In the last couple of years, there have been hundreds of essays written and videos filmed that air the frustration of algorithmic oversaturation in our digital lives. I do not wish to link to them here or rehash them as they are too numerous and as they have most likely reached you, via one screen or another. The core dismay that internet citizens have collectively expressed is about two key frustrations:

1. The False Promise of Algorithmic Distribution (or Creator Economy)

2. Algorithmic Consumption is Designed to get us (literally) Addicted

In this essay, I want to give some context and color to the first frustration but focus more on the second frustration - which causes regret and time-loss for a vast majority of social media users.

In the previous decade, Countless VC-funded companies have used and abused the term “Creator Economy” to mean countless number of things. The one constant promise of every “creator economy” platform — big or small — has been the promise of digital entrepreneurship on the centralized frictionless platforms where you can come create digital media in the hopes of one day going “viral” and reap the benefits of a massive social reach.

The promise that has been repeated a million times is that if you are a diligent “creator" on their platform and play the algorithmic slot-machine every day with your time and unpaid digital labor — when your time comes, the algorithm gods will smile on you and circulate your content (and everything that comes with it — the personal brand, the sponsorship deals, the connections etc) to the wide reaches of the massive network of millions of daily active users they have amassed by spending venture capital and accumulating the benefits of winner-take-all network effects.

This is what Chris Dixon (partner at a16z, a well known venture capital firm) noted in his 2018 essay Why Decentralization matters :

"Let’s look at the problems with centralized platforms. Centralized platforms follow a predictable life cycle. When they start out, they do everything they can to recruit users and 3rd-party complements like developers, businesses, and media organizations. They do this to make their services more valuable, as platforms (by definition) are systems with multi-sided network effects. As platforms move up the adoption S-curve, their power over users and 3rd parties steadily grows.

When they hit the top of the S-curve, their relationships with network participants change from positive-sum to zero-sum. The easiest way to continue growing lies in extracting data from users and competing with complements over audiences and profits. Historical examples of this are Microsoft vs. Netscape, Google vs. Yelp, Facebook vs. Zynga, and Twitter vs. its 3rd-party clients. Operating systems like iOS and Android have behaved better, although still take a healthy 30% tax, reject apps for seemingly arbitrary reasons, and subsume the functionality of 3rd-party apps at will."

Cryptonetworks, like Farcaster, Bluesky & Lens have championed themselves as social-networks where creators can migrate to and monetize their audience directly by cutting out the centralized networks (like Meta or Google or Twitter) being the intermediaries with high take-rates and arbitrary approval control. The promise of onchain creator economy is that here the creators can make more money directly from their fans and are in control of their own content choices.

In this essay I will not be addressing the inherent faults of a creator economy business model in much detail — which runs on power law (rich and famous get richer and more famous).

The only thing I will point out is this: the root of this power law economics comes from the network structure of follower-following social graphs itself. The follower-following social graphs are scale-free networks — attention, information & money flow to biggest hubs and winner-takes-all.

In contrast, offline social networks (social clubs, university networks, silicon valley VC-founder networks, Hollywood collaborator network etc) have a different more-balanced network structure in which the attention, information and money flow in a more distributed manner to multiple smaller hubs.

In the last few years, we all have been trying to rebuild our organic social networks online to look more like those offline and escape the algorithms - via the most potent of social coordination tools - the groupchats. Anyway, I might write about the production & distribution side of "creator economy" and social networks in another essay. In this essay, I want to write about the algorithmic consumption side -- where things have not changed much between the incumbent social-network giants and the emerging disruptors of open-social like Farcaster & Substack.

Our behavioral and interests data is scooped up from every online nook and cranny by social media platforms, and then processed and put to work against us — to keep us hooked on the infinite scroll. The data processing and the data science (using our own data) leverage our behavioral impulses to hook and hold us to achieve the monetizable goal of social media businesses — maximize the time we spend on their websites and apps.

Almost everyone of us have had a moment of realization where we have found ourselves scrolling mindlessly without a purpose. Many friends of mine have confessed that whenever they open Instagram or Twitter or YouTube they keep getting sucked into the infinite maze of audio-visual distraction.

This is literal addiction and it's by design.

For context, I am borrowing quotes from this revelatory paper on Digital Gambling: The Coincidence of Desire and Design by Prof. Natasha Dow Schull (leading researcher on gambling via slot-machines and digital gambling apps). During her research, she interviews many casino gamblers and records their psycho-physiological behavior patterns. She notes a common theme in most gambler's description of their experience when hooked to the slot-machines. It is referred to as "being in the machine zone" or "the rythym of play" that makes them want to keep playing continuously. This leads to gambler losing their register on money, time and their own body. Read on how:

"Speed, to a greater degree than aloneness and noninterruption, is a condition of the zone over which gamblers feel a sense of control. Digitized features like the dynamic play rate promote a sense of “autonomy” whereby “players can interact with and control some game aspects”. The ability to modulate play—adjust volume, speed of play, choose cards and bet amounts—is understood by game developers to increase psychological and financial investment. Bonus games that pop up when players reach certain credit levels often present themselves as skill based (for example, a bowling ball whose trajectory appears to be controlled by a joystick) when in fact they are entirely programmed, promoting what game developers call an “illusion of control.”"

"New games further cultivate this sense of autonomy through the digitally facilitated choices that distinguish them from traditional slots:

“Slots are on a whole other pecking order—cherries, bars, etcetera. You don’t have to think. With video poker you get to choose the cards, you have input,” said Patsy.

Julie: “I didn’t like the old slot machines—there’s no challenge, no decisions to make, and you can’t pick how many credits to bet.”

Maria: “With the old machines, you rely on whatever comes up; with games like video poker, you can make choices—that may have been the thing that hooked me.” At the same time that speed of play suspends gamblers in sort of holding pattern, a constant stream of choice “holds” attention and assists social withdrawal.

Shelly: “The machines don’t require the kind of attention that live games do, where you have to be sharp, aware, take other people into account. You can play the machines when you’re totally numb and exhausted because they require just enough of your attention that you can’t really think about anything else.” In the zone, attention is thoroughly absorbed by a steady repetition of choosing operations; choice and speed play off one another in the sense that decisions are made to the beat of a tempo set between person and machine. Gamblers describe themselves as playing the machine like a musical instrument. When player and instrument are “in sync,” they attain a sort of perfection—“hitting the harmonic,” as Randall says, or being “in tune”: “If the play is not in tune, then I start to get anxious because it means I will not be able to sit and play for a while, get into the zone, stay there.” Game features that promote continuous productivity collude with the gambler’s wish to enter a zone that effectively suspends the social, bodily, temporal, and monetary parameters of existence."

"Julie describes how machines facilitate exit from the register of money: “You have no concept of value anymore. If you put in a twenty dollar bill, it’s no longer a twenty dollar bill—it has no value in that sense. It’s like a token, it excludes money value completely.” In the economy of the zone, money loses its charge as a material means of acquisition and exchange and is converted into the currency of play, a supraeconomic means of suspension from conventional circuits of exchange: “You’re not playing for money; you’re playing for credit. Credit so you can sit there longer, which is the goal. It’s not about winning; it’s about continuing to play. Bill acceptors free players from conscious awareness of money and allow them to enter into a space of credit in which money, as such, disappears"

In the recent years, the legalization of sports-betting industry in the United States and the cultural normalization of digital gambling in the global internet culture has made things worse. It has exposed a much larger percentage of terminally-online people to the same addictive designs inside the apps they spend hours browsing -- usually in isolation.

The user-experience designers of online games and social-media apps (not just the gambling apps) learnt the secrets of gmabling industry on maximizing time-spent on device. They applied some of the same design mechanics that slot-machine designers used in their video interface and the math that "runs the game" (the rewards calculation and schedule of reinforcement) to keep the players/users hooked for hours - playing in isolation and spending away their time, money and attention.

Reading the descriptions of psychological hooks that slot machines and the math inside them has on the gamblers, it sounded very similar to the hook and hold that TikTok's algorithm has on terminally-online scrollers - like the iPad kids you must have spotted, scrolling mindlessly on the endless stream of short form brainrot videos. Or the socially awkward incel swiping right and left, furiously on Tinder. These algorithmic "social content" apps offer infinite choices to the "player" -- the choices with "illusion of control" -- all binary mindless choices lead to more Time on Device(the monetization goal that casino designers usually optimize for) or Time on App (the monetization goal that social media app designers usually optimize for).

Here is the 2022 research paper on algorithmized self that qualitatively differentiates the consumption behavior of a user of algorithmized content apps like TikTok (and more recently Twitter too), compared to that of personal social networking apps like original Facebook & Snapchat.

"While on other social media platforms with home feeds the presentation of content often depends on users following the creators of this content, TikTok dispenses with this requirement: content is divorced from the context in which it is created. Thus, while new users of Instagram, for example, are given a moment to organize their accounts and follow the creators that they are interested in to begin curating their feed, new TikTok users are immediately presented with content: the “default state” of the platform is one of the stimulations without reflection or planning. Users need not concern themselves with anything other than consumption of content curated specifically for them, but that they themselves do not have to curate.

As mentioned, the hyper-prominence of content resulted in social interactions falling to the wayside. One participant stated that they did not use TikTok to connect with their network; the purpose of the app was purely to gain entertainment from funny videos. Other participants expressed that they would rarely follow other users or use the commenting function (except when they wanted to “work with” the algorithm to help it curate more relevant content for them). In fact, a number of participants suggested that they did not care about creators at all, and preferred to experience content on its own, estranged from its source"

Onchain Money + Broadcast Algorithms + Addictive Design Tactics → SLOT MACHINES IN YOUR FEED

Promising disruptors in the social web sector like Farcaster and Substack have made real progress in the post-pandemic years to take us towards an open social with more data-ownership given to the users, and more agency over what we produce and how we leverage and monetize our social-connections.

As I hinted at above, despite the progress, the lure of algorithmic consumption has overtaken these disruptors too.

1. Farcaster is now relentlessly pushing "towards more interesting content" on Home Feed and algorithmic optimization to serve you content based on "interest-graph" instead of your social-graph and also an endless stream of short form videos -- as "growing the number of daily active users(DAU) matters more than anything else" -- according to cofounder and CEO Dan Romero.

2. Substack introduced Notes last year - to compete with Twitter/X to allow you to share micro-quips or quotes from longer form writings. Over time, the Notes feed have become more and more algorithmically optimized for recommendations of trendy topics -- taking you away from people you intentionally follow the work of. They also introduced short form videos, and possible Ads.

TikTokification of the whole social web from Instagram to Twitter, Farcaster to Substack is marching ahead. For context, this tiktokification push from Farcaster team comes after two years of stagnation on the DAU number and high churn-rate (about 90% of people who signed up have churned and are not active anymore, according to this popular Dune dashboard tracking Farcaster usage metrics).

Farcaster raised $150M of venture capital in 2024 to become the leading player in the decentralized social race that has been heating up since the turn of the decade. Substack also raised $100M in venture capital recently and are facing the usual growth pressures from their investors as Farcaster is - time-spent and DAUs need to go up and go up exponentially so that the audience can be targeted and monetized soon. This is the only formula that venture capitalists know to get good returns on the the investment they make in social apps. They need massive scale for it to be called success and to them, Tiktokification seems like the obvious answer to grow time-spent metric, the playbook that every other social media giant is copying unimaginatively.

Zora (a well-known web3 protocol that allows users to list their NFTs for sale or display) has introduced the feature of "creator coins" and "post coins". Base App (a new social app launched by CoinBase, utilised the open social graph of Farcaster) followed it to allow anyone to collect any cast. Besides algorithmic optimization of content, the second push in crypto social is for tokenizing everything. Farcaster has introduced Collectibles - which means you can bid on any post to enter into a 24-hr auction and if you win, you can collect an onchain snapshot of that post in your account's wallet. You can now launch a token by just making a post about it and mentioning the handle of a token creation bot. Meme-tokens are created on a whim and trade with extreme volatility, sometimes for millions but only for hours before heading to zero. Manipulation via all means is rife -- wash-trading or insider collusion on tokens for mini-apps. Cheryl Douglass of Seed Club writes this week --

"turns out the distance between salem 1692 and crypto in 2025 is exactly zero psychological kilometers. both involve communities of true believers who've convinced themselves they possess secret knowledge, both feature elaborate conspiracy theories about shadowy cabals manipulating markets, and both are the same cultural modality, just with different user interfaces.

the parallels are so precise it's almost mesmerizing. medieval witch trials gave us scapegoating, moral panic, and mass hysteria over invisible forces controlling the economy. crypto gives us... scapegoating, moral panic, and mass hysteria over invisible forces controlling the economy. the main difference is that witches were accused of consorting with demons for supernatural power, while crypto influencers consort with low float high fdv pump and dumps for the same result. at least the demons were honest about their intentions."

Crypto-networks offered so much promise when they were started few years ago, initially in the form of DAOs but then taken over by NFT and memecoin hysteria. They still offer us the potential of permissionless infrastructure for socio-economic coordination among groups, large and small. So, after atleast five years of experiments by talented product teams and hundreds of millions of venture capital being deployed, why have we not seen a crypto social network reach the threshold of a million daily active users? where is the root of the problem? It seems the web3 economy in the first half of 2020s has been the Locust Economy.

After working as a product designer in the trenches of consumer crypto industry for over 2 years, I wrote an essay “Web3 : Why So Leaky?” in april 2023 to highlight the incredible unloyal userbase that spanned the whole web3 economy. The ZIRP era crypto companies in 2021 flexed rainbow-gradient logos & websites - loudly and proudly claiming to give users more control of their social data and tweeted WAGMI (we are all gonna make it) every day. You can read that essay if you want to dig deeper in the persisting problem of high churn and very low retention in consumer crypto products. Here is a quote:

"In the community-space (read: discord server with a dozen memes & trading channels), they were building community before product. Instead of early adopters and paying users, there was a swarm of micro-investors, token-traders and airdrop farmers, going from one “community” to another posing as early adopters. I was scouring through many of these “communities” trying to find products with real-world use-cases and those elusive “paying users“. But they were nowhere to be found. But the bubble kept on going in 2021. The memes kept on going. “WE ARE ALL GONNA MAKE IT” or WAGMI, said everyone in the web3 bubble of 2021. Only in mid-2022, zero-interest-rate money taps got closed off and VCs started questioning the head-in-the-sky web3 fundraising pitches. NFT prices and trading-volumes fell over 90 percent and hundreds of web3 tokens went to almost-zero."

Now, two years after writing that essay - it has become clearly evident to me that despite all the scams in or the locust-like swarm of unloyal userbase in web3, the biggest problem is the lack of differentiated value proposition. It is now a trope to say and is well understood that crypto-social is a solution in need of a problem. I think crypto-social has many interesting and useful new use-cases but algorithmic content consumption is not one of them. Following the TikTok playbook is a lose-lose move for a crypto-social network like Farcaster. It will alienate the early-adopter power users (who number only in tens of thousands but are passionate enough to stick around being the guinea pig of a new social network that often disappoints in its quality of user-experience). And also it will not be able to compete the network effects of algorithmic content factories that big social media giants have created - TIkTok yes but also Twitter, YouTube & Instagram. But most importantly, it is a losing playbook because the cultural signal is moving away from algorithms and new social network needs to be cool enough culturally to attract a mass of young users. Sam Kriss wrote in his 2023 essay "All the nerds are dead".

"But not everyone has the good fortune to be a machine: most people are not nerds. Most people will passively accept culture produced under the regime of alibidinal information-sorting algorithms, if it’s the only thing available—but only up to a point. After that point, they will simply check out, which is exactly what they’re now doing. It’s not just Marvel: nerd culture is collapsing everywhere. Sequels and franchises no longer drag as many people into the cinemas. The ecstatic boyband fans have gone quiet: increasingly, new music in general is being oucompeted by Spotify’s century-long back catalogue. Over the last year, sales of books in print went up by 4.2%—except for young adult novels, which have declined. As I’ve argued previously, algorithms in general are starting to collapse. The nerd world is dying. And since the nerds gravitate towards homogeneity and popularity, their extinction will be total. Soon, very soon, every single one of them will be dead. "

The thousand true fans thesis builds on the original ideals of the internet: users and creators globally connected, unconstrained by intermediaries, sharing ideas and economic upside. Incumbent social media platforms sidetracked this vision by locking creators into a bundle of distribution and monetization. There are, correspondingly, two ways to challenge them: take the users, or take the money. Crypto and NFTs give us a new way to take the money. Let’s make it happen.

- Chris Dixon in 2021 essay “NFTs and A Thousand True Fans"

Despite the algorithmic onslaught, there is a lot of hope. Even in the Farcaster ecosystem itself. The protocol is mature enough to support multiple client apps. The Base App (launched by CoinBase) offers potential of much larger distribution and a different take on the interface. The mini-app framework is attracting talented builders to build composable user-experiences on the Farcaster social graph - due to open data easily accessed via Neynar APIs and catalyzed by developer incentives. The power users - even if ~25,000 only -- are sticking around.

A small yet growing coterie are making distinct pro-social consumer experiences for new forms of social coordination. Some of the examples on top of my mind are:

• Sahil Dewan and the Cura (mini-app) team are building towards a different version of open-social - taking us further in the direction that Substack strived for with direct audience ownership & monetization. More like the early Facebook when it was closely mirroring small-world network of university-students-connections. More like offline social clubs.

• Andre Worix is building a high-signal inbox in a mini-app called REPLY to enable more valuable 1:1 outreach between people in the onchain social-networks.

• Noice(mini-app) team of Srijan, Div, and Tike -- is experimenting with peer-to-peer tipping to embed the flow of money through our everyday social interactions with our friends and acquaintances.

• Crowdfund, built by Nicholas (Seed Club) is a mini-app for easily creating a crowdfund for funding your side-project or for charity donations.

Leaving the Algorithms behing does not mean being a lone explorer in the vast overwhelming ocean of information that the world wide web is. We can and should leverage our real social-connections to gather and cluster - in groupchats, in offline events and as we bump across each other on different chat servers, comment sections of newsletters & also on the public feed reply threads.

This way we rebuild a resilient small-world network where the power law is defeated and where you - as part of your tight-knit-group can feel heard and make meaningful contribution to taking back the control of your digital world - so that attention, information and money flows within your small group or the small groups you intentionally connect with.

Toby Shorin (an internet acquaintance of mine) -- who is a brilliant writer & researcher of internet culture, wrote a brilliant piece in 2020 on SQUAD WEALTH, which became a canon reading for most culture-oriented DAOs. In the 2018-2019 era, there was a Twitter-scene of indie researchers/writers and in a group DM, Toby and me shared our mutual interest in the communities-of-practice. In 2019 recently out of college, I had written about the emergence of clusters of free-agents (independent economic actors) that were co-creating in private spaces (online and offline) and often interlinking(collaborations) with other clusters to leverage the economy-of-scope in contrast to the economy-of-scale that vertical hierarchies in the corporate usually leverage.

Toby's essay co-written with Sam Hart and Laura Lotti focused on squads as the social structures being birthed out of group DMs and even in physical huddles during the times of great uncertainty of the pandemic years. The importance of finding your own people locally became ultra evident when the traditional social systems became unreliable or inaccessible. After the lockdown era, those similar small-scale structures of social gatherings started to become more commonplace to make sense and meaning digitally in the face of nonstop algorithmic onslaught. Toby describes the state for social & financial tools to enable this basic unit of human coordination - the small group or the squad.

"Some digital tools are public interfaces, while others are used to coordinate internally. Today this SQUAD INFRASTRUCTURE is comprised of simple software primitives: Venmo, Splitwise, Cash App. These apps are financial plumbing that facilitate internal coordination between squad members by minimizing the awkwardness of asking your friends for money. Despite the strong demand for SQUAD RESILIENCY, the social stigma of group finances is still a major barrier to economic exchange among friends.

In-app mechanics like budget trackers, polls, and coin-flips offer a half-way point between social agreements and technical solutions. For instance Splitwise relies heavily on the social norms to ensure expenses are entered accurately. By allowing individuals to opt-in to a set of rules for retroactive settlement the group's social friction and coordination costs are reduced. Civilization advances by extending the number of important functions squads can perform without thinking.

Some believe new software can liberate "individual creators." But this kind of thinking inevitably leads to Uberized platform-mediated wage labor. We want to liberate squads. The group is the basic user class for the tools we need today as a society, yet few pieces of software allow the squad as a whole to produce cooperatively and generate wealth together. To fully realize SQUAD CULTURE this must change."

The way forward for most social media users -- web2 or web3 -- is to ditch the algorithm, or own your algorithm - to build Squad Culture. The crypto-social builders can help us move further towards this future - only if they take a pause from building the crypto casino that hooks isolated individual users to algorithmically gambling their time, attention and money.

Fin.