Author: Haotian Source: Twitter
What do you think of Paradigm leading the investment in the decentralized social protocol @farcaster_xyz? I believe many people will have questions: 1) Is a $1 billion valuation in the A round expensive? 2) What is the difference between it and social protocols such as Nostr and Lens? 3) What is the technical architecture principle behind it? 4) What opportunities will it bring to the social sector? Next, let me briefly talk about my understanding:
1) Although many high-FDV and low-circulation tokens have been controversial recently, there is a voice saying that VCs have contributed to the existence of such "peak-online" vampire projects. Without commenting on other projects for the time being, for Farcaster, is it expensive to raise $150 million in the A round with a valuation of $1 billion? I don't think it is expensive.
Because Farcster is not just a protocol limited to the web3 field, it has the potential to rush to Web2 to solve the privacy protection and data ownership of social platforms, especially the problem of advertising information flooding. From the perspective of the web2 valuation system, it is not expensive at all. Most of those projects with high FDV but bleak reality are due to the huge contrast between established expectations and realized value. In my opinion, the expected value currently shown by Farcaster can support the 1B VC valuation.
2) Farcaster and the familiar Nostr, Lens, etc. are three different decentralized social network protocols. Through observation and analysis, I believe that Farcaster is easier to implement and can capture a wider range of market value.
Nostr is a minimalist P2P messaging system, which is more inclined to the design of the upstream communication architecture layer. It has great disruptive value for the future, but lacks a strong application market drive and is still in the conceptual stage;
Lens emphasizes the ownership and interoperability of user data, and has a deeper binding with the current framework of blockchain, but it is too dependent on the incentive expectations of Tokenomics, resulting in the slow development of its application ecology;
Farcaster uses a decentralized identity layer (on-chain) and an interoperable application layer (off-chain). Putting aside the message storage rental and communication incentives at the protocol layer, the first Warpcast client alone has accumulated nearly 400,000 users, and its growth potential is obvious.
Nostr once made many developers obsessed and then helpless, while Lens was controversial because Tokenomics was delayed. In contrast, the Farcaster Protocol combines on-chain and off-chain environments and has better fundamentals for a social Alpha platform. Whether it is the word-of-mouth experience of early users or the emergence of community assets such as $DEGEN, it gives people a sense of "full of value" growth expectations.
3) Farcaster's technical operation architecture, to put it simply, is built on OP Stack and consists of two major parts: on-chain protocol (ID) and off-chain protocol (storage + communication + client):
The on-chain part is mainly responsible for the creation, management and storage of user identities, with the purpose of generating a key pair linked to the account's Ethereum address on the chain, so as to facilitate data matching and retrieval after the user transfers the client later;
The off-chain part is divided into a back-end information storage system and a front-end user interaction system:
The back-end is equivalent to Nostr's Relay information storage and forwarding operation system, which is used by many Hubs nodes to store user data and distribute it between node networks;
The front-end is operated by some clients similar to Warpcast, which has achieved healthy growth with the help of the innovation of Frams' interactive applications, as well as operating mechanisms such as paid registration and Channel creation and subscription, with the goal of providing users with an interactive experience comparable to that of web2 social platforms.
It should be said that Farcaster's overall technical architecture framework is not complicated. It draws on the strengths of many others. It not only adopts the essence of Nostr's decentralized backend communication architecture, but also adopts the Warps points system to avoid the problem of sustainable growth of pure token incentives. In particular, Frams's front-end interactive experience innovation similar to mini-programs is particularly in line with the preferences of web3 user groups, and the payment end is naturally connected to the web3 wallet environment, making it easier to onboard high-quality user groups with payment habits.
Overall, the growth expectations and potential shown by Farcaster will accelerate the implementation of the decentralized social protocol ecosystem, and I am very optimistic about it.
The above
I think Farcaster should not be classified as SocialFI, and DeSoc may be more suitable.
In the short term, Farcaster will not be too popular because its registration threshold and paid experience will block most ordinary users from flowing in. However, from a long-term perspective, this will prevent it from falling into the vicious circle of SocialFI's short-term explosion and then decline. It will truly attract long-term users who have real social needs and care about data privacy and data ownership. It is worth continuing to lock in and pay attention to its development.
Note: My personal Warpcast account has been opened, ID: haotian, and I have also created a Channel ID for the Chinese community: crypto-cn. No matter how much I say, seeing is believing. You will know for yourself after experiencing it.
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