Discovering on Farcaster: Dive into DeSoc Ecosystem
TL;DR
- In February 2024, the decentralized social media (DeSoc) project Farcaster surpassed 100,000 daily active users (DAU), providing a new insight of the marketing strategies of trending Web3 projects.
- Moreover, Farcaster has crafted a narrative that goes beyond a simple ‘Web3 version of X’ by establishing itself in emerging areas like SocialFi and DeSoc.
- This gives us an insight of what the next Web3 social trends might be.
1. What is Farcaster?
Farcaster is a DeSoc(Decentralized Social, “DeSoc”) project that gained attention in February 2024 when its DAU exceeded 100,000. While it has been mentioned with other project such as Bluesky, Mastodon, Lens Protocol, which are viewed as a Web3 version of X, formerly Twitter, Farcaster started to gain attention when it introduced the ‘Frame’ feature.
The basic functions are similar to a combination of X and Reddit. However, Farcaster has quickly reflected Web3 trends as follows:
- By consolidating annual gas fees to a single $5 payment, it addresses frequent gas fee payments common in other DeSoc projects.
- Rapid monetization and referrals through WARP points.
- Easier and quicker onboarding using Coinbase Commerce to support cryptocurrency payments without using Base blockchain or Web3 wallet.
- Convenient NFT minting through the Frame feature.
Particularly, the Frame feature, which allows users to purchase products they like through social media, was highly appealing. Did this feature make Farcaster ‘pop’?
2. Farcaster Traffic and Growth Process
2.1 Narrative and Shoutouts
Among many other decentralized social media projects, Farcaster gained a stronger narrative with the release of new features, promising an optimized blockchain-based discovery commerce experience.
Discovery commerce is a digital marketing strategy that attracts consumers with new products that they suddenly discovered and leads to purchases. This approach has been exemplified by ‘TikTok Shop’. Unlike traditional e-commerce platforms like Amazon, where users search for products they want, platforms like TikTok creates new demand through spontaneous product discoveries, which then converts to purchases. Instagram and Facebook have also enhanced their shopping features, wanting to become discovery commerce platforms from social media.
It is fair to say that previoues Web3 social projects were bringing Web2 functions into a Web3 elements, but Farcaster is proposing new market share by providing simpler purchase flow through blockchain. This suggest that consumer blockchain dapp might soon capture a significant growing industry.
Thanks to its compelling new narrative aligned with the discovery commerce market, Farcaster received shoutouts from well-known figures like Changpeng Zhao and Vitalik Buterin. Especially with the rise of DeSoc alongside DeSci, it showed remarkable growth, reaching 100,000 DAU by the end of January.
2.2 Marketing Support from Strong Backers and Referrals
Unfortunately, many crypto projects points out on their Daily Active Users(DAU) rather than Monthly Active Users(MAU), indicating a lack of trend sustainability. Farcaster, too, recorded a peak daily revenue of $50k at the beginning of February but saw a sharp decline to $818 by March 8, a -98.3% decrease.
According to Dune Analytics, Farcaster saw a downtrend in daily activity, but soon rebounded on February 29th. The decline in daily revenue can be attributed to decreased new user acquisition and inactive minting via Frames.
However, the period from February 29 to March 4 coincided with ETHDenver, the largest hackathon in the Web3 ecosystem, suggesting that existing users who explored Farcaster returned for active participation during the event.
Similar to many SocialFi projects such as Friend-tech, Farcaster saw limited use of the Frame feature among developers and maintaining meaningful social activities. Notably, open-source frameworks like “Frog” and social games such as “Hyperloot” are worth attention.
Farcaster has received considerable expectations for airdrops, supported by referral income through the $WARP token and $30M investment led by a16z crypto with participants like Coinbase and Multichain.
Despite having a strong narrative and the Frame feature, the Farcaster hype did not last long, which I personally attribute to it being an early stage project that has not yet bridged the gap to selling physical goods.
Given the challenges that various utility-based dapps, including DeSoc, face difficulties in linking real-world user behaviors and the physical world, these issues are not unique to Farcaster.
3. Success Formula for Emerging Crypto Dapps
Last year, the new trend of SocialFi led by projects like Friend.tech (Friend.tech), Farcaster, and other minor projects highlighted the commonality among them.
- Utilizing Key Opinion Leaders(KOLs) for marketing on Telegram and Twitter.
- KOL marketing with a referral system.
- Opportunities for airdrops through a points system for referrals and dapp activities.
- Building on Base chains.
The most notable example is Friend.tech, which is a platform using special Key to engage with KOL’s exclusively, saw KOLs earn up to 80 ETH in revenue within two weeks of launch, after distributing referral links. After the success stories, many SocialFi projects including X.pet, followed similar marketing strategies.
While many projects deploy Telegram and Twitter KOL marketing, they often reach a stagnation phase. When the project sees stagnation of their growth, the Coinbase steps in to shout out SocialFi and DeSoc projects built upon Base chain.
Since there are various onboarding methods available with Coinbase Commerce and Base, the Base chain seems focuses more on utility projects that can onboard more people than DeFi. Other thought might be the Base is trying to duplicate the success of Sweatcoin from the Near chain.
Farcaster, too, has seen significant growth, due to frequently shouted out by the Base chain. The amount of mention Farcaster receives from the official Base Twitter gives insight into the close relationship between the project and the chain.
The next trend in SocialFi and DeSoc will likely be driven by projects that satisfy many, if not all, of the listed elements: names backers list for airdrop expectations, KOLs, referrals, points, quick shoutouts from chains (especially Base for social projects), and strong narratives.
4. In Conclusion
By analyzing Farcaster, we visited the characteristics of trending projects from a marketing perspective.
Even setting aside the uncertainty of WARP tokens generation event and airdrop expectations, we see Farcaster have an attractive narrative. Previously it seemed focusing on converting existing Web2 product into on-chain versions, but now it quickly captures emerging narrratives, potentially leading the mainstream adoption of Web3.
Based on our perspectives, It seems Farcaster will be likely to lead mainstream adoption of Web3 by simplifying discovery commerce application and experiences for consumes
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