Farcaster: How decentralized social media users grew from 100,000 to 1 billion

Translated by: Yangz, Techub News

Dan Romero, co-founder of the decentralized social network Farcaster, announced on Wednesday that Farcaster has completed a $150 million Series A financing with a valuation of $1 billion, led by Paradigm, with participation from a16z Crypto, Haun Ventures, Union Square Ventures, Variant Fund, Standard Crypto, etc. Since becoming a permissionless social network in October 2023, Farcaster has had 350,000 paid registered users and a 50-fold increase in network activity. This year, Farcaster will focus on the growth of daily active users and add developer primitives such as channels and direct messaging to the protocol. Dan Romero said, "In the next few years, we will double down on Farcaster's vision and truly develop it into an Internet-scale protocol."

According to Dune Analytics created by Pixelhack, Farcaster's daily active users reached nearly 45,000 on May 20, a 30% increase from the activity boom caused by the launch of Frames (a feature that turns posts into interactive applications) on February 11. But this data is far from mainstream social media giants such as Facebook, TikTok and X (formerly Twitter).

As a leader in decentralized social media protocols, how does Farcaster achieve this goal? To this end, Unchained conducted an interview with Farcaster's two co-founders, Dan Romero and Varun Srinivasan. The two founders spoke about a range of topics, including their upcoming decentralization plans, their current views on the cryptocurrency social network landscape, and what they learned during their time at Coinbase. Here are the highlights of the interview.  

Q: Farcaster's decentralized channels are coming soon, can you tell us more about this?

Dan Romero: We believe that allowing channel creators to choose whether the community sets a certain economic model is necessary, whether in the form of subscriptions or requiring users to purchase specific assets to gain access, and this flexibility can lead to higher quality output. Being a community mod is no longer a thankless job, and outputting high-quality content can be rewarded accordingly.  

This is the advantage of channels. It's like a subreddit, but the creator owns the channel and has the flexibility to manage it and add economics in any way that makes sense.  

Q: What's the difference between channels today and the decentralized channels that are being developed?

Dan Romero: Channels today are centrally managed and stored in the Warpcast database. But the channel content, the casts (similar to tweets or Reddit posts) are all on the protocol, so they are permissionless, and the metadata and curation capabilities of the channel are not part of the protocol. They only exist in Warpcast.

Varun Srinivasan: If you create and set up a (decentralized) channel, all the data, everything, from the channel icon to the information feed, can run on multiple different clients. All the data is decentralized, and any application built by anyone can display the same version of the channel. And the channel creator actually has control over their own channel, which means that if the creator wants to give ownership of it to a friend, they can. Or, after accumulating a group of fans, the creator wants to sell it to others, which is also ok. The channel creator is free to do so.

Q: How much effort do you put into the decentralized governance of Farcaster?

Varun Srinivasan: Our decentralized governance model works very well, which is called rough consensus and running code. IETF uses it to create all network standards such as TCP-IP. It is so powerful because there is no rigid structure. Its logic is also very simple, that is, if you can create something useful and convince the majority of people that it is useful, then you can release it.

Someone is responsible for managing the Farcaster Hub (the node in the network that stores data). Someone is responsible for developing applications that talk to the Hub to extract and generate data. There are also users who use these applications. These three groups check and balance each other. ... (Therefore) you have to launch something that most of the three groups think is good. Otherwise, they will show their preference through practical actions. Hub operators can run old versions. Applications can choose different Hubs. Users can also choose different applications. All of these ultimately act as checks and balances to prevent someone from forcing something through that is detrimental to the broader interests of the network.

Dan Romero:Right now, we are focused on keeping governance simple, increasing the total number of daily active users, and then launching truly useful developments. We could spend a lot of time building complex and circuitous governance structures, but that doesn't help achieve our goals.

Q: What is the most important philosophy during the transition from centralized exchange Coinbase to the determination to build a decentralized social network?

Dan Romero:Despite people's concerns about Twitter's development after Musk took over, Twitter's network effect is more sticky than I (initially) thought. We entered the market in 2021, when we found that "people in the cryptocurrency space talked a lot about decentralization and the need for other applications in the ecosystem." Then we naively thought, "Great, there will really be people who want to play with new things." However, it turns out that (users) would rather continue to use existing products.

We really want to provide people with truly useful products. This has profoundly changed our thinking over the last few years… Ultimately, the only way we win is not by architecture, but by building products that people love.

Varun Srinivasan:Early in the early days, we realized that we were spending the same amount of time onboarding users and developers. We quickly realized that building apps and social products is really, really hard. It took us about 20 people a year to build Warpcast (the Farcaster client). It’s unrealistic to expect other teams to show up on day one and decide to spend 100% of their time on Farcaster when there are no users.

It’s only by building clients, telling stories, and getting users on board that Farcaster becomes more valuable to developers over time, and that’s what’s most useful. It’s not about, build me an SDK, a toolchain, or add a feature. It’s about, can you get 10 times more people using this product? That’s the biggest shift in our mindset since the early days.

Q: What did you learn from your time at Coinbase that you can use to guide the development of Farcaster?

Dan Romero: From my experience at Coinbase, I firmly believe that the average person doesn't care about everything you're building. They just want an app that works, and it all starts with the user logging in. In fact, it even starts before that, how do you position the product and explain it to them?

We can do better at this. The problem with Farcaster and Warpcast right now is that people are confused. We're not even competing with fintech apps, we have to compete with the best social media apps in the world.

So once users are in the app, is it interesting enough to keep them coming back? A lot of crypto users like to compare crypto apps, and the reality is that if your app isn't that interesting, they'll go back to TikTok or YouTube.

Varun Srinivasan: Another thing I learned from Brian Armstrong is to always focus on building something people want, no matter what happens to the primitives. He said that things are never as good as they seem, and never as bad as they seem. One reason Coinbase has been successful is that it has always been outputting and building, whether the market is at a low or a high. We have experienced multiple cycles in the cryptocurrency field and have seen this strategy in action firsthand, and we know that long-term focus is the real way to win.

Q: The cryptocurrency social media ecosystem currently has players such as Farcaster, Lens, Nostr and Friend.Tech. How do you see the current landscape?

Dan Romero: Compared to centralized social media such as Facebook, which has billions of users, the total number of cryptocurrency users is not important. We are talking about tens of thousands of users (total) of all decentralized social media, and they may be the same group of people as the 100,000 users who use cryptocurrency every day.

We are interested in how to grow the number of users of cryptocurrency applications from 100,000 to 1 billion step by step. I don't think there is any use in focusing on competitors. The key question is: what do people want? What do people find interesting? If you can make the content interesting and fun for users to use every day, then developers will come. Nothing else matters.

Varun Srinivasan:These competitors are all taking slightly different paths, and our goal is very clear, which is to do business in the cryptocurrency space, allow users to build their own communities, and allow developers to create applications for these users.