Blueprint for a compelling web3 open social protocol or platform
We're still hunting for that unicorn.
Having reviewed a large number of pitches for web3 social projects, I’ve compiled a modest list of what I’d look out for (and what is sometimes missing from pitches) in an investible open social protocol/platform1. Hopefully this list is useful for you if you’re interested in web3 social and are either building or investing in the space.
But first, what is an open social protocol? Open social protocols like Lens, Farcaster and DeSo enable the recording of user profile, content and interaction data on a public blockchain, allowing users to share their data with or utilise their data in multiple apps of various types (e.g. social media, finance, gaming) using a single account, typically represented by a wallet address. As users engage with these apps, each app contributes additional data to the user's profile on the blockchain. The protocol serves as the underlying infrastructure for developers to create apps (essentially front-end experiences that read/write user data on a blockchain), granting users ownership of their data and potentially greater control over how, when, and where it is utilised. Instead of creating a new account for each social app, users “bring-their-own-account/data” to any app they choose to interact with, simplifying their online experience by having a single wallet for navigating the web. For more details, see this article.
So what would I look out for in an open social protocol?
Use of key web3 primitives: Building a web3 version of a web2 social network like Facebook, Instagram or Twitter just because we can and just to enable decentralisation and censorship-resistance isn’t going to be a meaningful proposition for most users. Most social network users don’t care about centralisation or censorship and offering to address these “problems” with a web3 social protocol isn’t going to win users over from web2 incumbents. We want to see if/how the protocol is using the key primitives of web3 - ownership, portable data, portable identity, composability, and incentive networks - features that are uniquely made possible by the blockchain, to do things that couldn’t have been done before in web2. Not to say that these web3 primitives will automatically be meaningful and appealing to users (just like decentralisation and censorship-resistance). We’ll want to understand how features built around these primitives will add or create new value for users. For example:
Ownership could translate into giving users more tangible and intuitive control over how their data is used, and could enable novel and innovative experiences in cases where it’s meaningful and valuable for a user to voluntarily “claim” or verify ownership of their data, e.g. being recognised or rewarded for being a superfan of a musician or sports team by verifying ownership of data that indicates the user’s preferences and degree of engagement with the musician’s or team’s online content and properties.
Portable data and identity could allow users to reuse their data and identity across multiple social products in a frictionless way, such that the user’s data/identity is no longer restricted to the platform where it was generated (e.g. where the user’s likes/preferences were originally expressed). So in the earlier example, a musician’s superfan could verify their status as a superfan on the musician’s website to access loyalty benefits, on a third party music/merchandise retailer for discounts, at a concert venue for VIP seats, etc., without any of these entities having to connect directly with each other or use a centralised single-sign on platform like Facebook login (which would control their access to the data).
Composability could open up new ways for developers and creators to create new social products, user experiences, channels and content, as well as innovative unbundled, re-bundled, decomposed and recomposed products, platforms, apps and services. If we extend the idea of “money legos” (e.g. open source reusable smart contracts encapsulating some functionality) from decentralised finance to decentralised social, what would be the analogous atomic composable elements that could be represented as “social legos”, and what could we build with these “social legos”?
Incentive networks could provide a way for users to share in the financial returns as a social protocol/platform grows in value, including cases where that value is derived from advertising. (More on this below.)
These are just a few directional ideas that developers could play with while building new social products using web3 primitives.
Sharing of revenue/value with users: Expanding on the previous point, token incentive networks could provide a mechanism for social protocols to capture and share revenue generated from the use and monetisation of user data, time, engagement, etc. (through advertising or other means) with those users who provide their data/time/engagement. This means that users can voluntarily bring and “rent” their user profile data (e.g. content/product preferences), time or engagement to the platform to be monetised, while getting a share of the financial return generated. The protocol can be creative about how it shares that return back to users, since money might not be the only form of reward that users value. Similar to web3 game token economies, in order to share value/revenue back to users, the platform must have some form of value/revenue inflow (from advertisers who are paying to reach users, other users who are paying for something on the platform, etc.).
Ecosystem strategy: Sharing value/revenue with users could be part of a broader strategy of designing a social protocol/platform as an ecosystem, where third parties can develop apps on top of the protocol, utilising the data that sits within the protocol (and beyond, if there’s composability and interoperability across different social protocols), in order to generate value for users and increase the value of the ecosystem (potentially measured as user retention and lifetime value or LTV). Taking a leaf from some web3 games, where players can engage in different gameplay styles, take on different roles in the game world/ecosystem, and are bound together by an open economy, a social protocol could be similarly designed and operated as an open economy and ecosystem, where users, content creators, community owners, brands, and other new types of participants interact with and add value to each other across a tokenised economy, collectively growing the value of the platform both in terms of utility and financial value. In this broader scenario, revenue/value is potentially shared not just with end-users, but across all participants in the ecosystem. As part of this, the social protocol should also capture some of that value for itself (e.g. through a token, transaction fees, or other protocol-wide revenue model) so that it can be financially sustainable and profitable.
Crypto-native features: A social protocol can further differentiate itself from web2 social platforms by offering crypto-native features such as on-chain ownership, permissions and controls, for users to fully own and control access to and functionality/utility for their communities. Such a protocol could enable not just token-gated access to communities (for members), but also monetisation of communities (for creators/owners) through sale of tokenised access (one-off or subscription-based) or assets (which could also generate royalties from secondary sales), fees from digital goods/merchandise transactions, as well as transfer or sale of ownership of the community itself2. Towns’ vision of “ownable town squares for online communities” is one such example, while tools for automated workflows and proposals like StationX and engagement/rule-based access management solutions like Supercluster Airlock are examples of specific crypto-native features.
Privacy protection: The flip side of user data being recorded on an immutable public blockchain is that users need a way to control access to their data by third parties. By default, anyone can view (and use) any data recorded on the blockchain without the owner’s consent and no one can delete it.3 This is clearly a privacy conundrum that a social protocol will need to solve, perhaps by segmenting user data into a) data that the user is comfortable being public and can therefore be stored on the blockchain and viewed/used by anyone (think Twitter or Farcaster posts), and b) private user data that’s stored in an access-restricted (centralised?) and/or encrypted (but decentralised?) way combined with a privacy model for users to control, allow and revoke specific third-party access to the set private data that they verifiably own, possibly using zero-knowledge proofs which could allow third parties to utilise the data without seeing or storing it, so that private user data can be viewed, used and attributed in a privacy-preserving way.
Destination site/app: Ideally, the social protocol shouldn’t be limited to an infrastructure offering, but should also provide a compelling end-user use case with some traction or proof of concept demonstrating that users will want to engage with the site/app as a destination because they get some utility or value out of it. Typically, such an app would have a hook (like a core game mechanic) - something that users will want to do obsessively in the app - posting content, watching videos, liking, messaging, swiping, etc4. This might be developed in-house by the team building protocol, or by a third party developer within the protocol’s ecosystem. Either way, it’s prudent to acknowledge that social protocols need users, and users don’t need infrastructure. They need a compelling use case that solves a problem, meets a need, or provides them with incremental value (utility, entertainment, enjoyment, etc.).
Go-To-Market (GTM) and user acquisition (UA) strategy: Much like a web2 social platform, for a social protocol to be successful, it needs a large number of users in order for network effects to kick in. To this end, a successful social protocol will need to execute an effective and extensive go-to-market strategy to acquire and onboard a large enough number of web2 users to be considered competitive with web2 social incumbents. With web3 projects, there may be creative and token incentive-based strategies for GTM and UA to overcome the “cold start problem”, but we sometimes underestimate the height of the hurdle that must be surpassed before momentum can build and network effects can operate, especially when incumbents have so much more of a lead in terms of user numbers.
Team with both social and crypto pedigree: Finally, I think a successful social protocol team will be one that understands the web3/crypto space in terms of what it can uniquely offer users beyond web2 and how to operate within it, as well as the web2 social space in terms of what social users want and how to onboard them.
Can we find a unicorn social protocol that encompasses all of the above (and more)? Or will a successful social protocol build upon key web3 primitives, share value with users, and be designed as an ecosystem, while crypto-native features, privacy protection and the destination app are created by third parties in the ecosystem? Either way, it’s not a given that web3 social will succeed. Web2 social is broken, but users may not be ready to leave it. They might not care. The onus is on web3 to offer a better alternative, not just something that can do the same thing but with tokens. For that, we need to look to the things that web3 can uniquely do, that web2 cannot, and make use of them in ways that create new value, both financially and, more importantly, utility-wise, for users of social products. Good hunting!
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I use protocol/platform here to indicate the ambition to build something more than an end-user/consumer application that farms users’ engagement and time.
Imagine a football club, including its global fan community, represented, managed and monetised on-chain, and being sold from one owner (perhaps the original creator) to another, without the need for intermediaries.
Perhaps it’s more accurate to say that you don’t own (as in control) the data, but you can verifiably prove that the data “belongs to” you, i.e. you can “claim” it, all while the data resides on a public blockchain for all to see. (You can also prove that the data originated from you, or passed through your hands, if appropriate.)
And in the current landscape with incumbents already utilising these hooks, a new social protocol destination app would need to offer users a new hook or activity to be compelling.