From Joel John

Hello!This was originally written as a brief for our paid mailing list but we figured the whole community benefits from reading it. So here I am with a note on what Farcaster is, how frames work and why you should pay attention to the new frontier for attention.

This article would not be possible without inputs from a number of community members who have been active on our Telegram community. In no particular order, I want to say thanks to Saumya, Shakti, Katerina and Sky for moulding my thinking around Farcaster.If you are tinkering with Farcaster, consider following me, Sid & Saurabh. Also come hang out in our channel here. Farcaster currently requires a payment for sign-ups, but I have some warps to spare. I’d be happy to share an invite link if you drop me an e-mail.

Lastly, if you are a founder building early stage products or protocols - make sure to drop your deck at the button below to get in touch with the crew behind Decentralised.co. We like early, half-baked, messy ideas that are at their earliest stages. Heavy in conviction, low in consensus.

Alright, let’s dig in..

Remember, in 2022, we had to ‘let that sink in’. Out of the blue, Elon Musk purchased Twitter for $44 billion. I used to think beard man Jack would never relinquish control of Twitter, but it seems most things can be possible with a price. There has been much hue and cry about how the platform has since been run. But, safe to say, most of us would wake up and doom scroll on the same platform. 

Call it network effects, acquired habits or simply that some of the brightest minds hang out on Twitter today — there has been no replacement for it — until recently. Farcaster has been making the rounds on Twitter lately due to the introduction of Frames. In simple terms, here's a refresher. 

Why does any of this matter? The chart below should help explain. There has been an explosion of users trending towards Farcaster in the past few weeks. And a large part of the reason has been frames.

Data from this dashboard on Dune by Pixelhack.

Over the past few weeks, Frame has been a ‘killer app’ that has driven Farcaster to prominence. At peak, the application did close to 42k DAUs compared to a little over 2.5k DAUs a few weeks back. There has been a similar revenue growth, too. Cumulative revenue on the platform has grown to $620k, of which some $400k came in last month alone. 

Farcaster presently generates revenue when users sign up for the product. There is a $5 fee one pays either through off-chain mechanisms (app-store payments collections) or an additional fee (called units) as the number of interactions on the platform increases. It comes to around $1 monthly for additional casts or followers on the product today. Individual clients that build on top of Farcaster can charge their own fee models, much like Superhuman does for email. 

Crypto-native Newsfeeds

Frames do to Farcaster what standalone apps (from the mid-2000s) did to social networking apps. You had to rely on friends and family to post interesting content on these products. For Web3 social networks, there have been no friends and families — only degens and airdrop farmers trying to be early to Web3 native social networks.

So over the past few quarters, most Web3 social networks have had little to provide to users visiting them. App stores (in the 2000s) and Frames (on Farcaster) solve the lack of content issue with developer ingenuity. You are no longer restricted to user-generated content but allowed access to the multitudes of experiences developers can create.

When Zynga took off on Facebook, a young user base was hopping on it to play Mob Wars or FarmVille. With Frames, users are flocking towards Farcaster with the intent of minting new NFTs and discovering on-chain apps. Frames are a powerful primitive as they abstract away all the bits of what has historically made on-chain interactions a pain.

They help you discover trending content, subscribe (or mint) on-chain with a button and add it to your wallet, all without ever leaving Farcaster’s interface. Frame’s core value proposition is changing what were historically multiple tables, multiple clicks and multiple wallets into a single scroll. And it turns out, the market has substantial demand for it. The chart below looks at the number of times frames have been casted over the protocol.(Think of it as sharing your favorite application to your newsfeed on Facebook in 2009)

Chart Source: Spindl

Let me explain why this matters. Historically, you had to go through Twitter to find something interesting, verify it’s relevant by checking numbers on a blockchain explorer (like Etherscan) and then plug into the website (via metamask) and interact with a smart contract. I presume that you have ETH (or optimism or arbitrum or matic) on the right network to do this function. Most of the time that is not the case. So you end up spending 20 minutes just bridging tokens.

Farcaster’s Frames product abstracts that whole experience. Users can simply discover NFTs or on-chain games in their feed and interact with them without leaving the client. Why does that matter? Because each time a user leaves a product (such as OpenSea or Uniswap), unless their intentions are very strong (to speculate), the odds of them spending more time in that app are quite low. We live in the age of attention deficit.

Web2 native products like Twitter understand this, which is why they now punish links pointing towards external websites. You want to keep the user inside your walled gardens for the longest time.

It might appear like we are simply recreating what existed in Web2 already, as embeds are not new technology. However, what feels ‘magical’ about frames is that it is a functional instance of the composability, user-ownership and protocol-first approach to Web3 social networks our industry has historically discussed.

Marketmap by long-time community member and data wizard Jonathan. Visit Farmap.iofor a preview of what he’s building next.

For instance, a power-user (of NFTs) could build a client (like Warpcaster) that specifically surfaces NFT-related content and allows its management while interacting with Zora (the marketplace). In such an instance, the protocol (Farcaster) has very little say on how the user interacts with it.

Suddenly, developers have the collective mindshare of hundreds of thousands of users. Going viral on Farcaster is their best shot at having thousands of wallets interact with their product — albeit for small sums of money. Cracking the discovery engine for new on-chain products, be they games, music or NFTs can be a landmark moment for Web3 social networks.

Part of the reason why this matters is that historically, we thought Web3 social networks (like Lens) would upend Web2 ones (like Twitter). But I am increasingly convinced that won’t be so. Let me explain why.

Social Graphs + Commerce

Early on, while researching for this piece, I posed a simple question to our community on Telegram. Would you replace Twitter with Farcaster content? Nobody said yes — not even the most prolific users in our Farcaster community wanted to let go of Twitter. For a while, I thought this was massively bearish for Farcaster because, unlike products involving staking or lending, in which you passively park capital, Web3 social networks must compete for attention.

You do not have endless amounts of attention. So, by default, any Web3 social network should either be able to replace an existing Web2 social network you spend time on or carve out time from other activities. 

Or so I thought. In my use of Farcaster, what has become fairly evident is that Web3 social networks are not about content or friends. They are about commerce in its purest form. Because blockchains are inherently tools that allow one to verify asset ownership — and its transfer, pricing and trades — Web3 social networks that dominate the industry early on will cater almost exclusively to on-chain power users.

These users flock to the platform in hopes of finding new NFTs to mint, tokens to trade and on-chain activities to track. They are not arriving for a firehose of random news. They are here for the alpha. 

One way to understand why is through the lens of incentives. Present-day Web3 social networks struggle to surface content that is on par with platforms that have been around for decades. Presumably, creators (including myself) will not port over to a new Web3 platform simply because it claims to be decentralised. Creators usually work for one of two core incentives, putting aside the core joy of creating in itself.

One core incentive is attention, which is where products like Twitter excel today. The other is capital incentive or monetisation, which is where products like Substack and Mirror are currently focused. 

Without large user bases, creators are primarily incentivised through high engagement. Most creators I spoke to about Farcaster had the same thing to say: ‘vibes are immaculate’. Crypto-centric users find Farcaster to be a better platform than others for being themselves. And there’s a reason for that. Farcaster has historically been walled off and focused on onboarding a core subset of users who were true to the ethos of the industry.

As the protocol opened up, the incentives switched from good content to good on-chain primitives to accelerate the pace at which new users came to the platform.

I witnessed this happening in real time while researching for this piece. Outcasts is a group of NFTs (image below) linked to a Farcaster community named Outcasts. Early morning yesterday there was a mint linked to the NFTs. As far as I understand, only 400 of the NFTs exist and were released by a user named Sumit on the platform.

The creator, who has 3,000 followers on Farcaster, had all of his NFTs minted out and generated about 15 ETH in primary sales. As somebody who has never spent money to acquire NFTs, the collection is a potential purchase in my lists because of how it depicts readers. But here’s what I want to highlight: Farcaster is bridging the gap between social discovery and on-chain interactions. Much of the users that minted Sumit’s art-work found him on Farcaster, and minted the NFT via Highlight in a handful of clicks. Something you cannot do on most Web2 native social networks today. This ability, of a protocol, to interact with third-party tooling, that leads to on-chain activity, is special.

When I had done interviews of artists exploring NFTs, there was a recurring problem — discovery. Even if you had a large follower base, the probability that many of them would convert to consumers of your on-chain primitives — be it in the form of music, games, literature or art — was low. Farcaster has a concentrated user base of Web3-centric users comfortable aping into new primitives and an interface that makes it incredibly easy to interact with a creator’s product.

They have solved the classic chicken-and-egg problem of creators’ not wanting to make content due to a lack of audience base by replacing popularity  games that produce content optimised for algorithms (on platforms like Twitter) with commercial interactions optimised for a loyal audience base (such as minting and other forms of micro-transactions).

Would this stick? I doubt so. As a user named Fil mentioned in this post on Mirror: For Farcaster to scale aggressively beyond the core community of crypto-native people right now would be a death knell. New users would not know what to do, and old members would see the loss of the ‘ethos’ they cherish so preciously. Moderation would go for a toss, and, before we realise it, commerce — the secret sauce powering the incentives around the protocol itself  —  would decline.

So long as Farcaster focuses on staying crypto-native and empowering a new generation of creators, developers and artists to monetise themselves with small audience bases, there’s something of value here. The moment it tries to compete with Twitter, it loses its essence and is no longer special. 

Image from Ilemi’s Dune dashboard.

As it stands, Farcaster has the early adopters, many of whom look for airdrops and simpler forms of capital incentives. Much like NFTs in 2019, frames on Farcaster have to cross the chasm between one-time games and communities that retain users longer. For all we know, there may be a Web3 game launched soon that runs entirely native on Farcaster. It is not farfetched to think something like Snake or Flappy Bird could be launched as a Frame. These games would have elements of speculation, but they would offer good battlegrounds to test how social feed and on-chain gaming could play out.

The New Home Page

It is easy to trash Farcaster today because much of it is plagued by spam mints and growth hackers. And that’s okay. But it is hard not to ignore what they have accomplished with Frames. They have built a simple interface that, with the click of a button, connects on-chain primitives to users in a social feed. At scale, it could be used to incentivise audience bases to share content, run polls native to token holders of a certain token or sell gated access to content. OnlyFans, on-chain, is now a few lines of code away.

0xppl is one of the teams we have been involved with in the recent past with a similar thesis. It helps users surface on-chain activity from their social circles to help discover new products. It feels as though the battle for being the homepage for Web3 native users is steadily heating up. Being a protocol atop which anyone can build gives Farcaster some relative advantages.

If done right, Farcaster could become the home-page for Web3 native audiences. Today, that spot is captured by Twitter and Telegram. Both of which are Web2 platforms that do not allow third-party developers to build apps as they please. My excitement around Farcaster is based off the fact that it stands as an alternative. One where developers have more freedom to tinker and experiment with an audience base that understands the risks involved. But it goes without saying that the path ahead is not all that rosy.

Farcaster faces a fork in its path. In one direction lies the option of retaining Web3 native users longer and having them do more on-chain activity. The other way points towards getting retail users who don't care much about decentralisation but are curious about crypto.

If they choose to take the latter route, the fact that Farcaster is built on Base and has the blessing of Coinbase will play a huge role as it can help with distribution. In my view, they will likely pursue the former. The beauty of Farcaster (as a protocol) is that this decision does not necessarily rest with the team behind Farcaster. That decision is for the communities there to make. 

Unlike Reddit, platform decisions cannot be made unilaterally by Farcaster. Custom protocols that unlock unique functionalities could be released. I, for one, would love to see a client that focuses on long-form content and product strategies alone. I’m sure Sid would rather spend his time with a client that surfaces on-chain gaming primitives and its surrounding ecosystem.

The web, after a long time, feels customisable again. And to me, that holds value. 

Tinkering with warpcast,Joel John