The Future for Web3 Social Networks: Prioritizing UX

Li Jin, previously associated with a16z and now co-Founder & GP of Variant, introduced two main approaches to web3 social.

The Asset-First Approach: This approach places a strong emphasis on financial incentives and ownership of digital assets within the social experience. It involves incorporating elements like NFTs, crypto tokens, virtual goods, or digital collectibles. Users are motivated by the potential profits they can gain from trading or holding these assets, catering primarily to their financial motivations. Engagement is driven by speculative interest and asset appreciation, with the value accruing in users’ wallets through market dynamics. Some examples of platforms following this approach are BitClout, Lens Protocol, Steemit, and Stealcam.

The Ideology-First Approach: This approach centers around users’ ideals and prioritizes decentralization, privacy, security, and censorship resistance by leveraging blockchain architecture and trustless protocols. It appeals to users who value freedom of expression, transparency, and control, with engagement primarily supporting and reinforcing the ecosystem. Value is derived from upholding human credos encoded in the protocols, and the social experience may resemble centralized platforms in some cases. Platforms following this approach include Bluesky, Cyber, and Mastodon.

However, a third approach that has seen trends around it:

The UX-First Approach: In this approach, the primary focus is on user experience, aiming to deliver core user value by solving pain points and creating delightful experiences. While incorporating crypto/web3 elements, the emphasis lies on enhancing the core value proposition rather than solely relying on novel technology for adoption. The product experience takes precedence, and crypto features serve to augment it. For social platforms, this could mean first prioritizing community building, content creation/sharing, and discussions before layering on trustless protocols and token-based incentives. This approach adds value in terms of privacy, portability, community governance, and monetization opportunities. Some examples of platforms embracing the UX-first approach are Farcaster (warpcast), Minds, and Cyberconnect.

Elevating User Behavior: Threads as a Case Study in Convenience

According to Twitter co-founder Evan Williams, convenience is the ultimate driving force shaping user behavior. A prime example of this is Threads, which swiftly amassed 100 million users in just five days. This achievement was made possible by leveraging the ease of portability and interoperability within the Meta ecosystem. Here’s how Threads achieved this feat:

1. Exploiting Network Effects: Threads harnessed a pre-existing notification system, prominently displaying the activities of users’ contacts and influencers. By doing so, it fostered powerful network effects, enticing users to engage more actively.
2. Ensuring User Lock-In: To mitigate churn, Threads implemented a clever mechanism: users can only delete threads if they delete Instagram, creating a sense of lock-in that encourages long-term usage.
3. Diversifying Online Presence: In contrast to certain counterparts like Twitter, Threads sought to offer users greater optionality along less ideologically driven lines, providing a more diverse online presence experience.

WhatsApp’s early success can also be attributed to its automated scanning of user phonebooks, instantly connecting them with friends already on the platform, without requiring any manual effort. Meanwhile, Slack’s seamless integration with other work apps, such as Google Drive and Trello, provided users with convenience through interoperability, allowing them to access various tools without switching apps, increasing overall utility and user retention.

The UX-first approach recognizes this powerful phenomenon and foresees a potential flippening (or inflection point) for web3 native social apps compared to their web2 counterparts. Rather than primarily relying on tokenomics or ideological motivations, the success of these web3 apps will hinge on their ability to complement and amplify the core objective of convenience.

Comparing Social Platforms: Essential Metrics for Each Approach

To effectively compare social platforms across the various approaches, we can use viable metrics that encompass the following measures:

Ideology-First Metrics:

1. % of On-Chain/Off-Chain Data Storage: This metric evaluates the level of decentralization within the platform, providing insights into how data is stored and managed.
2. Encryption Methods Used: An indicator of the platform’s commitment to privacy, the encryption methods employed demonstrate its dedication to safeguarding user data.
3. Moderation Transparency Stats: This metric assesses the platform’s openness about its moderation practices, shedding light on how content is regulated and ensuring transparency.
4. Blockchain Governance Mechanisms: A crucial aspect for ideology-driven platforms, this metric gauges how decisions are made and protocols are governed.
5. Censorship Resistance Benchmarks: Evaluates the platform’s ability to resist censorship and maintain freedom of expression.
6. User Control of Data: Factors like editability, transparency, and portability of user data determine the extent of control users have over their information.

UX-First Metrics:

1. Retention and Engagement Rates: Crucial indicators of user satisfaction, these metrics measure how well the platform retains and engages its user base.
2. User Satisfaction/Net Promoter Scores: Gauges user contentment and loyalty, providing valuable insights into how users perceive the platform.
3. Active User to Total User Ratios: Reveals the proportion of active users in comparison to the total user base, indicating how engaged users are with the platform.
4. Interoperability with Other Web3 Apps and Networks: Assesses the platform’s ability to seamlessly integrate with other web3 applications and networks, enhancing its utility.
5. Feature Usage Data: Measures the adoption and utilization of different platform features, reflecting user preferences and needs.

Asset-First Metrics:

1. % of Users that are Token Holders: Determines the portion of users who hold tokens on the platform, indicating the level of financial participation.
2. Revenue from Token Transactions: Measures the platform’s financial performance derived from token-related transactions.
3. Ratio of Financial Features to Non-Financial: Assesses the balance between financial and non-financial features, offering insights into the platform’s focus.
4. Asset Holding Concentrations — Inequality Metrics: Examines the distribution of assets among token holders to identify any potential wealth concentration.
5. Correlation between Token Activity and Engagement: Analyzes the relationship between token-related activities and user engagement on the platform.
6. Native Asset Yield Opportunities: Evaluates the opportunities for users to gain yield or financial benefits through the platform’s native assets.

By using these comprehensive metrics, we can effectively evaluate and compare social platforms across different approaches, providing valuable insights into their strengths and areas for improvement.

After browsing and analyzing social media platforms on both web2 and web3, scores have been assigned to each platform based on the metrics listed above. Note: The assigned asset-first, ideology-first, and value-first scores to the social platforms mentioned below are purely subjective estimates for illustrative purposes. These comparative scores serve as a conceptual framework based on publicly available information and may not precisely align with the platforms’ perspectives or goals. Please interpret these figures as directional indications only:

Web2 Social Media Platforms

Twitter MAU: www.businessofapps.com/data/twitter-statistics

Insta MAU: www.businessofapps.com/data/instagram-statistics

Meta/Fb MAU: www.statista.com/statistics/264810

TikTok MAU: www.businessofapps.com/data/tik-tok-statistics

Linkedin MAU: https://99firms.com/blog/linkedin-statistics/

TruthSocial MAU: https://earthweb.com/how-many-people-use-truth-social/

Web3 Social Media Platforms

Mastodon MAU: https://www.bankless.com/the-status-of-web3-social

Farcaster MAU: https://farcaster.network/

Lens MAU: https://dune.com/kimi/lens-protocol

Deso, formerly Bitclout MAU: https://www.bankless.com/the-status-of-web3-social

Cyberconnect MAU: https://www.bankless.com/the-status-of-web3-social

Steemit & Odysee MAU: https://focusonbusiness.eu/en/news/odysee-s-mau-of-5-3-million-makes-it-the-most-popular-decentralized-social-media-platform-in-2023/5576

Long-term Strategies for Success in Web3

To achieve long-term success, early-stage adherence to decentralization principles can establish the necessary legitimacy for seamless user experiences in the future. Conversely, leveraging initial financial incentives may foster network effects and rapid user acquisition, allowing platforms to later focus on optimizing user retention through convenience. Additionally, established players embracing web3 capabilities amid growing crypto acceptance presents another viable pathway. The defensibility of each approach may correlate to its specific principles, with ideology-first platforms fostering loyalty, asset-first models being susceptible to imitation, and UX-first strategies hinging on exceptional execution.

The optimal sequencing of these strategies is likely to vary based on the type of app or protocol in question. For utilities like social governance, a smooth transition from ideology-driven principles to a user-centric experience may be most suitable. On the other hand, entertainment platforms could initiate engagement through asset monetization before concentrating on maximizing user retention through an exceptional user experience.