Rearchitecting social networks: Changing the dynamics of various roles on social networks
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I want to share with you why we have the idea of Desmos and how we are implementing it.
We all know that centralized social networks are corrupt. We also know what this means to us. Our privacy is compromised. Our behaviour is manipulated. The profits of social networks are maximized. There is a lot of people want to disrupt this status quo and we are one of them.
Structural problem of centralized social networks
We want to avoid the pitfall of creating another centralized platform sugarcoated with blockchain the fancy word and repeat the same old problem again. Centralization is like gravity. This cannot be solved only by adopting blockchain technology alone. We need to first understand the root cause of the corruption of centralized social networks.
The rise of social networks follows similar formula:
- It serves a basic social networking need and hence it wins early users.
- It creates features that can help the social network to go viral (like the photo tagging of Facebook) and hence its existing users will get more users.
- With these tractions, it can raise more money to growth-hack more users like a brute force.
- After the users have spent so much time on the social network that make their switching costs become so high, the social network starts to reap the crop. It would monetize by breaching the privacy of the users. Who are paying the bills? Advertisers.
- The social network raises more and more money. It becomes larger and larger. It hires smarter people to breach the privacy and program users’ behavior in a deeper way in order to earn more money.
- It has to fulfil the expectation of its investors: breach the privacy harder to earn more.
- Repeat 3 to 6. Repeat again.
This misalignment between the goals of 4 major stakeholders: the users, the social network, the advertisers and the investors is structural. If we don’t change this formula, we are just repeating the same problem even we can build a so-called decentralized social network. We need to change the dynamics between these 4 types of stakeholders.
Advertisers <> users
One of the major misalignments is the interests between the advertisers and users of social network. The relationship between advertisers and users is like predators and prey.
Our solution is to disarm predators to lower their power. We also need to arm the prey to increase their defence.
Social network <> Users
Social network earns the big bucks by helping advertisers to hack its users. If the relationship between advertisers and users is like predators and prey, social network is the tricky arms dealers who sells weapons to the predator and help them to trap the prey.
Our solution is to diminish the role of a social network as a platform: the users are now able to coordinate in a decentralized manner to perform as a platform. Through the ownership of staking tokens, the users can govern this platform.
Advertisers <> Social network
Social network is now governed by the users through staking tokens. The users should take actions that can maximize their benefit. I assume they will not allow the arms dealers to do something that harm their interests.
Investors <> Social network
Most of the social networks have high burn rates due to the need for paid growth-hacking. That’s why they need to rely on institutional investors early on. Only professional investors with huge amount of capital can afford to invest in these social networks at early stage. They need to get a pie of something like 15% or even more than 30% in order to justify the risks. Once the fundraising starts in this way, the above step #3 will also start and then the #4, #5, #6, #7 will inevitably follow.
If we want to rely less on a few large investors, we need to avoid high burn rates. If we need to avoid high burn rates, we need to rely less on paid growth-hacking. This may also mean rely more on organic growth. Initial distribution of the ownership of the social network play an important role in this which we will cover in the next post.
Desmos Primer Program, which is the series of incentivized program of Desmos, has started. It helps early contributors to understand more about Desmos project. I invite you to try and give us some feedback.
