Variant: Why are we investing in Farcaster?

Original Title: 《 Investing in Farcaster》

Authors: Jesse Walden & Alana Levin

Translation: Shenchao TechFlow

The Farcaster community is a microcosm of the early crypto communities I (Jesse) joined a decade ago: optimistic, technical, ambitious, collaborative, and always online.

For the average everyday user, Farcaster is an emerging but rapidly growing protocol aimed at building a "fully decentralized social network". One notable feature compared to traditional social media is the high-quality, low-noise community atmosphere. This is a direct result of the core team's careful curation of the social graph one by one and the efforts of early enthusiasts over the years.

For technologists, Farcaster's promise is a new distribution channel containing permissionless building blocks that unlock the crypto potential many of us come here to pursue: permissionless identity, currency, and data.

• Identity: Every identity in the network is associated with a crypto wallet. Every post, message, and click on the network is signed and tagged with the relevant FID. This is powerful because it means all interactions are authenticated in a self-sovereign manner. For users, history can be verified. Developers can also interact directly with users, building a holistic view of their profiles without permission, not just on Farcaster, but even on-chain.

• Currency: Since each Farcaster account is linked to a wallet, the ability to send and receive payments is a native feature of the network itself, unlocking functionalities like tipping, minting, crowdfunding, and asset creation. The result is a significant reduction in transaction friction.

• Data: All social data on Farcaster is stored in a distributed central network. The goal of the Farcaster protocol is to incentivize decentralized data storage, giving users and developers confidence that their data won't be removed by the platform. This has a dual effect: trust attracts high-quality developers to the ecosystem, while enduring openness means that businesses built around the network can create richer experiences than their Web2 counterparts.

A notable example is community currency, which leverages the network's open social graph and connected wallets, allowing users to tip and earn income.

Frames are another noteworthy example. These interactive mini-apps exist as posts in the social feed but can also be displayed in any application that embeds wallets, enabling developers to meet users where their wallets are. Frames verify the identities of interacting users, facilitate payments, and unlock additional functionalities using users' on-chain and social data. We have seen various interesting Frames, such as embedded stores, minting platforms, mini-games, and payment interfaces. We even built a Frame to help the community learn about another investment project, Botto, which has relied on Frames as a distribution channel and conducted numerous auctions through the network.

So far, around 400,000 users have joined the network, primarily testing it through Warpcast—the first client on the protocol. The development of channels as features of Warpcast has created a unique, subreddit-like feel, allowing users to find deeper communities within the network.

At the protocol level, significant developments have transformed the network from requiring permission to being permissionless. The core functionalities of the network—including Frames, cast actions, and upcoming channels—continue to progressively decentralize, facilitating the emergence of an early additional client ecosystem.

Our team is thrilled to participate in this network as users and builders. Each member of our team manages channels like 0to1, soundscapes, countrymusic, and Frames Hackathon, and the Frames hackathon we held in the office was filled with that kind of fervent energy typically found only in the most exciting new scenes. We also support teams like Nook, Kiosk, and Farworld Labs, which are helping to scale user adoption and enrich client diversity on the network. Supporting early teams and supporting Farcaster go hand in hand: when third-party businesses can continuously build on the protocol, the protocol succeeds. The more teams dedicated to onboarding new users, the better.

This leads to the topic of the Merkle team, the company behind Warpcast and a core contributor to the Farcaster protocol. Building and maintaining an excellent product and a complex decentralized protocol simultaneously is no easy task, but doing both often represents the best way to launch. Dan and Varun have built one of the most efficient and highest-quality technical teams in crypto, and they are continuously growing.

For these reasons, Variant, along with other new investors Paradigm, USV, and Haun, invested in Farcaster's Series A funding. While we focus on the early cryptocurrency space, we occasionally adjust our rules when valuable opportunities arise. For Farcaster, its core team, early developer ecosystem, and user base represent the best of crypto in terms of capability, attitude, and ambition, and we are excited to be involved and continue contributing to the network's development.