Wake Up, Touch Grass

007

Social media is at a crossroads. Over the last two decades, the category has reshaped how we connect, communicate and consume information. What began as an experiment in digital socialization has become a central pillar of modern life. But as platforms like Facebook, instagram and TikTok have grown into trillion-dollar empires, cracks in the system have become impossible to ignore. Centralized control, algorithmic addiction and the commodification of users have led to increasing frustrations - and opportunities. The question is - can web3 social offer a better path forward, or is it just an overhyped experiment?

To understand where the category could go, we first need to look at where it’s been. The first digital, social spaces were simple - Usenet forums, AOL chatrooms and forums. These platforms were decentralized in spirit, built around shared interests rather than engagement-maximizing algorithms. But the real explosion of social media came in the early 2000s with Friendster (2002), MySpace (2003), and Facebook (2004). These platforms introduced profile-based networking and newsfeeds, laying the groundwork for the social web we know and use today.

As the category scaled, so did the business model. Early platforms focused on growth, and were hesitant to pursue monetization, but that didn’t last long. Remember the dinner scene from The Social Network where Zuck and Eduardo discuss Facebook’s growth with Sean Parker?

Eduardo - Settle an argument for us. I say its time for Facebook to start making money but Mark doesn’t want advertising. Who’s right?
Sean - Neither of you, yet. Facebook is cool, that’s what it has going for it. You don’t want to ruin it with ads because ads aren’t cool. It’s like you are throwing the greatest party on campus and it has to be over by eleven.

Well, the party now ends at eleven - Facebook gets its oxygen from ads. Advertising has become the dominant revenue stream, and platforms profiting off user attention and data. Facebook, Twitter (now X) and Instagram perfected the model - free to use services in exchange for massive data collection, which was then sold to advertisers. This led to an internet where users were no longer customers, but the actual product.

The consequences of this model became clear over time. Social media algos prioritized engagement and clickbait above all else, favoring outrage, misinformation and divisive content. Platforms increased control over speech and content, leading to debates about censorship and “shadow banning.” Meanwhile, creators who built massive followings on these networks found themselves at the mercy of shifting algos and revenue payout policies, unable to truly own their audiences.

As much as web2 social media platforms are in the advertising business, they are even more so in the dopamine business. I like this graphic from Ted Gioia’s Honest Broker -

Their true product isn’t content—it’s addiction, engineered through infinite scrolls, short-form videos, and algorithmic manipulation designed to keep users engaged for as long as possible. Engaged = doomscrolling. Funny enough, Merriam Webster actually recognized “doomscrolling” as an official word and added it to the dictionary in 2023. Every swipe, reel, and refresh is a micro-hit of dopamine, reinforcing compulsive behavior while turning attention into a raw material for profit. The result is a digital landscape that prioritizes fleeting engagement over meaningful creation, optimizing for endless distraction rather than depth or discovery.

Web3 social promises a different approach. Instead of platforms owning user data and content, blockchain-based networks allow users to retain control. Decentralization means that no single company, or team, dictates who gets access or visibility. Users can own their content, followers, and even governance rights over the platforms they use. The idea is simple - social media should be something you participate in, not something that extracts value from you.

Early web3 social experiments are already in motion, and have seen varying levels of traction. Lens Protocol, built on Polygon, enables a decentralized social graph where users can own their interactions and can move seamlessly between platforms. Farcaster is exploring a hybrid approach, where users control their identity while benefitting from a partially centralized user experience. Zora, essentially the “decentralized Instagram,” focuses on onchain media and creator-owned marketplaces. Nostr and Bluesky (Twitter spinout), aim to create open-source, protocol-based networks that aren’t owned by any single company.

Despite the promise, and traction, web3 social faces challenges. The biggest of which is adoption - people are deeply entrenched in web2 platforms, and switching costs are high. Network effects make social platforms valuable, and new entrants struggle to reach critical mass. Additionally, without ad-driven (extraction) business models, new platforms must find sustainable ways to reward creators and incentivize participation.

There’s also the issue of usability. Crypto-native products suffer from poor onboarding experiences - complex wallet setups, lack of fiat onramps, high gas fees, etc. The average user doesn’t want to deal with private keys to post a status update. For web3 social to compete, it must offer an experience that feels as seamless as setting up and using TikTok or Instagram, without the hidden trade-offs.

Even if these obstacles are overcome, web3 social must prove it can be more than just a financialized version of web2. Too often, crypto projects focus on speculation rather than utility. If every action within one of these social networks revolves around token incentives, it risks becoming a pay-to-play ecosystem rather than a genuinely better alternative. The key is finding the right balance - giving users ownership while maintaining organic social interactions.

Onchain social needs to touch grass, step outside of the crypto bubble and reconnect with real-world user behavior. Many builders grasp the technical advantages of decentralized social networks but overlook why people fell in love with social media in the first place - entertainment, connection and creative expression. Instead of hyper-financialization and clunky user experiences, onchain social platforms should focus on making digital interactions seamless, engaging and rewarding. Mainstream adoption of web3 social platforms is a function of two things:

1) Platforms need to prioritize real-world utility. Ownership and decentralization are compelling, but they won’t drive mass adoption unless they provide tangible benefits over Web2.

2) Onboarding needs to be frictionless - users shouldn’t need to understand blockchain technology in order to participate. Blockchain solutions must enhance, rather than complicate, the UX.

UI/UX designers, marketers, and storytellers will play a big role in making the technology relatable. Without this grounding in reality, onchain social risks becoming another over-engineered product that fails to resonate beyond its niche and find product-market fit among non-crypto natives.

Social media is broken - legacy media’s decline has left independent creators more reliant than ever on centralized platforms that dictate their reach and revenue. Onchain social can offer an alternative by giving creators ownership over their work, ensuring they control how, when, and where their content is used. With over half of consumers willing to follow their favorite creators to new platforms, the opportunity is clear, but fixing it won’t be easy. The concept offers an intriguing vision of a more open, user-owned social internet, but it remains largely experimental at this stage.

I’m optimistic that we are heading in the right direction in terms of a better online social experience. The market share of decentralized social media platforms remains modest compared to predecessors, but they are quickly gaining traction. Perhaps more importantly, people are waking up to the borderline illegal behaviors and tendencies of centralized social media platforms - value extraction, demonetization, shadow banning, sudden algorithmic changes, and revenue pools favoring large creators. On top of that, there is more awareness around the mental, physical, and psychological side effects of the dopamine business model which companies like Meta and TikTok are built on. The headlines are positive, too. A few weeks ago, 776’s Alexis Ohanian joined an existing bid for TikTok’s US business, and claimed that he would like to bring it onchain. While there’s a large list of suitors for the business and I don’t think this is a likely outcome, imagine how consequential moving TikTok’s 170 million monthly active users onchain would be for web3 social. Public sentiment is increasingly in favor of decentralization.

In summary, if onchain social can overcome its early hurdles, it could redefine how we connect online, If not, it risks becoming another niche crypto movement that never truly scales. See you next Friday.