How Web3 social networks work
What are Web3 social networks?
Web3 social networks are a new generation of platforms built on blockchain and grounded in decentralisation and open-source principles.
They are an alternative to traditional Web2 platforms such as X, YouTube and Facebook. Building such venues involves attributes like DAO, DeFi, sovereign identity, soulbound tokens and decentralised data storage.
What problems do they address?
Using Web3 social networks goes beyond familiar internet platforms, offering a new level of responsibility for personal data and shaping a different user experience. The main advantages over Web2 alternatives:
Monetisation. A defining feature of decentralised social networks is the creation of new ways to monetise content and data. These models are enabled by integrations with DeFi, DAOs, and the tokenisation of personal data and content. For example, Friend.Tech let users monetise the influence and popularity of X accounts.
Censorship resistance. With no single governing authority, decentralised networks provide access to potential users in all jurisdictions without restrictions.
Interoperability. Many Web3 social networks are designed to be compatible with other dapps. A profile or content created in one application can be used or monetised in another—unlike Web2 networks, where the same data is often not portable across platforms.
Ownership and control of personal information. Users of Web3-based social networks are given full or enhanced responsibility for securing, and controlling access to, their personal data and content. They decide what to show and to whom.
Which Web3 social networks are on the market?
Teams have emerged that are building Web3 social networks and attracting venture funding and user interest. A few popular projects:
- Bluesky — a decentralised alternative to X. Backed by former X CEO Jack Dorsey, it raised $8m in July 2023 in a round led by Neo. One early feature was a personal domain as a username, offered in partnership with registrar Namecheap;
- Lens Protocol — a composable, decentralised social graph that uses smart contracts on the Polygon blockchain. The protocol is developed by DeFi firm Aave. In June 2023 the project closed a $15m funding round led by IDEO CoLab Venture. Each account created on Lens is a non-fungible token that contains the history of all posts, comments and other content;
- Damus — another X alternative built using Bitcoin’s L2 Lightning Network and the Nostr protocol. It enables end-to-end private messaging without servers via relays;
- Farcaster — an X-like decentralised network whose protocol runs on OP Mainnet. It won a positive review from Vitalik Buterin, the founder of Ethereum, the second-largest cryptocurrency by market capitalisation;
- Friend.Tech — a decentralised social app on Coinbase’s L2 Base, integrated with X. The project drew interest from senior Coinbase software engineer Yuga Kohler, crypto influencers Cobie and Hsaka, and venture firm Paradigm.
Will Web2 social networks move to Web3?
Web3 is a young concept for the evolution of the internet and, by extension, social networks. Even so, some traditional Web2 platforms have begun adopting decentralised solutions.
The Reddit forum announced collectible NFT avatars on Polygon in July 2022. By June 2023 their number exceeded 13.7m.
Telegram founder Pavel Durov confirmed plans to integrate a TON wallet. According to him, starting in November 2023 it would be included in the settings menu for users in all countries except the US and some others. The Fragment blockchain platform allows users to buy and sell profile and channel identifiers, anonymous numbers and Telegram Premium subscriptions.
X is also laying the groundwork for future Web3 integration. In August 2023 the company obtained an RI Currency Transmission licence. It will allow the provision of custody, transfer and exchange services for cryptocurrencies and other digital assets.
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