Written by: Sage D. Young, Unchained (formerly employed at CoinDesk)
Translated by: Yangz, Techub News
Co-founder Dan Romero of the decentralized social network Farcaster announced on Wednesday that Farcaster has completed a $150 million Series A funding round at a valuation of $1 billion, with Paradigm leading the round and other investors including a16z Crypto, Haun Ventures, Union Square Ventures, Variant Fund, and Standard Crypto. Since becoming a permissionless social network in October 2023, Farcaster has reached 350,000 paid registered users, with network activity increasing by 50 times. This year, Farcaster will focus on growing daily active users and adding developer primitives such as channels and direct message delivery to the protocol. Dan Romero stated, “In the coming years, we will redouble our efforts to turn Farcaster’s vision into an internet-scale protocol.”
According to data from Dune Analytics created by Pixelhack, on May 20th, Farcaster had nearly 45,000 daily active users, a 30% increase compared to February 11th when the launch of Frames (a feature that turns posts into interactive applications) sparked a surge in activity. However, this data pales in comparison to mainstream social media giants such as Facebook, TikTok, and X (formerly known as Twitter).
As a leader in decentralized social media protocols, how will Farcaster achieve this goal? To answer this question, Unchained interviewed Farcaster’s co-founders Dan Romero and Varun Srinivasan. The two founders shared their views on a range of topics, including their upcoming decentralized plans, their current outlook on the cryptocurrency social network landscape, and their experiences at Coinbase. Here are the key points from the interview:
Question: Can you provide more information about the upcoming decentralized channels on Farcaster?
Dan Romero: We believe it’s essential to allow channel creators to choose whether a community sets up a certain economic model, whether in the form of subscriptions or requiring users to purchase specific assets for access. This flexibility can lead to higher-quality outputs. Being a community mod is no longer a thankless job; creating high-quality content can bring corresponding rewards. That’s the advantage of channels. Similar to subreddits, but creators own the channel and can manage it flexibly, increasing economic benefits in any suitable way.
Question: What is the difference between current channels and upcoming decentralized channels?
Dan Romero: Current channels are centrally managed and stored in the Warpcast database. However, channel content and casts (similar to tweets or Reddit posts) are on the protocol, making them permissionless, but the metadata and curation capabilities of channels are not part of the protocol. They only exist in Warpcast.
Varun Srinivasan: If you create and set up a (decentralized) channel, then all data, everything, including from the channel icon to information sources, can run on multiple different clients. All data is decentralized, and any application developed can display the same version of the channel. Additionally, channel creators can actually control their channels. If a creator wants to hand over ownership to a friend, they can. Or if, after accumulating a fan base, a creator wants to sell it to someone else, they can. Channel creators have the freedom to do so.
Question: How much effort has Farcaster’s decentralized governance required?
Varun Srinivasan: Our decentralized governance model is very effective, known as rough consensus and running code. The IETF uses it to create all network standards like TCP-IP. Its strength lies in its lack of rigid structure. Its logic is straightforward; if you can create something useful and convince the majority it is useful, you can publish it. One person manages the Farcaster Hub (nodes that store data in the network). One person develops applications that interact with the Hub to extract and generate data. Users utilize these applications. These three groups balance each other out. … (Therefore) you must release something that the majority of these three groups consider good. Otherwise, they will show their preferences through action. Hub operators can run old versions. Applications can choose different Hubs. Users can also select different applications. These checks and balances ultimately prevent someone from pushing something detrimental to the network’s broad interests.
Dan Romero: Currently, we are focused on keeping governance simple, increasing the total number of daily active users, and then rolling out truly useful developments. We could spend a lot of time building complex and convoluted governance structures, but that won’t help us achieve our goals.
Question: What was the most important idea learned during the transition from centralized exchange Coinbase to the determination to build a decentralized social network?
Dan Romero: Despite concerns about Twitter’s development after Musk took over, Twitter’s network effect is stickier than I initially thought. When we entered the market in 2021, we found that people in the cryptocurrency space talked a lot about decentralization and the need for other applications in the ecosystem. We naively thought, “Great, people really will want to try new things.” However, reality proved that users prefer to stick with existing products. We really want to provide truly useful products for people. This profound shift in our thinking over the past few years… ultimately, the only way we will succeed is not because of the architecture, but largely because of building products people love.
Varun Srinivasan: At the outset, we realized that we would spend as much time attracting users as developers. We quickly understood that developing applications and social products are really, really difficult. Just developing Warpcast (Farcaster’s client) took about 20 person-years. Expecting other teams to appear on the first day and decide to spend 100% of their time developing Farcaster without users is unrealistic. Only by building a client, telling a story, and attracting users can Farcaster’s value to developers grow, which is the most useful. This isn’t about building an SDK, a toolchain, or adding a feature for me. Can you increase the number of people using this product tenfold? This has been the biggest shift in our mindset since the early days.
Question: What did you learn from your experience at Coinbase, and can it guide Farcaster’s development?
Dan Romero: Based on my experience at Coinbase, I firmly believe that ordinary people don’t care about everything you’re building. They just want a user-friendly application, starting from when the user logs in. In fact, it starts even before that, in how you position the product and explain it to them. We can do better in this regard. The current issues with Farcaster and Warpcast can confuse people. We’re not even competing with fintech apps; we have to compete with the world’s best social media apps. So once a user enters this app, is it engaging enough to make them want to come back? Many cryptocurrency users enjoy comparing cryptocurrency apps, and the reality is, if your app isn’t that engaging, they will go back to TikTok or YouTube.
Varun Srinivasan: Another thing I learned from Brian Armstrong is to always focus on building what people want, regardless of changes in the market. He said things never look as good as they seem, nor as bad as they seem. One reason Coinbase has always been successful is that whether the market is at a low or a high, Coinbase consistently outputs and builds. We have been through multiple cycles in the cryptocurrency space, witnessing the implementation of this strategy firsthand, and we know that long-term focus is the real key to success.
Question: With participants such as Farcaster, Lens, Nostr, and Friend.Tech in the cryptocurrency social media ecosystem, how do you view the current landscape?
Dan Romero: Compared to centralized social media like Facebook with billions of users, the total number of users in cryptocurrency isn’t important. We’re talking about tens of thousands of users across all decentralized social media, who may be the same people using cryptocurrency daily. What interests us is how to gradually increase the user base of 100,000 cryptocurrency applications to 1 billion. I don’t think focusing on competitors is helpful. The key question is: what do people want? What do people find interesting? If you can make the content interesting and fun for users, so they come back every day, then developers will follow. Nothing else matters.
Varun Srinivasan: These competitors are all taking slightly different paths, and our goal is very clear: to operate in the cryptocurrency space, allowing users to build their communities and developers to create applications for these users.
