Can the social leader Farcaster, valued at 1 billion, become a new breakout point in the bull market?
Farcaster significantly enhances user interaction smoothness by storing value data on-chain and high-frequency data off-chain.Author: Biteye
Farcaster is a decentralized social network protocol that utilizes smart contracts and hybrid storage technology to enable social connections, content sharing, and data ownership among users, while supporting diverse and flexible client and application development.
In March of this year, the memecoin project Degen within the Farcaster ecosystem gained widespread attention with over 20 times growth and a market capitalization exceeding 1 billion USD, making the Farcaster ecosystem a focal point of interest.
In May, Farcaster's developer Merkle Manufactory announced the completion of a new round of financing, led by Paradigm, totaling 150 million USD, raising the company's valuation to 1 billion USD.
According to Dune data, the total number of users on Farcaster has reached 540,000, with daily active users surging from 2,000 at the beginning of the year to the current 56,000, achieving over 28 times growth.
Farcaster is not a new social project. During the early testing phase, founder Dan leveraged his personal influence and connections to invite many well-known OGs, including Vitalik Buterin, to join, while also screening early users through Twitter DMs to obtain invitation codes, resulting in a user base with a high concentration of "elites."
This approach of setting thresholds aims to initially gather a highly similar user group, making Farcaster, to some extent, a refined version of Twitter, where early users can enjoy a higher quality posting and interaction experience.
Moreover, early qualified users are often influential KOLs, who possess significant social influence themselves. Experiencing Farcaster early may create a sense of social superiority, and they are more motivated to discuss and spread Farcaster on other platforms.
In October last year, Farcaster opened registration but still set a $5 entry threshold, effectively blocking a large number of bot accounts and maintaining a good atmosphere overall, contrasting sharply with Nostr, which had declined due to bot proliferation.
As of now, through registration fees and data storage fees, Farcaster has accumulated nearly 1.9 million USD in revenue.
The two founders of Farcaster, Dan and Varun, both held significant positions at Coinbase, which closely ties Farcaster to the Base ecosystem. Jesse, the core leader of the Base chain, is also very active on Farcaster.
From another perspective, among the top 500 users with the most followers on Farcaster, over 70% of on-chain interactions occur on the Base chain.
Therefore, for those optimistic about the Base ecosystem, Farcaster is also seen as a potential treasure trove of Alpha.
Farcaster protocol data is stored in both on-chain and off-chain hubs, allowing developers to choose to run their own hub nodes or use third-party service providers like Neynar to access data.
All this data is permissionless, and based on this available data, developers can build various clients and applications, significantly increasing the richness and innovation space of the Farcaster ecosystem.
Users can track the progress of the ecosystem through the decaster website, and here are some highlight projects.
WrapCast
Warpcast is the main application under the Farcaster protocol and the first Farcaster client, developed by a top engineering team assembled by Dan over more than a year.
Its overall architecture is similar to traditional Web2 social software, providing a smooth user experience, currently accounting for 90% of the traffic on the Farcaster protocol.
The registration process for Warpcast is simple; the system automatically generates a bound wallet for users, and all Warpcast accounts are associated with a Farcaster ID, with generated content stored in the Farcaster hub.
This design allows even non-cryptocurrency users to easily enter the on-chain world, significantly lowering the cognitive barrier for new users.
For users familiar with on-chain interactions, they can also bind their commonly used cryptocurrency wallets. These adjustments have made Warpcast user-friendly while also playing an important role in promoting the growth of the Farcaster ecosystem and user acceptance.
Warpcast is designed as a social platform similar to Twitter, where users can post tweets (casts), comment, retweet, and follow other users.
In addition to Twitter-like social media functions, Warpcast also introduces features like channels and actions, leading to more interactive ways.
For example, DEGEN utilizes user engagement within the Farcaster ecosystem to distribute tokens, allowing users to participate in DEGEN's airdrops by following channels and interacting; the airdropped tokens can be given as tips to other users.
Farcaster's significant growth this year is closely related to the launch of the Frames feature in February. Frames are mini-apps embedded in Warpcast, allowing users to engage in more diverse interactions without leaving Warpcast, such as minting NFTs, content subscriptions, playing mini-games, and claiming tokens.
For instance, far.cards is a collectible card project developed based on mint.club, exclusive to Farcaster users, where each user's card attributes are determined by their activity level on Farcaster, such as the number of followers, likes, and replies received.
The price of the cards is determined by a bonding curve, and the purchased cards can be collected or traded.
As shown in the image, the far.cards application can be published in tweets in the form of Frames, allowing users who see the tweet to directly purchase their cards through that Frame without leaving the Warpcast client.
The launch of Frames has greatly enriched the playability of Warpcast, making Farcaster development no longer limited to building a decentralized Twitter.
Currently, nearly 40,000 users are using the Frames feature, generating over 150,000 on-chain transactions, with the number of designed interactive contracts reaching 1,624.
Frames are similar in user experience to MiniApps in the Ton ecosystem. Although Farcaster currently struggles to have a large user base like Ton, attention should also be paid to simple and easily spreadable Frame mini-games like Not a coin on Ton.
Referring to the success of the DEGEN project in market capitalization and dissemination capability, it is entirely possible for projects on Farcaster to distribute high-yield tokens through Frame mini-programs.
Degen.Game is a website that organizes Frame mini-programs, where users can log in with their Farcaster identity, view the latest Frames daily, and interact.
Jam
Jam is a creator economy platform based on Farcaster that can convert every tweet by users on Warpcast into NFT assets similar to Friend.tech Keys, allowing users to buy/sell each tweet, with prices determined by the bonding curve shown in the image.
Jam surpassed 10 million USD in trading volume within 72 hours of launch.
The first use of Jam requires consuming 10 warp points, which are gifted 100 upon registering for Farcaster.
After binding the Farcaster account, users can view the feed on the homepage to find tweets worth minting. The Top leaderboard includes tweets with the most recent trading activity and the latest tweets, while the Trades section displays real-time records of tweet transactions.
Unlike Friend.tech, each tweet can only have one owner at a time, so there is no situation of hoarding a bunch of openings and then dumping them. However, the profit strategy is similar, requiring early identification and purchase of potentially viral tweets, focusing on figures like core Farcaster developers, Vitalik, KOLs, etc., to ensure there are other buyers to take over later.
If one is a KOL or has a good sense of the internet and excels at tweeting, they can also earn a 5% transaction fee by continuously writing tweets that go viral.
Jam currently does not have a token but has internal points. The overall gameplay is very similar to Friend.tech, and potential airdrops could be significant.
Clubcast
ClubCast is an application on Farcaster similar to Knowledge Planet, which has launched a token-gated casts feature that requires users to pay to purchase other users' club tokens to unlock and view hidden content on clubcast.xyz or within Frames. Currently, it still requires developer permission to use.
BountyCaster
BountyCaster is a task platform built on the Farcaster protocol, founded by Linda Xie (former co-founder of Scalar Capital, Coinbase product manager).
As shown in the image, users can add the tag @Bountybot when sending content on Warpcast and other clients to publish tasks, which other users can then claim to receive corresponding rewards.
Similarly, users can publish the services they can provide and their prices. Users need to log in with their Farcaster account to view the published Bounties, available services, and even job opportunities on the BountyCaster website.
AlfaFrens
AlfaFrens is a creator economy application built on the Base ecosystem and Farcaster protocol, developed by Superfluid, which supports on-chain asset flows.
Similar to Friend.tech, users can subscribe to KOL channels and access exclusive chat rooms, and further, they can earn tokens produced by the channel.
There are two currencies on the platform, $Degen and $ALFA. $Degen is an ERC20 token on the Base chain, while $ALFA is the proprietary token of the AlfaFrens platform, currently only obtainable within the platform and non-transferable.
$Degen is the platform's consumption token. When starting to use AlfaFrens, users need to prepare some $Degen to deposit into the wallet generated by the platform.
Users can use $Degen to subscribe to KOL channels, with three levels of 500, 1000, and 1500 $Degen/month.
The subscription fee is consumed linearly, and users can cancel their subscriptions at any time. 70% of the subscription fees are distributed to those who stake $ALFA to the channel based on their staking ratio.
Every day, the platform produces $ALFA tokens, and each channel distributes the allocated $ALFA equally among subscribed users based on the amount of $Degen earned from subscriptions.
Thus, the gameplay allows users to find popular KOL subscription channels, and by staking the obtained $ALFA tokens back to the channel, they can earn more $Degen.
$ALFA is currently not a circulating token and has no pricing; early on, it is about exchanging $Degen for $ALFA, allowing users to formulate different participation strategies based on their yield preferences (whether they want more already valued $Degen or more unpriced $ALFA).
Conclusion
As people become increasingly accustomed to "living" online, social graphs have become an important personal asset, and the demand for data autonomy among users is also growing.
Web3 solutions are naturally suited to address the pain points of current Web2 social platforms, but the decentralized social field has not achieved particularly great success.
Many projects pursue decentralization too much while neglecting the importance of user experience. Dan pointed out in an interview with Bankless that the positioning of Web3 social is not to replace Web2 social but to improve it, allowing users to enjoy more on-chain gameplay while owning data rights, achieving things that cannot be done in Web2.
Farcaster significantly enhances user interaction fluidity by storing value data on-chain and high-frequency data off-chain.
The team has prioritized mobile development from the beginning, fully aware that mobile devices are the primary usage scenario for social software.
As a result, the Warpcast client offers a great user experience, is feature-rich, iterates quickly, and continuously introduces new features like long-form content and interactive functions (actions), providing developers with increasing capabilities to build new applications.
Although Farcaster is far from perfect and still has much room for improvement, it is already an application capable of attracting users and maintaining growth. More excellent products based on Farcaster are sure to emerge in the future. Let us look forward to and pay attention to the development of Farcaster and participate as early as possible.
