The Promise of Decentralized Social Network ⛓
Welcome to Issue 116:
▹ Week's Top Signal
▹ Holyn on Twitter & Future of Social Media
▹ Dirt on Web3 Worldbuilding
▹ Community Member Fit Score by David Spinks
▹ Snapshot Voting Validation
▹ ... much more
--- Let's get into it!
Crypto and the Creator Economy have been on a collision course since late 2020. A lot has happened since then: NFTs took off thanks to PFP collections and creator adoption. New economic models for artists and communities were (and continue to be) developed. Decentralized social media protocols have been created with new clients launching every week.
Two years ago, the promise of crypto in the Creator Economy was just that -- a promise. And although there is still a long way to go, that promise is slowly being realized.
This week, BlockchainBrett of PTC Crypto wrote a piece on the Crypto Creator Economy. The essay summarizes much of this promise under the umbrella of "web3 social." On one side of the life cycle is "content," where Brett describes how web3 unlocks new modes of co-creation, distribution, curation, and engagement. On the other side of the life cycle is "community," where tokens make it possible for entire economies to be built around collaborative production.
It's become increasingly clear that the narrative that around web3 as distinct and separate from "web2" is harmful to its adoption and development. The "Crypto Creator Economy," while an incomplete narrative in and of itself, is closer to reality. Crypto is the financial and trust layer of the internet, and we must do better at embedding the technology into existing systems and UX where it makes sense.
This is Forefront's thesis: tokenized communities unlock new economic models for creators of all walks of life to collaborate with one another toward the proliferation of a common meme. Crypto doesn't necessarily replace creator platforms, but it disrupts them by creating adjacent economic networks for creators to collaborate and get funded, and for communities to coordinate around a share mission.
The Crypto Creator Economy is already here, it's just not evenly distributed. For crypto to reach the masses, we'll need more people than ever to earn money making cool stuff with their friends -- that's what we're here to unlock.
The Promise of Decentralized Social Network. Twitter is still alive, and regardless of how we feel about Elon's recent actions after taking over the company, it's clear there is some newfound ambition behind product development at the company. For example, Musk tweeted this week that the company will seriously pursue encrypted DMs, and a subsequent leak seems to be pointing in the direction of Signal Protocol for implementation. At the same time, discourse continues around Twitter alternatives and the future of decentralized social. Holyn wrote an awesome piece this week comparing Lens, Farcaster, and AT Protocol, highlighting their compatibility with various identity standards and their maturity relative to the competition. Holyn concludes the piece with her own take: "I'm hoping some smart developer(s) will scale a delightful social app or five with one of these decentralized options. Until then, I'm holding on for dear life on the bird app." It seems that despite the conversation, many others feel the same way.
Dirt: Worldbuilding, Pt. 2. Dirt is currently in the midst of publishing a multi-edition series on Worldbuilding. In Worldbuilding Pt. 1, it's discussed how worldbuilding is employed by entertainment franchises and brands as a means for inexhaustible story expansion. Part two considers worldbuilding as a collaborative, participatory exercise --- within fandoms, virtual role-playing games, and community-driven NFT projects. Worldbuilding is, in effect, brand-building --- an experience constructed for participatory consumption. What form that participation takes has evolved over time. Most NFT projects are still in the very early stages of worldbuilding, despite their espoused franchising ambitions. Some, like the Bored Ape Yacht Club, might have a clear visual identity, but are lacking in a compelling narrative direction, or, to quote the game designer Teddy Dief, "a viable human component." There is a ton to be excited about in the world of web3 Worldbuilding, but more actors introduces more complexity, and a truly immersive and participatory worldbuilding experience is still ahead of us.
Where Are We? Part II: The Cost of Being Right. David Phelps is back with another banger. In this essay, David brings us insights from Railway Mania, and draws parallels to the state of the crypto industry today. First, he argues that revolutionary tech tends to falter early because supply precedes demand. Investors saw the railway would enable whole new industries---but it took years to profit from them. He also argues that everyone justifies ponzis in bulls by saying it's just a temporary way to bootstrap profit -- railway king george hudson openly paid dividends out of returns. Sound familiar? Finally, David points out that investors can be so right about an industry that they kill it. Investors in crypto and railways made the right bets---but put in more money than could ever be returned, which leads to cascading fear and the temporary death of an industry. This is a must-read for anyone wondering what's next for crypto.
The Community-Member-Fit Score (CMFS). David Spinks defines Community-Member-Fit as the point at which members are consistently providing meaningful value to each other without being asked. This piece establishes a Community-Member-Fit-Score, which was inspired by Sean Ellis' approach to measuring Product-Market Fit. Like NPS, the CMF Score consists of asking members just one question: "How would you feel if you could no longer access this community?". Like PMFS, David argues that you should be shooting for 40% of respondents or more to answer "very disappointed." While this is a good proxy, David also recognizes that measuring CMF is more of an art than a science. CMF isn't a fixed point, it's a moving target.
Binance Releases Proof of Reserves System. Binance's industry recovery fund, to which it's already contributed $1 billion, has attracted some big names early on including Jump Crypto, Polygon Ventures and market maker GSR. The fund was announced last week to help mitigate the fallout stemming from FTX's collapse. Binance's initial commitment of 1 billion BUSD can be verified at the following address. The addresses of other participants will be available in the next week. At the same time, Binance is releasing its Proof of Reserves (PoR) System, which is the next step in their effort to provide transparency on user funds. Their future plans include implementing ZK-SNARKs for PoR, improving privacy and robustness, and proving the total net balance (USD) of each user is non-negative. While it remains to be seen the extent to which Binance will uphold their transparency commitments, this is certainly a step in the right direction for the industry.
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What's on Signal
▹ Happening - FF Prism Roundtable
▹ Read - Tomasz on Reddit NFT Launch
▹ Opinion - White Man
▹ Fresh Take - Soulbound tokens <> Mayans
▹ Listen - Jesse Walden on Syndicate Talk
▹ Interesting - Securities <> Concert Tickets
▹ Analysis - The Uniswap Airdrop
▹ Cool - Experiments in Web3 Co-creation
▹ Thread - Tasha on Web3 Adoption
▹ Tooling - Snapshot Voting Validation
▹ Techy - Annotated Ethereum Roadmap
◎ Check out Signal for daily top web3 social headlines
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The information in this newsletter is not intended to constitute legal, financial or investment advice and should not be construed or relied upon as such. Any opinions reflected are the opinion of the author(s) of the newsletter only and not necessarily of Forefront. Please DYOR.