Decentralized Social Network Farcaster Hits $600,000 in Revenue, Attracts Crypto Enthusiasts
Farcaster achieved $600,000 in total revenue, indicating an interest among crypto users and their willingness to subscribe to paid services.
Decentralized social network Farcaster achieved a total revenue milestone of $600,000, indicating not only a keen interest among cryptocurrency users in utilizing the platform but also their willingness to subscribe to its paid services.
Farcaster experienced its initial surge of attention in early December 2023, marked by a modest increase in users opting for platform storage. Subsequently, a second wave commenced in late January this year, reaching its apparent peak in early February. The recent surge, considerably larger in scale, witnessed a substantial uptick in user signups, daily user engagement and daily post activity.
The driving force behind the surge in user attention was primarily attributed to the recent introduction of the in-app engagement tool Frames.
A prevalent use of Frames involves users offering an NFT to another Farcaster user, with the condition that they follow the original poster’s account and repost their Frame. The tool boosted the Farcaster’s demand by introducing native monetization.
The appeal of obtaining free NFTs and the potential for airdrops attracted a considerable segment of the community to shift from platforms including X and Discord to Farcaster. This transition resulted in a surge in user migration, even though notable figures like Ethereum (ETH) co-founder Vitalik Buterin had already adopted Farcaster well before this widespread move.
Farcaster operates on a subscription model–users are subject to an ongoing storage fee to cover the hosting of data generated through daily use. The primary reasons for charging users are to prevent spam and to achieve sufficient decentralization, as the platform operates on its own systems without relying on a company to cover data storage expenses through advertising.
The annual storage fee stands at $5, encompassing 5,000 posts, 2,500 reactions, and 2,500 follows. A portion of these fees contributes to the platform, while some are allocated for covering transaction fees and processing credit card information.
However, despite users aiming to minimize fees, transactions, such as those involving Frames, still incur blockchain transaction fees. The fees apply to various blockchains, including the Ethereum mainnet until recently.
Thus, in recent weeks, a majority of Farcaster users have shifted to the Coinbase-built Base network for on-chain transactions, reaching a peak of 83% of transactions, as per data from Dune Analytics. This shift could be explained by the network’s low fees and the influence of Farcaster co-founder Dan Romero, a former Coinbase vice president, and current Coinbase protocol lead Jesse Pollak, who is among the platform’s most popular users.
Farcaster’s Quest for Longevity
Last year marked a significant advancement for an emerging wave of decentralized social media applications, with some opening access and others gaining considerable traction. One other notable introduction was the FriendTech social finance platform that created a space where users could purchase keys for access to closed group chats hosted by influencers, where each transaction incurred a 10% fee, divided between the platform’s creator and the respective influencer.
Since its launch in August, the platform has garnered repeated waves of attention, with 843,000 users conducting a total of $267 million in ETH across 12 million transactions, as per a Dune dashboard. Fees experienced significant spikes before gradually diminishing as the attention waned, ultimately leading to FriendTech’s failure to achieve sustainability.
Farcaster’s initial success shares some similarities with FriendTech. Yet, in contrast, Farcaster has become the present favoured social platform within the community. The lingering question revolves around its capacity to maintain long-term viability.
Farcaster’s promising peak in revenue and user engagement signifies the platform’s vast potential and popularity, simultaneously raising questions about its capability for sustained success in the landscape of decentralized social media platforms.
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