would argue the BAT token is a more polished and advanced model for this use case https://basicattentiontoken.org/ but wav3s exists to serve only within the Lens ecosystem so that’s their hook (much as $BAT only within the Brave browser).
Lens will need more models like wav3s if it’s to truly capture the imagination of users seeking the paradigm shift web3 promises.
Blockchains and Gas
Now let’s talk blockchain technology and mostly we’ll be talking gas fees.
Lens is built on the Polygon POS chain. Commonly referred to as an Ethereum Layer 2, Polygon POS is more accurately described as a side chain. Polygon POS has it's own validators. That's why you can stake $MATIC but you can't stake $ARB or $OP.
Polygon POS utilises Ethereum to post a transaction summary every now and then for added security. That's also why it's so much cheaper than other Layer 2s (like Optimism) which requires Ethereum to ultimately validate their transactions.
Why is this so important to call out?
Web3 content platforms are a very different use case to finance. They require very high transaction volumes at very high speeds. Much more than even the largest and best high frequency traders in finance.
They also need those transactions to be cheap. Really cheap.
Because whilst there's probably less than a million traders (and way, way less professional ones) there are many billions of web content users.
Content is the big time.
Let’s join the dots
Lens has limited their user sign up because they knew the Polygon POS blockchain couldn’t scale for the user growth they were expecting even just from early adopters. They feared they would create so much congestion on the Polygon POS chain gas prices would lock other users out and transactions would slow to a crawl.
It’s basically what Ethereum looks like should anything even mildly popular happen on the chain.
Lens was smart in realising this early and severely limiting access until they had a solution. That solution was to build a Layer 3, though it’s more like a Layer 2.5 as Polygon is mostly a Layer 1 (see above).
From https://thedefiant.io/lens-layer-3-momoka
Data availability layers are utilized to reduce on-chain storage requirements, allowing Lens to minimize the costs associated with using its platform.
“While content on Lens may include an on-chain transaction, the content data is linked to a data availability location, like Momoka,” Lens said. “Momoka serves as a scaling solution that processes Polygon transactions off-chain… Unlike L2 solutions, Momoka doesn’t compress transactions into L1, it sends and stores them on a data availability layer.”
Lens said it partnered with Arweave and Bundlr on Momoka, and said both teams are helping to facilitate the rapid publishing of data on Momoka.
The downsides?
It’s centralised, like all Ethereum rollups are now (Optimism, Arbitrum etc…) as the sequencers isn't decentralised.
A Layer 3 alos adds more complex as you now have to go through Polygon POS to get to Lens. It’s possibly even more complex should you first go through Ethereum (as some do) to get to Polygon POS.
Will it work? Maybe
One huge advantage of centralisation is the ability to control more of the protocol user experience. There’s not a lot of details yet (least that I could find) but I imagine things such as gas-less transactions and instant assumed finality (after all it’s only content we’re most talking about) would be on the cards.
Much like Immutable’s Immutable X chain enables gas-less transactions and reasonable fast speeds for its NFT marketplace partners (a better UX as opposed to Ethereum gas hell on OpenSea or Blur) a speedy and cheap UX would be broadly welcomed by social media users coming from the existing web2 platforms which are free to use and lightning fast.
Right now we know that Lens was worried about costs on Polygon POS and that chain is considered the cheapest of the Ethereum scaling solutions in the market today (there are no, to date, Layer 3 chains available for general use). So there is a ways to go before Lens can meet the bar most users have for content platforms.
What web3 content is like now
I have experience using Mirror, which is on Optimism (an Ethereum Layer 2), and I’ve seen my cost to use fluctuate 2-3x month to month. That’s due to the continued congestion and sky high gas fee spikes on Ethereum. Now you could argue Mirror is pretty much free to use if you don’t collect articles (Writing NFTs) or list your collected articles on an NFT marketplace. But if you do neither of those things you’re not really using anywhere near the full power of Mirror, it’s just a less feature blogging platform with decentralised storage at that stage.
Now I would say I’ve not done a lot on Mirror but I’ve already spent ~$20. Currently fees for any action that directly interacts with the Optimism chain range anywhere from $0.20 to $1. That may not sound like much but this is a content platform we’re talking about, not a share trading app. Those price points start to lock out large numbers of users.
NOTE: It’s true the recent Bedrock upgrade on Optimism has noticeably improved fees but we’re talking 20-50% less not what it needs to be, 97-99% less.
Increasing fees aren't the droids anyone is looking for
People seem to think that an increasing cost to use is a good model that many blockchains and their related cryptocurrency should aspire to. The below discussion is a great example of this opinion.
https://open.spotify.com/episode/2cjzHxaJMqqOLX99DonZYR?si=4uzbAFcaRdyzuEwgYm1rUw
Ethereum getting more expensive is bullish according to professional traders. But that’s a vanishingly small group of users.
How will Ethereum 1000x it's user base (like it wants to) via increasing costs?
You've seen how congestion on Ethereum noticeably affected my Optimism experience. How many times would users put up with congestion fees like the below before they gave up?
- $5-10 per transaction layer 2?
- $500-1000 a transaction on a layer 1?
The argument is further upgrades to Ethereum will bring costs down but we keep hearing Ethereum has made gas fee optimisations and we keep seeing that not play out in lived experience. There is a lot of money to be lost in decreasing gas fees on Ethereum for the stakers and validators on the network.
The trade off is supposed to be that usage will significantly expand to compensate, but what if it doesn’t expand enough?
I think there is a world where Ethereum gets into a very uncomfortable situation where there is a real conflict between what is good for user adoption and what ecosystem players want.
At that stage we are at the rent seeking behaviour that people came to blockchains and crypto to avoid. You even could successfully argue we may be at that point already.
Web3 content platforms that work today
Solcial and BULB are content platforms built on a Layer 1 (Solana) that are open for anyone right now. There’s no need for limiting user growth as Solana is able to scale for volume whilst managing costs.
I've used both extensively and spent about $2 so far and that’s been for many many more interactions than I’ve had on Mirror.
I used both through the Mad Lads mint craziness on Solana where over 10 million wallets (many bots) hammered the chain. I didn't notice much difference in speed or cost. I think I had one transaction fail the whole time.
Both platforms are able to be more decentralised as they're directly on a Layer 1.
If argument is, as Nader makes in the podcast episode, blockchains in their current state can’t scale to meet the demands of standard web2 content platforms I would posit he’s not really paying attention to what’s happening outside of the EVM world.
Even bespoke (and somewhat niche) chains like Steemit & Hive, which use a delegated proof-of-stake (DPoS) consensus mechanism, are providing cost effective scalable content dapps (e.g., social media, gaming, video sharing etc..) right now and have been for quite a while.
I still check regularly to see if I can get my Lens handle, and I’ll be using the Lens dapps once they’re available to me (at very least if only for an initial trial).
But you don’t have to wait for a new layer 3 to experience legitimately web3 native content platforms as they’re here now and they represent a step change in the value and ownership models we had grown accustomed to in web2.
