Bankless - 155 - The Rise of Decentralized Social Networks with Farcaster’s Dan Romero

Episode Date: January 28, 2023

✨ DEBRIEF | Unpacking the episode: https://shows.banklesshq.com/p/debrief-dan-romero  ------ Dan Romero was an early employee at Coinbase and is now the Co-Founder of Farcaster, a new decentralized social network that has captured the attention of many in Web3. Aside from sharing a secret passcode to access Farcaster during the episode (Bankless Premium subscribers only)…Dan also shares his thoughts on why he doesn’t think Web2 social media is broken, why people should care about decentralized social media, how decentralized does it have to be in order to work, and how all of this will fundamentally change the internet and the trajectory of humanity. ------ 📣 Crypto Tax Calculator | Free Crypto Tax Calculator https://bankless.cc/CTCpodcast  ------ 🚀 JOIN BANKLESS PREMIUM: https://newsletter.banklesshq.com/subscribe  ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken  🦄UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap  ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  🚁 EARNIFI | CLAIM YOUR UNCLAIMED AIRDROPS https://bankless.cc/earnifi  ------ Topics Covered 0:00 Intro 6:08 Is Web2 Broken? 10:25 Web3 Improvements 19:25 Unique Web3 Properties 24:42 Developer & User Sovereignty 31:57 Farcaster’s Feature & Protocol Thesis 45:25 Unique Properties of Decentralized Social Platforms 58:29 Growing Farcaster & Client Competition 1:05:39 Incentive Mechanisms 1:11:30 Is a Token Needed? 1:15:55 Protocols 1:19:48 Advertising & Farcaster 1:25:48 Farcaster On-Chain Footprint 1:27:47 Spam Prevention 1:31:31 Discoverability & Regulation 1:33:45 Identity 1:36:00 Closing & Disclaimers ------ Resources: DM Dan Secret Passcode https://twitter.com/dwr  https://danromero.org/  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures 

I've been in crypto for 10 years. I think Ethereum is the right balance between decentralization and pragmatism. And I think building things that people can use are an underrated thing in crypto. I think a lot of people tend to focus in the ideology, which is important. But what I showed up to work at Coinbase and now what I'm doing with forecasters, I want to build a protocol that has a billion plus people using it. But I want to do it in a way that doesn't compromise on the decentralization and the sovereignty at the user account level. Maybe it's a fool's errand, but that's what we're trying to do. Welcome to Bankless, where we explore the frontier of internet money and internet finance.

This is how to get started, how to get better, how to front run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. Do we really need decentralized social media? Our guest today, Dan Romero, says yes, and he explains why. We talk about the rise of decentralized social networks. A few takeaways for you in today's episode. Number one, why Dan thinks social media isn't broken.

He uses a different term, and we discuss what he means by that and why. And number two, we talk about what's new with decentralized social media. Why should people actually care about this? Not the hardcore crypto people who love decentralization, but the normal people, the masses. Number three, we talk about how decentralized a social media network actually has to be in order to work. What should be on chain and what doesn't need to be on chain. Number four, we talk about why a protocol, not a company, is really the way forward.

And finally, we conclude the conversation about how all of this. will fundamentally change the internet and the trajectory of humanity. David, what should listeners pay attention to this episode? Dan Romero is, of course, building Farcaster, but I think he also really just lays out the blueprint for any decentralized social media network, any protocol. And so while this is under the context of Farcaster, I think whatever decentralized social network does emerge out of the Web3 space,

it's largely going to be synonymous with the blueprint, the map that Dan has laid out in this episode. This episode, I think, is actually going to be relatively timeless. Even if Farcaster, for some reason, doesn't see success, some other social media decentralized protocol will eventually, and it will largely follow the same blueprint that Dan lays out in this episode. So I think that's really the thing to pay attention to is, as you are listening to this, understand what primitives will be true, no matter what flavor of social media protocol comes out of this space. Because I think if you're bullish on this base, you are certainly bullish that eventually one will come out, but maybe it's Farcaster, maybe it's a few others, maybe

Maybe it's others we haven't heard about. But they're largely going to follow some of the same primitives and same first principles that were communicated on this episode. In the debrief, David and I are going to discuss what we think about our experience with current decentralized social networks as well. So stay tuned. If you're a premium member, you can click right into that debrief. And guys, we've got so many podcast recordings. We're issuing this one on a Thursday instead of our regular Monday episode. So we hope you enjoy too many podcasts.

Too many podcasts. Too much content. of course, you come to expect that from Bankless. Before we get to the episode, we want to thank the sponsors that made this possible, including our friends at Cracken, which is Bankless's number one recommended crypto exchange. Cracken has been a leader in the crypto industry for the last 12 years. Dedicated to accelerating the global adoption of crypto, Cracken puts an emphasis on security, transparency, and client support, which is why over 9 million clients have come to love Cracken's products. Whether you're a beginner or a pro, the Cracken U.S. is simple, intuitive. and frictionless, making the Cracken app a great place for all to get involved and learn about crypto. For those with experience, the redesigned Cracken Pro app and web experience is completely customizable to your trading needs, integrating key trading features into one seamless interface. Cracken has a 24-7-365 client support team that is globally recognized. Cracken support is

available wherever, whenever you need them by phone, chat, or email. And for all of you NFTers out there, the brand new Cracken NFT beta platform gives you the best NFT, trading experience possible. Rarity rankings, no gas fees, and the ability to buy an NFT straight with cash. Does your crypto exchange prioritize its customers the way that Cracken does? And if not, sign up with Cracken at Cracken.com slash bankless. Hey, Bankless Nation. If you're listening to this, it's because you're on the free bankless RSS feed. Did you know that there's an ad-free version of Bankless that comes with the Bankless premium subscription? No ads, just straight to the content. But that's just

one of many things that a premium subscription gets you. There's also the token report. a monthly bullish, bearish, neutral report on the hottest tokens of the month. And the regular updates from the token report go into the token Bible. Your first stop shop for every token worth investigating in crypto. Bankless premium also gets you a 30% discount to the permissionless conference, which means it basically just pays for itself. There's also the Airdrop Guide to make sure you don't miss a drop in 2023. But really, the best part about Bankless Premium is hanging out with me, Ryan,

and the rest of the bankless team in the Inner Circle Discord only for Premium. members. Want the alpha? Check out Ben the analyst DGENPIT, where you can ask him questions about the token report. Got a question? I've got my own Q&A room for any questions that you might have. At Bankless, we have huge things planned for 2023, including a new website with login with your Ethereum address capabilities, and we're super excited to ship what we are calling Bankless 2.0 Soon TM. So if you want extra help exploring the frontier, subscribe to Bankless Premium. It's under 50 cents a day and provides a wealth of knowledge and support on your journey west. I'll see you in Discord. Bankless Nation talking about decentralized social networks today with Dan Ramero. Here's the co-founder

of Farcaster, which is a new decentralized social network. This captured the attention of many in Web3. There are a few platforms competing for our attention these days. And Farcaster is certainly one of them. We're going to talk all about that today. And Dan, it's great to have you. Welcome to Bankless. Thanks for having me. Okay. Let's start here with a big question. What is broken about Web 2? Why do we need Web 3 social networks? Why can't we just be satisfied with the Web 2 versions of these things? And how do we even improve on those versions in a crypto version of a social network? Well, maybe I'll start with the contrarian answer is I don't necessarily think Web 2 is broken. I think it can be approved upon.

And so if you kind of just take the history of the Internet, Web 1, you have decentralized protocols, HTTP, SMTP, DNS. and if you wanted to put information online, you basically registered a domain, figured out a web host, put up a website, and then hope people would find you. Google made it a little bit easier. And then you kind of had with Web2 this explosion of user-generated content.

And with that user-generated content, you got to a place where distribution became a lot easier, right? You could start a podcast, put it on the iTunes store, and then eventually on YouTube, use Twitter for that distribution, have a substack. And so you kind of have all these great publishing tools where you can reach a massive audience. And right, like the whole creator economy as a result of Web2 getting these platforms to scale and then allowing people who might be a little less tech savvy, but really want to go be entrepreneurial and build an audience like yourselves to get to a really large scale. But as that scale happened, you know, we went from kind of this classic Meg on Twitter in the early days was, you know, it's just a bunch of people saying what they ate for.

breakfast and then kind of call it around, I don't know, 2017, 2018, it was a threat to democracy. And so it's kind of a pretty big jump in a 10-year period to go from kind of a bunch of nerds talking about what they had for breakfast. This is going to foundationally change the way our society has run. And I think with that kind of growing importance in society and just by function of having billions of people using all of these Web2 services every day, we're starting to see some of the limitations of kind of having a single platform be, for example, the public square on the internet

if you want to describe Twitter like that. And it makes it really difficult when you have a global audience and a global user base to have a group of people in San Francisco, whether it's the public version of Twitter or a Twitter owned by Elon Musk, making decisions that impact

how discourse, speech, communication happens globally. I think for the last few years it was almost kind of like hardcore crypto people were interested in decentralization. And then there was this kind of branding that the only people interested in new social networks were kind of like right-wing people who had been de-platformed from a Twitter. But I think quickly we've seen with Elon taking over, there's a whole new group of people

who are all of a sudden being like, hey, I should be able to post a Macadon post and not have it be censored. And so I think people are reevaluating some of this stuff from first principles and realizing, hey, there are other protocols out there on the internet today that we use that are decentralized permissionless, the web and email being, you know, two really important ones. I mean, Substacks is a great example of a Web2 company built on top of a decentralized protocol email. And so I think what we're hoping to do with Farcaster is marry the kind of decentralized and permissionless protocols of Web 1 with the usability, convenience, ease of use that Web 2 has ushered in that billions of people around the world are now able to create user-generated content online

and kind of participate. And so I think if you can marry the two of those things together, then you have a superior your system. So I think what you're saying is the distinction that you're making when I use the term broken to maybe characterize Web2, you're sort of toning that down. You're saying, well, not broken in that we need to do a wholesale, you know, rip and replace. But there are fundamental areas of improvement. So not broken, but improvement. And I think maybe this is kind of semantics between the idea of something broken and the idea of something needing to be improved. But I think what you're saying is don't throw out the baby with the bath water here. There are some fundamental things that Web 2 did.

correctly, namely getting the use case, right? And what we actually need to do is figure out a way to improve on all of the flaws. If we were to look at some of the flaws with Web2 right now, I think you sort of hinted at a few of them, this notion of Web2 going to a place where Twitter going to a place where, you know, it was basically doing nothing to it was destabilizing our democracy. Wow, that happened very quickly, right? And so that's one thing that people point to. Another thing is bots are everywhere. There's no notion of good identity or human-based identity. Another of us, of course, as you kind of alluded to this, is it's very controlled. That means it's very censorable. I don't have the ability to kind of own my own Twitter profile and my social

graph. It's basically the property of Twitter. And I feel somewhat like a, you know, peasant on someone else's feudal land. So maybe these are the things. Is that list what you would point to as the improvement areas? And I guess my question is, how does Web3 help any of that and does it actually help any of that? Yeah. So I think all of those points that you made are accurate and things that Web3 can improve on. But the way I describe Farcaster is there are two foundational principles that we are trying to achieve. And they solve two different problems. So the first is more for someone who has an audience, right? You have an audience with this podcast. You rely on Web2 platforms, which give you, again, massive distribution, ability to get your word out. But,

But you don't own your audience on, I'd say most of those platforms, substack being a rare example where if you're using a platform like YouTube, you could have built up 10 million followers over five years. And on an arbitrary whim, no matter what the reason, they can turn your account off, and you have no ability to get kind of like one last export of those subscribers. They have, by the way, Dan. I don't know if you're aware of this, but on Mother's Day of last year, YouTube shut down bankless. That did happen.

Oh, I thought you were going to say that they let you export the subscribers. drivers and then. You're like, wow, that's a pretty pioneering thing. Nope. They shut us down. No, the worst one. Yeah. Okay. Yeah. And so what do we do? We go into cut no, no word, no word of warning, just an email, friendly email from some bot somewhere that says, your account shut down. And there's no kind of escalation process. And the only thing we could do, Dan, at that time, was to get real out on other social media platforms and say, look what YouTube did to us. Which was only a luxury that we really had, because other accounts were shut down that same day that didn't have the same sort of like following that we were able to invigorate to get the attention of YouTube.

Yeah. So apologize for interrupting you, but this happens. It happens in crypto. It happens in other communities as well. So go on. Well, yeah, I guess I don't need to sell you on this. But the idea that you could have built up this audience, generate a lot of revenue for whatever platform. And with the snap of a finger, it's gone. There is no arbitration. There is no get in front of a judge and make your case. Instead, you get an automated support email, treating you no different than one of the kind of like CZ spam bots on Twitter. I think that is unacceptable in a world where creators are real businesses and this is your livelihood. And so contrast to email where if for whatever reason you decided to not work with Substack

or SubTac didn't want to work with you, it would be ludicrous if they held your emails hostage. Part of that is just a norms thing, right? Email preexisted a lot of these Web2 platforms. The idea that if you have an email newsletter, you own your newsletter subscriber list is just kind of that's what the market forces. Whereas I think with these Web2 platforms, because they've been so attractive from providing distribution and scale, they've been able to get away with not allowing a kind of publisher or a creator to own their audience directly. And so I think the foundational to Farcaster is you own your relationship with your audience. And actually, it's not even quite that because it's your audience owns the relationship with you.

So if someone follows you on Farcaster, it's not like somehow you now kind of go ping them. They've actually opted into following you. But the important thing is no third party can come in and say, sorry, these two adults cannot decide to connect with each other over the internet. So that's on the creator publisher side. I think that the second thing that's really important, and maybe I'm dating myself here, but I remember when Twitter was a very open API and had a flourishing ecosystem of apps. And a lot of people don't even know, a lot of the core features of Twitter were invented, A, by Twitter users and B first adopted in third party clients. So at replies, hashtags, quote tweets, retweets. Those were all conventions within the 140 character tweet box.

And then you had clients like tweet bot, TwitterRific, Tweety, inventing, okay, this is how you natively handle it. And for the first of views, Twitter didn't even have a mobile client. They actually acquired the app called Tweety, which invented Pull the Refresh. So all of the apps that used Pull the Refresh today, you actually use a patent that Twitter owns and has decided to not generously not prosecute against. But anytime you used Pull the Refresh in an app that was invented by a third. party developer on Twitter's API. And then roughly around 2014, they basically shut that down.

They needed to make money on advertising, and it's very difficult to do that in a kind of third-party app ecosystem. And actually, more timely, as of I think like last week, they just turned off third-party apps, right? They kind of existed in this like weekend state for the last 10 years, but now, like, I don't think tweet bot works. Like, they just shut it off overnight. And again, no communication. These are people building businesses, even in this kind of like weird or Twitter never really liked their API. And another point, prominent example from the previous era was Facebook had an open platform. Pre-Mobile, it was kind of like had all these games and all these things that are built on top of it. Zango was a

company that basically built this entire business on Facebook. And then in a very short period of time, they kind of said, hey, this is deprioritized, tough luck, go find a new way to build out these games. And so those two examples from that era changed, I think, a lot of developers' opinions on, I'm not going to go build a business or make a serious investment in a platform knowing that you can have the rug pulled out from one of them. And so I think with Farkaster, very much inspired by Ethereum and my time in crypto, it's you need to build a platform that hits a bar that is truly permissionless, both on the access to the data and the APIs to the system working so that as a developer, if you want to go build a client, you know, one of the early

people building the actual protocol shouldn't have a say what client can be built, just like Ethereum, right? I want to go build a competitor to Metamask. There's not some approval processes that said, well, MetaMask was the first wallet or, you know, one of the first wallets, So we're going to actually decide whether wallets can come in. A rainbow, coin-based wallet. You know, anyone can go build a wallet on top of a network like Ethereum. And I think that makes Ethereum stronger for it. So that's the other bar we want to hit with Farcaster.

So you own your own audience or that relationship belongs to you. And as a developer, your relationship with your users and the data completely permissionless. I think that was a really great exploration into some of the shortcomings of the current Web2 world. And Dan, I know that you say there's not much broken about Web 2. there's only things that we can learn and build upon. But I think in your answer just now, A answer to the question of what's broken about Web 2 is actually kind of like the shareholder equity incentive structure

because that's what created a bunch of monopolistic tendencies that you just listed out from Twitter and Facebook, where Twitter began as a very open ecosystem with APIs to enable third-party creators, but due to what Twitter is, a Web2 company, any sort of thing of value that got built by somebody else was simply absorbed into Twitter, and eventually that aggregation and centralization and monopolization created the Twitter, the closed form of Twitter that we see today. And same thing

with Zynga and Facebook. So maybe to answer what's broken about Web 2 is actually like the traditional equity structure that a lot of these normal companies are kind of built into. And we can ask the question, what's broken about Web 2 and what does Web 3 do to fix this? I want to ask this in a slightly different way. A very early implementation of Ethereum was PEPeth, which was Twitter on Ethereum, where we could just say, oh, we can make Twitter, but Web3. We'll take Twitter, we'll copy and paste it, and we'll put it on Ethereum, and then, boom, we have decentralized Twitter. That really never took off, but maybe under a farcaster kind of structure, that might be able to work. But there's one aspect of this conversation, which is how can we just take systems that already exist, Twitter, Facebook, and then make them decentralized in a more open environment?

but also what does Web3 native social networks enable that Web2 social networks will never really be able to enable? So there's like some conversations which are like decentralized Web3 version of Twitter can help with making sure that people don't get deplatformed. But that's only about fixing Web2's faults. What about these more decentralized social networks? What can they really enable that Web 2 will never really be able to enable? What unique properties about Web 3 social will Web 2 never really be able to have? So I want to start with first going back to this idea of developers having permissionless access to the data and APIs.

I think that in itself is underrated. If you allow developers complete freedom to do whatever they want, they're unbounded in terms of if they have a creative idea, they can go do it. And then they have to convince other people to use it as a separate thing. But there are no API terms of service that they necessarily need to worry about. And I think that alone is actually an important thing. And whether you call that, oh, you could build that in Web 2 or Web 3. Put it to the side is like that just,

existing is a primary motivation for building something like Farcaster. As it relates to more specific features around cryptocurrencies, we have one today. So we actually allow you to connect another wallet within Farcaster. And so you can kind of have a native news feed of what the people you're following, who you know, you're following them for their Twitter-like content, right, like small text posts, but also what's happening on chain. And so you're kind of getting this blended news feed of the kind of stuff that they're talking about, but then also what people are actually doing on the blockchain,

which it natively starts to create conversational points around anything that you are doing on chain, right? You mentioned an NFT. Now that natively shows up in the feed, which now NFTs, instead of being this kind of single player thing, can now be more multiplayer. Composibility of feeds. Exactly.

So that. And then I think that the other thing, Farcasters namespace account, right, like the way you kind of define yourself, is also an NFT. And so that's going to be an Ethereum 1 next year. And so then you get all the composability that can happen with an NFT, so you could have a account that's owned by a group of people, right?

And you could have a New York C20 token associated with that and, I don't know, use a nouns Dow style governance. Like the possibilities are endless in terms of ownership of a given account. So there's going to be a lot of composable stuff that will happen there. And then I think the other important thing is every user on Farcaster, by definition, has a working public and private key. It happens to be an Ethereum address. and if you think about what that all of a sudden starts to enable, you can out of the box have end-to-end encrypted direct messaging that is as good as sick.

And in some ways better because you don't need to have a phone number associated with it. Another example that you can start to kind of think about because there's a lot of a development that's happening in zero knowledge proofs is you kind of have all these academic potential uses of zero knowledge proofs that now can be developed permissionlessly by any developer because you can make the strong assumption that every user already has a live working public and private key. And so you could potentially make new types of speech that is kind of like based on some amount of on-chain credential, but at the same time,

you don't necessarily have to reveal who you are. So a basic example would be, I own a crypto punk. I want to actually be able to say something anonymously, but have the credibility to say, I own a crypto punk, if that's something that matters to you. But you could imagine other types of on-trained credentials that could be, I don't know, around politics or around medicine. And now I could be a doctor who is well regarded, right? Maybe I've won some prestigious medal in the field. And I want to speak up about something in medicine, but I feel like if I was to do that under my real name, I would get, you know, a lot of pushback from the community versus I could say something, have the credential that is provable on chain and actually do that in a zero

knowledge way. So I think those primitives are going to allow developers to have just kind of a lot of creativity in what they built. And so we're really focused on building the core level set of primitives and then really trying to make it a developer platform that, you know, you build Ethereum, then you eventually get uniswap or OpenC, and you start to get people's creativity is actually what drives the growth in the use cases. Okay, Dan, we're definitely peering at the top of this very large rabbit hole, which is this whole entire conversation of more decentralized social networks. And we've touched on a bunch of different possible like past that we can go down. I want to go back to one that we've already started to go down.

I really want to drive this point home because I think it is at the basement of what is a very large stack of cool, awesome expressivity of developers and users on top of it. And it goes back to what you said about assurances around like the open API structure or like the assurances that developers can develop on this platform and not get rugged. Because that's a big talking point about like even like Facebook's like changing or closing down their APIs. This conversation goes back to like why does the theorem exist to build unstoppable applications. And this also is a very core property, a very core theme of what we often frequently talk about at bankless, which is settlement assurances. We use the term settlement

assurances to describe property rights. Like, why is Ethereum and Bitcoin different than like like, like, light coin or insert your faster, smaller blockchain here? It's because of settlement assurances. You are assured that your property is yours because of how strong the security is on Ethereum and all, and smart contracts, right? And so these settlement assurances allow people to think into the future. And we've related this conversation to like things like laws with the Supreme Court. An executive order is a very fast law out of the president. It can get overturned by Congress. But if Congress writes a law, that can get overturned by the Supreme Court. And when the Supreme Court says it's final, it is final. And what we've created with smart contracts is a new level of

finality that gives people settlement assurances to think into the long term. And that's the same conversation I'm seeing what you're talking about with creating a developer platform that developers can't get rugged. And I want to ask you about what is the difference in the assurances that developers have in this new world? And what are the downstream net effects of producing a developer platform where the developers have the assurances that the structures that they build will be around forever? What kind of creativity is unlocked at that point? Yeah, so I want to be clear up front. One of the reasons Farcasters are still invite only is we aren't at that bar internally of what we'd say is like an unruggable platform. And we've put a lot of effort in over

the last year and we're hopefully getting pretty close. We're hoping to have it kind of midway through this year at a place where Farcaster, from a developer standpoint is actually permissionless and, you know, call it unruggable or the idea is you're sovereign. As a developer, you will have full access to the data and APIs of the protocol. And that's built with something called FARCaster hubs. And actually, I think it's important to delineate that we only do a minimal amount of stuff on chain. And part of that is actually we're trying to keep cost, fees and usability high and costs and fees down. And so what we do is when you sign up for an account, we actually create that on chain. Today, it's on TestNet. It will be on

Ethereum L1, hopefully, you know, by July. And what's great is as a default, every single user on Farcaster owns their actual account, their identity. And to use another example, a system like email. So if you use a Gmail address, you actually don't own that Gmail address. Gmail can actually at any time, just revoke that Gmail address. There is no arbitration. You can't port it to another service. Now, if you're a little bit more sophisticated and you own your own domain, you can use G Suite, pay a little bit more, and then now you have the ability to port your email. So email is a, technically it does work in that you can port, but the practical reality is most people use a free email address. And actually, they don't have to think about it most of the time. But if you do run

into an edge case where you do get suspended by Google and you lose access to your email, that's a really, really tough thing. With Farcaster, we're making the decision that every single user, no matter how sophisticated they are, actually gets a sovereign identity that's going to be on Ethereum. And we actually use something called like a gasless transaction, a a transaction and we just seamlessly onboard people through the Farcaster client. And we actually think that that's great because it allows both a sophisticated person and a non-sificated person just onboard just like they would Web 2. But behind the scenes, they do have the actual ability to move that identity anywhere

they want and within any client they want. That's actually a foundational component to what the user is on Farcaster. But more importantly, that also gives the developer the assurance that if they convince a user to use their app, there is no third party that can come in and say, say, you know, like this Twitter example, oh, sorry, we're the one that actually owns the identity. We're going to revoke that. Contrast that to actually a federated system, something like Macedon, you're getting your identity provided to you by a server. So if that server wants to revoke your identity, unless you're running your own server, like it's going to be very similar from an email

standpoint in that you just lose access to that identity. So having the pointer be sovereign and actually on Ethereuml1, we think is worth the cost and the complexity to that. In addition to the composability and I think the general benefit that you can get from having it sovereignly owned on Ethereum. Getting the other data in APIs to a permissionless state, once these kind of hubs exist, which you can think of a hub as like the Ethereum node but for the Farcaster network, the other decision we've made is we are actually going to limit the amount of data per user on the protocol in an effort to keep the requirements of running one of these hubs reasonable for an average developer. And so you can think of it,

this. We were going to cap you at the equivalent of 10,000 tweets. We call them CASS. So on the 10,000 and first cast, we bump your oldest one out at the protocol level. And that's the implementation for the hub. And some people might be like, oh, well, I wish we could have all of it. But the nice thing, one, all the data is permissionless. So you could back it up to RWeaver, IPFS. You can do that yourself. But the benefit that you do get in kind of making this bounded data per user is we really think we can get up to 100 independent hubs that are running, which are all going to have a full global state of the network. In the same way that if you're running in a full Ethereum node, you're going to have full global

state. And that ability for a developer forces the network from a kind of like, we can't be a bad actor as the kind of initial developers and having the biggest client. We can't say, oh, we're going to gate this stuff because we've actually intentionally built the protocol in a way that I can be, you know, two years from now as an independent developer, I can spin up a hub and I can actually have the full global state of what the forecaster protocol is in a given point. Yeah, there's a bunch of parallels with this design, with how the Ethereum protocol is designed, which makes me think that you're onto something here.

I've been in crypto for 10 years. I think Ethereum is the right balance between decentralization and pragmatism. And I think building things that people can use are an underrated thing in crypto. I think a lot of people tend to focus in the ideology, which is important. But what I showed up to to work at Coinbase and now what I'm doing with Forecasters is I want to build a protocol that has a billion plus people using it. But I want to do it in a way that doesn't compromise on the decentralization and the sovereignty at the user account level. Maybe it's a fool's errand, but that's what we're trying to do. That's super cool. This idea of building a social platform that is rugless, not bankless, but rugless, which maybe that's another podcast we

spin up at some point in time, David. But I think devs will appreciate that, particularly devs who kind of look at sort of the long term. I think that the bet here you're making is that when Twitter destroyed its APIs essentially destroyed all of its permissionless innovation, and didn't it? And the only innovation that could happen is innovation that could happen with its internal employees. And by the way, they just reduced their headcount by 50%. So do we think we're going to get any new big features from Twitter anytime soon? We'll see. Probably not. But this creates kind of a permissionless ecosystem. And I think that's the bet that permissionless ecosystems win out because you have everybody in the world sort of hacking on this, the best employees

and the best developers don't actually work for your company, do they? They're outside in, you know, places in India or all parts around the world. So I get that. I think from somebody who's not a developer, somebody who's never been de-platformed before, they're still not quite clear on this value proposition entirely. And I want to get back to David's question of what's new about Web 3? Why is it a step improvement from a Web 2 social media tool if I haven't been de-platformed yet? And I think that's the majority of people listening to this have not been de-platformed from Twitter or from Facebook or from their YouTube account. They can imagine it might happen,

but things would have to get bad dystopian in order to do that. And so they don't really see the value proposition of being rugless. That's why I want to go back to kind of the on-chain features that you're adding with Farcaster. So, Dan, before we entered this episode and we started recording, David and I had an opportunity to go download Farcaster on our iOS device, right, an app-type version. And for listeners right now, I believe Dan, this is all kind of private beta, so it's invite only.

And so we asked you. We're like, hey, Dan, you're coming on. Can we get the invite link? And you sent us that. Thank you. What's interesting about this is I kind of see things that social media apps are not providing today, like the Twitters of the world and Instagrams. You have this whole section of events that you were talking about where I just plugged one of my eth addresses in. And I can see that I'm into the bankless ultrasound money podcast episodes.

It's right in my events, Q. And I could go look at David's profile, and I could see all of the things that he did with his on-chain data in his wallet. And that's kind of interesting to me, right? Maybe I set an alert for every time David buys an NFT so I can ape in because he's got the alpha. You don't want to do that.

There's this tab called NFTs, where I could see kind of the NFTs added to my address. And then you're making this comment about identity. Well, I was actually able to set up an RSA at RSA is my handle on Farcaster right now. And you're saying that in the future will be kind of, it's smart contract driven and is fully composable with the rest of the on-chain defy NFT Web3 ecosystem as well. And so we have these kind of primitives.

And I guess what I'm saying is I think this is a thesis now that I get into it. We're still very early. But I think that every single social media app is going to need to be redesigned to incorporate on-chain Web3 datasets, tokens, NFTs, identities, identity, all of the innovation that's happening in Web 3. And I think, Dan, they're going to be super freaking slow to do this and respond. And they're going to be leapfrogged by social media applications and platforms that actually do. And maybe even, they'll find that it's counterproductive to their business model to expand into Web 3. I'm reminded of like Instagram right now.

They just rolled out an NFT feature. Guess what? There's a 15 to 30 percent tax if you issue an NFT on their platform that they take. That's a pretty high take rate for Web3. Like, we don't do that in crypto, do we. We don't do that here. Like, yeah, we don't do that here. And so I guess what I'm saying is, this is the early stages, but I sort of see when I download something like Farcaster, I get like the Twitter experience, but now I have some on-chain data that's added to this and it's starting to become valuable. Because the big question for me, going to a conversation like this, Dan, is like, I know people aren't just going to come for the censorship resistance. It's decentralized.

Okay, cool. I don't care. I'm not being de-platformed. They will come for the features. And to the extent that you are able to innovate faster on those Web3 features and make that valuable, then I think we'll start to kind of draw the audience. Anyway, that's how I'm thinking about it. What's your take on that thesis?

We completely agree. It's actually one of the reasons we're doing both the protocol and the initial client at the same time. Our view was, one, we could go build the world's best protocol, but then we're going to have to spend a whole bunch of time trying to convince other people to build on top of it. And that in of itself is extremely hard. And so where we started was, hey, we're going to build the protocol and the initial client, and we're going to do a whole bunch of hard work

to try to figure out features and a set of use cases that are going to get at least some initial group of daily active users. Because I don't think any other developer is going to want to go build on the protocol if it doesn't already have active users, users use software, they use clients. And so thus why we started with building our initial client, built those initial features. And our thesis is if you build the best network for people who are interested in crypto and Web3, that is an amazing initial starting community, especially if you believe that we're going to continue to have more stuff that ends up on chain, whether that's visible or kind of like behind the scenes in the background. That's our bet.

So we're building the initial app is a social network for people interested in. crypto and Web3, and thus the set of features that we've built, right? If you say GM on Farcaster, we change the like button to a GM, you have the NFT features. If you actually go to any given NFT, a Cryptopunk, you can actually see everyone else on Farcaster that provably owns that NFT, right? So if you find that there's some community, whether it's not a Cryptokovun, Cryptopunks, that you are interested in finding those other people, you can actually just go and follow every single person.

So you could go take your bankless NFT, click that as a cat. and then actually find everyone else on Farcaster who minted that NFT. And so those types of features are for our initial user base, highly engaging. And we're going to continue to add more of those. And actually, we have a kind of bet that over the course of the next few years, you're going to have more and more just things. Web 3 objects is what we call them, just natively represented on chain. A mirror post is another great example.

From the surface to the average user, that looks like a medium post, right? Like no different. It's a bunch of text rendered on a web page. But what's cool about a mirror post is you can have the instantiation of it on our weaf. We can permissionously pull that into our client. In addition, there is interactivity with a mirror post because you can mint it and you can trade it and collect it. And so all of that functionality, if we're kind of taking Web3 as the bet and understanding natively what's happening on chain inside of a social experience, you almost start to get all this innovation that's happening on chain for free.

So if you're natively surfacing whatever someone's doing on chain in a social way, there's some new use case that pops up. You're now starting to kind of have an initial conversation about it, but then you can actually add and make the features even better. And so that's for sure how we're approaching it. And I think a lot of criticism that I've heard about Farcasters Futile to be working on this stuff because it's too cryptocentric. Our point of view is we'd rather actually focus on what might seem like a niche, but a niche that is the future. And for us, if you can actually get the smartest people in crypto engaging in high-quality way on this new social network, I think it'll naturally start to bring other people who are curious in because they're going to say, oh, this is high-quality discourse, right? Vitalik is talking about the need for new institutions on Farcaster, and he gets 40 replies that are actually thoughtful and not a lot of spam. That in of itself is also kind of interesting.

And so I think for us, it's very much about we have to build a compelling product that people can use as a way of, bootstrapping the actual protocol. Because if you can get to some semblance, whether it's 10,000 or 100,000 active users on the protocol, then I actually start to think that you're going to get critical mass for developers interested in building other new applications, which may actually increase the aperture, right? Someone builds a very specific app that's dedicated to sports fans.

We're never going to be the best at that. But if someone else has a great idea for that, and you already have 100,000 people who are actively using the protocol, that's your initial seed community. and then you bring in people who have no idea that this is all powered by crypto, they're just coming to use that app. So the initial use case here for FARCaster

and the focus from a user persona, like the type of user that you want, is like the full NFT, crypto-native type person. And they're going to want to migrate here because Twitter doesn't have the features, doesn't have the on-chain features that they actually want and need

for their communities. Not the censorship resistance. Because I completely agree with you, the reveal preference is most people don't care, right? Like they only care when they eventually get booted, but for most people, that doesn't happen. So Twitter actually works for them right now. so you have to have better features.

And you don't care, Dan, that right now the criticism people say, yeah, but the crypto-native population is so small. I mean, what are we talking about? Maybe millions of people. How many daily active users does MetaMaskath? That's kind of your target market, basically. Your response to that is, I don't care, because that number's going up, and it's going up real fast?

Basically, that's where people are going to want to spend time. And I think if you were to look at early Twitter in 2007, 2008, it was a bunch of tech nerds in San Francisco who were going to South by Southwest, and that was the criticism. It's like, okay, this is just a bunch of nerds. We would want to share what they're having for breakfast. These people are narcissists. And maybe there's some truth to people who use Twitter. I use Twitter a lot that they're narcissists. But the reality is, as it turns out, there are a lot of people in the world who find that interesting, even if they're not into tech. It just took 10 years to get there.

We're about 10 years out from threatening democracies, is what you're saying with HIPB protocols. My goal is to not have a threatened democracy, but yes, I think things that are... That kind of impact, massive impact. Things that are big, look small and are very easy to ridicule. And I mean, I saw this at Coinbase. I was there in 2014, 2015, 2015, 2016. And so many people were like, why are you wasting your time on Bitcoin? Like, did Bitcoin die? Like, all of that stuff, right?

And actually Ethereum was what really kick started, I think, the second chapter for Coinbase. And then after the kind of like 2017 hype cycle, it was clear that like crypto wasn't going to go away, at least to smart people. And I think you've had multiple cycles. But I think generally that's the same thing is going to happen for decentralized social networks is people are going to say that, oh, they're a toy. they're never going to hit scale. Like, you know, it's impossible to beat Facebook and all this kind of stuff. But look, I mean, if people say that you can't, like, compete with Facebook, one, TikTok went from zero to whatever it is today in a very short period of time. And Facebook really hasn't been able to compete with that. So that's a counter example that you can compete.

And then, too, we're seeing this even now. Like, people said last year, you can't compete with Google. And then all of a sudden, chat GPT shows up. And then people are like, oh, my goodness, like, this is going to replace Google. And I think that's probably overblown. But if you're working in technology and you're work in an area where there's just constant innovation and things are getting pushed forward, to have the point of view that we're just going to be in this stasis where it's like impossible to beat the big guys. People used to say that about Microsoft and IBM. It's just like a lack of history for most of these folks. And so I'm completely fine being ignored for a while. All I want to do is make incremental progress every week, grow other user base 5% every week, find people who are interested in the features that we're building, right?

These crypto-native features that aren't being built on other social networks. This is the home for them. And over time, I think the market gets big enough. And fortunately, I think we have a long-term perspective on that. It worked for Coinbase and hopefully it works for Farcaster. This, Ryan, reminds me of Chris Dixon's take that he had when we were talking to him way back when about how A16 Z used to be called an internet fund. And then it just became a fund because the internet took over.

And his take was that that's going to be the same thing for crypto. So, like, first, A16C's got like a crypto fund. But that's just going to take over what venture capital is because everything is going to become on crypto. And I think that's the same take that Dan's leading with is like there's a population of highly engaged crypto people that crypto population's up only. And in the future, fast forward five, 10 years, the crypto people are just the internet goers that we know of today. Dan, I want to drill down into this client-centric design of a decentralized social network. Because my take coming into this podcast is that there's actually no way to produce a decentralized social network without

it being a client-centric ecosystem. And also something you said earlier. is about like we can create like a specific thing for sports fans that's built on Farcaster and it's just optimized for them. They don't even know it that it's crypto. And this also goes back to what we were talking about earlier with like the open model for Twitter or Facebook where there was like an app ecosystem and anyone can build on top of Twitter. The belief I have is that that kind of open design allows for these systems to adapt and flex

to the wants of their users. Like when many, many developers can build on top of something, they will build something that's fundamentally useful, or it's not, and they stop building it, or it is, and they continue building it, and they continue refining it. But first and foremost, it takes that open API model, that open design model, to actually allow for developers to kind of believe that there's something useful there that they want to build and then go build it. And in start contrast to the current Web2 model, the current Web2 world, where like if you open up Twitter on the browser, and then you open up Twitter on the phone, it's the same Twitter.

Same thing with Facebook. Like if you open up Facebook on the internet, Facebook.com or the Facebook app, it's the same Facebook. My intuition tells me that something with a decentralized social network that's a very client-heavy ecosystem is that it can change shape.

It can change form based off of how you want it to be or who you are or the clients that you're using because you want to engage with it in a particular way. Can you elaborate on this unique property of a decentralized social network? And I'm actually having trouble understanding what you mean by client-centric.

What does that even mean? mean, maybe the question for David and Dan, too. Yeah. So the way I think about it is we want to build an internet scale protocol. Internet scale protocol is going to have billions of people using it. And there are going to be many apps and services built on top of it. In order to get the many apps and services built on top of it to have those billions of people, you need developers interested in building.

Developers are going to build on the thing that makes it easy for them to find users. The reason people build on mobile app stores, despite the 30% tax and all the ring role that they make you go through is when you have a phone, it's attached to your body when you're a daily active user of a phone. So it's this amazing platform to be able to build, get someone on, you know, to install your app, then you have push notifications. And so Apple has been able to bootstrap a huge ecosystem by virtue of actually just getting people to buy their phones and then hold them on their body all the time. So we wanted to take the same approach where the way to kickstart the FARCaster ecosystem is build the initial client, build some of these

features that get people into the door, a lot of people didn't find them that interesting, but there were enough people that found them interesting that we were able to kind of create an initial kernel of users, highly engaged users, that once you hit a certain amount of conversational liquidity, so if you think of like defy, you need like TVL or whatever, that for social networks is, especially a public social network, if I open up the app, is there something new to see? If it's too stale, then you're just going to have people turn. Whereas if you can kind of beg, borrow and steal, whatever you need to do to actually bootstrap that initial community, then what you can do is use the initial client to continue to onboard people,

continue to grow the total number of addressable users on the protocol. But you're going to have developers start to tinker around because now there's all this data and there are all these users. And so we've seen a whole bunch of different apps built on top of the initial set of Farcaster APIs, which I think are really, really bad. But it just shows you that there's a lot of demand. People love playing around with this stuff because they didn't have to ask us for anything. They can just, once they want to build it, they can just go and do it. And it'll only get better later this year when we have hubs and we hit the bar around permissionlessness.

But I think to go back to this kind of like why we think the client ecosystem is so important to get right, it goes back to your point. Or rather, if you think about what the hard thing is when building a social network, yes, it's coming up with some novel new mechanic and idea. But there are plenty of examples of people having built social networks with the mechanic maybe, you know, five years too early or whatever. And it's not on the merit of the idea. it's all about distribution and getting users. And so what we're trying to do is dramatically

reduce the difficulty in having an app that has social features. People are already going to have an identity. They don't need to be onboarded again. They're going to potentially have all this public data because it's a network like Twitter that you could potentially use machine learning to figure out what their preferences are. Right. If I built that sports client, right, that's like if you're really into football. And you had already talked about that you're a, I don't know, Vikings or Giants fan in one of your casts before, I programmatically kind of go look back. And then when you open up the app, it's like it already auto-suggest what you're interested in. And so this access to the foundational identity, the actual data, like, you know, what you're

posting, what you're liking, who you're following, all of that information that is available, another developer can actually use to bootstrap their new app. And so making it dramatically easier for new social apps to be built because as a user, I don't need to re-sign up for the whole system. And then similarly, like, they can actually do a lot of intelligence stuff based on all the publicly available data gets you to a place where it can be a shared layer of identity of the data. And then actually the other thing about it is you can now use it for distribution. Right. And so we actually just had an app come out this weekend, still early stage, called Absorb.

And what they're doing is they're using the Farcaster protocol to post seven second videos in an O'Divine. And the way it works in our client, it's going to show up where it says, I just posted a video to absorb, click here. And we don't even have video in our client yet. We just haven't gotten around to putting that in there. But if you were to open up absorb, it's actually going to show you all the other posts that are on the FARCaster protocol that follow that format in a very vine or TikTok like way. And so it's using a subset of the protocol for all the kind of like primitives that it's available to it. But then it can actually just build a completely new experience. And let's say that app starts to get bigger. Maybe there are plenty of people who use that app

who don't even know that it's using Farcaster or Crypto. It's just like, oh, cool, this is like some app where you have a bunch of people doing what they're doing. Maybe they come up with some new novel mechanic that's slightly different from Vine or TikTok that does really well with a certain sub-segment of users. Great. That's all benefiting the Farcaster Protocol and they're benefiting from the Farcester Protocol as well.

So it's pretty symbiotic. Uniswap is the largest on-chain marketplace for self-custody digital assets. Uniswap is, of course, a decentralized exchange. but you know this because you've been listening to bankless. But did you know that the Uniswop web app has a shiny new Fiat on ramp? Now you could go directly from Fiat in your bank

to tokens in Defi inside of Uniswap. Not only that, but Polygon, Arbitrum, and Optimism, Layer 2s are supported right out of the gate. But that's just Defi. Uniswap is also an NFT aggregator, letting you find more listings for the best prices across the NFT world. With Uniswap, you can sweep floors

on multiple NFT, and Uniswap's universal router will optimize your gas fees for you. Uniswap is making it as easy as possible to go from bank account to bankless assets across Ethereum, and we couldn't be more thankful for having them as a sponsor. So go to app.uniswap.org today to buy, sell, or swap tokens and NFTs. Arbitrum 1 is pioneering the world of secure Ethereum scalability and is continuing to accelerate the Web 3 landscape. Hundreds of projects have already deployed on Arbitrum 1,

producing flourishing defy and NFT ecosystems. With a recent addition of Arbitrum Nova, gaming and social daps like Reddit are also now calling Arbitrum home. Both Arbitrum 1 and Nova leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM-compatible. On Arbitrum, both builders and users will experience faster transaction speeds with significantly lower gas fees. With Arbitrum's recent migration to Arbitram Nitro, it's also now 10 times faster than before. Visit arbitram.io where you can join the community, dive into the developer docs, bridge your assets, and start building your first app.

With Arbitrum, experience Web3 development the way it was meant to be. Secure, fast, cheap, and friction-free. How many total airdrops have you gotten? This last bull market had a ton of them. Did you get them all? Maybe you missed one. So here's what you should do. Go to Earnify and plug in your Ethereum wallet, and Earnify will tell you if you have any unclaimed airdrops that you can get.

And it also does Poaps and mintable NFTs, any kind of money that your wallet is. can claim Earnify will tell you about it. And you should probably do it now because some air drops expire. And if you sign up for Earnify, they'll email you anytime one of your wallets has a new air drop for it to make sure that you never lose anirdrop ever again. You can also upgrade to Earnify premium to unlock access to air drops that are beyond the basics and are able to set reminders for more wallets. And for just under $21 a month, it probably pays for itself with just one air drop. So plug in your wallets at Earnify and see what you get. That's eA-R-N-I-F-I. and make sure you never lose anotherirdrop.

I get all this. And that's why I was kind of questioning, David, like why you call this a client-centric design? Because to me, that's protocol-centric, really. What Dan is saying is we're doing the base protocol so that anyone can build a client on top of it. We're just bootstrapping the very first client in order to get people. That's like our bootloader for the client.

But the value is really is kind of the protocol. It's like as if Twitter released the Twitter website and the app in the early days. And then also a protocol that anyone could build on the client. top of that was completely rugless. Or it's as if RSS, you know RSS didn't pick up in many ways when RSS was first introduced. Well, maybe that was because RSS, there was never a kind of a company developing the first client for RSS and kind of like acting as a bootloader. So that's why I was asking, David, why you called it a client-centric design. Don't you mean like protocol-centric design? Yes, yeah, protocol-centric as in there's one Farkaster Protocol.

I guess what I meant by client-centric is that whereas Twitter and Facebook are highly monopolistic and don't encourage a expressivity in having many, many, many clients, Farcaster does. And so it's putting clients as like, yo, we need clients. Clients need to be a first-class citizen because there's many different ways to access the Farcaster protocol. And each client can pick and choose their own particular way of accessing the Farcaster protocol, and those different choices will be determined by the users of that particular

client. But it's really like Farcaster winning, like a thumbware in like protocol design, whereas like in theory there could be a Farcaster protocol. And then there could be like the Facebook of Farcaster and the Twitter of Farcaster. These things can become apps. And the fact that Farcaster is a protocol is like you could have the Twitter app that is built on top of the Farcaster protocol. So yes, Ryan, you're right when it's there's like protocol centric. But the idea of a Cambrian explosion of specific clients that are built for specific purposes for specific audiences is what's missing from the Web2 world that makes it so like stagnant and stale and monopolistic.

Dan, does all of this stuff check out? Yeah, and maybe to marry the two together, I would say it's the protocol is only good, as good as the clients that are available for it, right? Because you could have technically brilliant protocol, but if there's no way for people to use it and use it like in a really highly usable way that they can install on their home screen, right, because it is actually a battle for your thumbs. Are you going to hit Instagram or Twitter, or you're going to hit Farcaster or some other app that's built on top of it? That's zero-sum. Social, like, time is a zero-sum thing, and that's what you're competing for in social. And so

in order to make the protocol useful, you need at least one client, right? And one client that's hopefully driven a whole bunch of users. It's kind of a flywheel, right? So it's now you've actually bootstrapped it with some users. Now the protocol starts to be more attractive for other people to build clients and then hopefully it kind of ping pongs back and forth there, whereas the more clients and more diversity of clients and different experiences you have, the more growth you're going to have for the protocol. The more growth with the protocol, the more people are interested in building clients. And so I think that is where we have been really, really focused. And what might differentiate us from others is we plan to work on our client like this initial bootstrapping

client for a very long time, if not forever. Because I think for us, it forces us to dog food the protocol that we're expecting other people to build on. And so it's inevitably, we are going to know the pain points and the frustrations as a developer. It's like, wow, this is really hard. If we can't do it ourselves or this is a pain they ask for us to do, why would we expect anyone else to go through this? They're just probably going to go build somewhere else. And so by being kind of like putting ourselves as a developer on the protocol, it makes the protocol better because we're developing the protocol. But it also going back to what makes the protocol successful, it's getting users to use the protocol who become addressable users for other apps on

of protocol. So that's where I think the client and protocol aspects of the designer are critical and they're very intertwined. I think Web2 users, which I know is everyone, can really resonate with this like fixed state of the Web2 world. Like, why hasn't there been like a new Web2 app that's come out in the last like decade? We almost had Clubhouse. Clubhouse took us by storm in the middle of COVID. Like we almost had a new one. But then what happened? Like Twitter just absorbed that feature into their monopoly of Twitter and took away that like, Dan, you've been calling these, like, this cool new mechanism that it justifies like a new, like social media app. But then all of these like web two companies just like absorb those

features into like their like larger centralized stack. And I think one of the things that you alluded to is that as the Farcaster protocol grows in users and utility, when somebody triggered, like thinks up of a new mechanism like Clubhouse did, that can be appended to the Farcaster protocol via a client, but not actually have to compete with the other clients on Forecaster because everyone is contributing to the growth of this protocol. And so it's a little bit like how I view the Ethereum layer two ecosystem. Like when optimism wins and grows users in TVL, their net overflow of that also benefits all the other layer twos on Ethereum. So like that's net beneficial to Arbitrum because when optimism finds a new user, like they're just one hop away from Arbitrum. And that's just

not true in the Web 2 world. When Facebook finds a new user, it comes out of the detriment of Twitter. But I see this festival of the commons of Farcaster is when somebody triggers, invents like some cool new mechanism that's brand new. That can become an app on top of the Farcaster protocol and actually grow the utility of the protocol at large. And hopefully that is what unlocks a brand new like Cambrian explosion of cool new social features that exist on the internet. Is that what you see? Yeah, and going back to, I would give TikTok is probably the one counter example to the last 10 years and maybe snap if you want to go back that far, but very few, right? I think the way to think about client competition on something like Farcaster, so, you know, someone comes up with the clubhouse equivalent on Farcaster. And we have this initial client and has a lot of users.

And so if we try to do the same thing that Twitter did with Spaces, right, the advantage Twitter had with Spaces is not Spaces was a better product. Spaces had more distribution, right? So if you do a spaces for bankless versus a clubhouse for bankless, you already have a huge audience on Twitter, right? And so I can guarantee you, if YouTube did a Spaces product, or I guess do they have it, it's like YouTube Live, but something equivalent, it would also be really popular because there's a lot of existing users and distribution. And I think what's key with Farcaster is if someone goes in clones, you know, one of the bigger apps on the ecosystem clones the kind of up and coming, the one who innovated, they have to continue to keep pace because the distribution is actually put at the protocol. level. So now as a user, if I actually want to listen to the equivalent of a like, you know, audio room that is at the farcaster protocol level, I can actually choose the best client rather than have to say, oh, do I want to choose the distribution or the feature set? And so you can actually

get both where the client that you opt into has the feature set, but you can still have access to the entire social graph and in distribution. And so going back to this idea of monopolistic tendencies, it forces clients to actually have to be extremely responsive to users because otherwise someone's going to get their attention, right? And so from our standpoint, look, we have 99% market share today because we're the initial client. There are a whole bunch of other clients being built right now, and as we build the ecosystem out and make it easy for users to actually move between clients, I consider it a huge success if we only end up having 10 or 20% share, assuming we've grown the FARCaster protocol because that to me is the success of the protocol. And then we're going to end up

with a better ecosystem because these apps are going to be competing on feature set, not distribution and like proprietary locket, where I think that that's where we've gotten a lot of the reason things are so stagnant, right? Instagram had this whole controversy recently where they're adding more videos to compete with TikTok. And you had a whole bunch of users, a lot of high profile users even being like, we don't like this. Like we want to have it be more like the traditional Instagram where it's photos or stories. And the beauty of a system like Farcaster is if the equivalent of Instagram is built on Farcaster

and has a massive audience, assuming it's on the protocol, you can actually go build the traditional Instagram client, which actually someone did. And what did Instagram do, they sued them for access to the API and then got them kicked out of the app store. Whereas in this system, it'll be like, oh, this is a better client. I'm going to go shift over there.

And two examples like this exist in the Web One world. So the first is browsers. Netscape starts, it Internet Explorer crushes them through a variety of underhanded tactics through bundling. And then what happens is Firefox comes out. And Firefox, without any huge budget or anything, wins a massive amount of market share on the merit of just being a better browser. And the beauty of the web is, you know, there was no lock-in of IE for the most part. And then Google comes along and says, well, we're going to build a better browser than, you know, Firefox and got a lot of share.

Whereas now with these mobile app stores, essentially Apple and Google can actually force and actually more Apple than Google, because I think Android's a little bit more open here. Apple basically can say we're the only the browser on iOS. Like Chrome is like basically this wrapper on top of some APIs, but they don't get like full system access. And then a second one is superhuman can come along and just be like, we are literally giving you the same effective set of data that exists on Gmail. But we're going to build a product that's so productive for the people who are excited about that. And we're going to charge $30 a month or whatever they charge. And they can go do that because email by definition is kind of this permissionless thing where I can actually move my data between different clients. And so that's what we want to get to with Fargaster, where the best clients,

the biggest clients are winning on the merits of their features, not some lock-in that they then can kind of extract, right? Like the classic example I always use with Web 2, that's not even social, is Airbnb's cleaning fees. They're able to do that because it's like they've built this huge marketplace and brand, and most consumers aren't going to go try to go find the other things that exist out there. And so then they can kind of just keep turning the dial and not having to really respond to the market versus if you imagine that as a protocol, right, like the ability to have,

the inventory as a protocol and then the trust and safety, which is actually the hard thing to go do. But if you can actually get that to a protocol, and I didn't even thought about how you'd actually go do that. But imagine if that was more of a protocol, then you'd have the best clients all competing on it, right? And that's actually in some ways, if you think about flights, a much better example where you used to have Hitmunk and Expedia and Kayak and Google flights. People can actually compete on that data set. And that's not even a protocol. It's just like having open access to data, you win on the merits of how functional the software you're building is, not some proprietary locking. So this all makes sense. But here's the question I'm trying to understand in my mind,

Dan. So why? Let's go back to incentives. Twitter certainly could have in the early days of Twitter not shut off its API. It could have been a bit more standard-centric and protocol-centric in its design. Sure, it didn't have crypto, but it could have adopted for some kind of open standards. It could have made itself more rugless. But the reason they didn't is because they had, back to David's point earlier, they had venture capitalists, investors to please. And the model, the monetization model for social is ads. And so it was a good business decision to then pick up the ladder and pull it up so that no one could kind of come behind them. They had no incentive to create this protocol behind them and to let competitors out innovate them because they were

incented towards an advertising model in order to maximize the ROI for their investors. We understand this. This is kind of capitalism. And I can imagine FARCaster is not using sort of a Wikipedia model where it's purely like grants funded. That's the other example of how we've created kind of public goods on the internet. So can you tell me about the kind of the incentive mechanism? I mean, you've been talking about how you're very excited to propagate the FARCaster protocol and not just the FARCaster client. But then what further incentive do you have to continue building that protocol, I suppose? Or like, don't you want to be the most dominant client in the space? Are you planning to monetize this with ads? This is the part I don't understand is how do investors

in something like Farcaster maintain alignment? How do you yourself, your team maintain alignment? You were talking about, I would love to develop our client forever, like for as long as I can. Why? What is the monetization? What is the incentive mechanism here that keeps you aligned with the public good and the good of the protocol? Does my question, even makes sense? Yeah, it makes a total amount of sense. And I think that the answer is, one, I can give you the most glib or whatever crafted answer. And this is something that is only earned through actions over a sustained period of time that people actually believe that I do care about the protocol or Verroon and I, you know, care about making the protocol successful and

not just our company is called Merkel manufacturing. So making Merkel successful. And so the way we approached it is, one, Verun and I both worked at Quentin. And I both worked at So we had some economic success coming out of Coinbase. And when we sat down to kind of like work on potential ideas, we were both aligned on wanting to work on something for 10 plus years and actually have it be meaningful and great to the point where we could look back when we were 80 and say, I'm really proud that I worked on that. There were a resilient other companies we could have gone and worked on that are kind of like very nuts and bolt SaaS companies in crypto and probably could have grown it faster and gotten to revenue faster or whatever. We just didn't opt for that. We wanted to work on. something for 10 plus years that we wanted people to actually kind of say, that's stupid that you're working on that. Like, it's never going to work. Because I think when you have long time horizons, you can actually accomplish great things. The second thing is we bootstrap the company for the first year and a half. Not because of lack of investor interest is that we actually wanted to build the initial version of Farcaster and how we wanted to build it in the way we wanted

to, because again, we're aligned on the long term here. When we did raise money last year, because one, we thought being able to scale the team a little bit more than we had originally plan would benefit the protocol. But two, I got a sense having been through multiple crypto winters at Coinbase that we were headed into a down market. So we started fundraising end of April, early May of last year, right before things imploded. So we got lucky in the time. But one of the things is we said to all the investors that we brought on board is we're optimizing for the protocol long term. And Verun and I have, you know, kind of voting control of the company. So like basically, we're in the driver's seat around we can build the company the way

we want to do it. And our view, going back to that kind of analogy, is today we have 99% market share or 95, whatever version of that high number you want to pick. But we have 8,000 people in a beta. The goal here is to get to 100 million, a billion people on Farcaster. And if we have 10% in those two cases, you have 10 million or 100 million users, like, that is going to be great. And so I think that you have to earn the trust of the developer community within the Farcaster ecosystem. That I think will be majorly earned. when we'd release hubs because then people will actually start to believe, like, wait a second, like I have the same playing field access to the data and APIs that Merkel does with the amount of money that they raised, the fact that they were the first in the ecosystem, they have the most users. And it seems like Merkel is taking their limited resources in terms of time and staff and building out features to make it easy for an app developer to install, you can easily install a new Farcaster app and actually letting people export to a new client.

And so upholding that standard. but I don't think that there's any deterministic way for anyone to believe that other than if we've been working on it for three, four years, and we've consistently made, not perfect, but consistently made the right long-term decisions around optimizing for the protocol. That's the best answer I can give you is, like, I believe it, and I want to show the world that I do. But until we hit a sufficient scale and hubs exist,

I think it's completely reasonable for anyone to be skeptical. Dan, is it required that a protocol have a token for this? to succeed. You know, we've used some analogs of the Ethereum Foundation, for example, right? And basically, if I were to kind of sum up the Ethereum Foundation and what's done, it's bootstrapped, it's R&D development based on the value of ETH, the token. And at some point, the idea is that ETH maybe ossifies in some way. And actually ossify is not the right term. David, what was the other term we were batting around? Homostasis is homeostatic. It goes into homeostasis, where there's less development, ongoing development needed. And so kind of the Ethereum Founding

is almost no longer needed as sort of a shepherd and kind of fades into the background, but they've used the token price to kind of stay aligned with the rest of the ecosystem. So, you know, arbitrament optimism, layer two is anyone in D5 because they have kind of that alignment in the token? Is a token needed in order to align parties for something like a decentralized social network? Or what do you think of that? So the way I think about it is the protocol going back to your idea of like how do you bootstrap R&D and continue to have a strong protocol that's independent, protocol on these a source of revenue. And so the way we are going to actually test this is once we move to

main net, we are actually going to have two types of Farcaster accounts. There's an account that you can kind of register. Think of it as like you get a numerical ID and you own that forever. It's gas only one time. So you could do that once and then you have a Farcaster account forever. But we think that most people who are engaged on Farcaster are going to actually be willing to pay some amount of money. We're going to test it at roughly $10 a year worth of Ethereum directly to a contract that is kind of like a protocol treasury contract. And if we're right about that hypothesis, could be wrong.

But if we're right, then the protocol is actually going to have a sustainable yearly revenue source into perpetuity. That's something that email doesn't have or DNS or any of these other things that were kind of more academic and then got captured by a lot of the large internet companies.

And so by having a revenue source of the protocol, now the protocol can actually start to hire its own team and actually get outside of like whether Merkel manufacturer or other big companies in the space are actively contributing the protocol. Like, we still want to, but, like, I want to get to a place where the protocol can actually really be independent. And then at that point, I think it's worth figuring out, depending on how many users you have

and how engaged people are, is how do you actually decentralize the core governance of that strategy away from the initial team. And so I have, like, kind of this very pragmatic, give myself credit on the pragmatism. I'm rooted in pragmatism most of the time. And my view is, if we focus on the decentralization of the governance too early, we're going spend way more time talking about what the systems and processes should be versus actually making progress. And the thing that matters is like we need to have a million or 10 million people who've signed up for this thing and proving people are willing to pay for the protocol and all this

other stuff before we can worry about getting to those other things. You never want to lead with Dow Governance. That's a disaster. Right. You're just going to move slower. And so for our, like there's a term in in open source software development, which is not what we want to do, a benevolent dictator for life. That's what Linus Torvales is. I think ours is benevolent dictator until product market fit and then actually turn it over to the protocol. And look, some people will say, oh, well, what's your incentive? You're going to get there and you're going to want to, you know, hold on to control. Keep it for yourself.

Yeah, that would be the big corner response to that. But the reality is, if I wanted to do control, why would I be spending all this time on the protocol stuff? Like, I could be moving way faster. 80% of my engineering versus on the team right now are spent on the protocol. This is the thing. I don't have to convince everyone on this. All I'd have to convince are an increasing number, small but steady group of people who are

like buying into the vibe on Farcaster, and that's fine. Because if we can continue to show that we can grow it, we will get more and more permissionless over time. And I'm fine with that. And so I'm not walking around saying Farcasters, permissionless and all this stuff. That is aspirational at this point. But when we hit that bar, I'll be very happy to kind of pound my chest and say, hey, we've hit these milestones.

And we do have actually a lot of decentralization. And it is rugless. But until then, it's more aspirational. And it's like we're actively investing resources in it. But I don't think it's intellectually honest for anyone. and just be claiming that if you haven't actually hit the threshold yet. No, that's cool. That's pretty grounded. Yeah, that was kind of the root of my question, right? Because what you're looking for if you're doing a protocol is sort of a public sector and a private sector, right?

And both need to be funded. And if we think about kind of, you know, governments, everyone's familiar with, obviously, their nation state, and they're familiar with taxes and then they're familiar with businesses. And so what you're saying is basically the FARCaster protocol could be configured in such a way that it has some sort of lightweight tax type system to pay for the public goods, which is maybe when you register your name or something. It's like, you know, $10 in ETH per year. And this goes into a fund. And if you multiply that by large number of users, then you actually have a pretty good tax base in order to fund the public goods, the roads and the hospitals, of course, not those things literally in this case, but the public goods that everyone will share. Now, what you haven't figured out, which, to be fair, no one in crypto has figured this out is how to actually govern that treasury and make sure

that it's managed effectively. Of course, like, you know, the nation state, quite famously have large bureaucracies that sort of kind of do this work. Maybe crypto will develop something around that, though. That's kind of the hope. I mean, we are working on these get coin type governance, quadratic voting types of things and something might come along. But that was the root of my question. So in a fully realized farcaster, you have this public sector, but then you have this private sector of all of these various clients that are creating businesses based on the public infrastructure and are competing with one another in a way, but they're also contributing towards the network effect of the protocol, and even they're contributing tax revenue to the

protocol to the extent they're able to onboard users. That seems to me like a pretty grounded approach and does not necessarily require a token at the base layer, although maybe that's a design strategy as well when you think about governance. Very helpful. Thank you. Yeah, and I think in some ways it's an improvement on Web 1, which you always have to be careful about because, like, obviously, web 1 has been incredibly successful. But I do think if you think about whether it's, I don't know, HDP, DNS, SMTP, the fact that those protocols don't have a built-in revenue source, despite billions of people using them. You have to run them as nonprofits that don't have any funding whatsoever, basically. Or get funding from the big Internet companies who then get to decide what

the standards are and what we want to work on and things like that. 100%. Right. And so like a good example of like web off end, which is like this new like touchless way of signing into things. They don't allow like arbitrary signing of like ECDSA curves or whatever. Like if you wanted to actually get that done, it's this incredibly bureaucratic process run by, you know, kind of middle management at like the biggest browser manufacturers. And in a world where governance is a little bit more decentralized and like there is actually a revenue source directly to the protocol, One, the protocol hopefully is independent so that it can actually make its own decisions what's best for the protocol.

But more importantly, if you actually get to a good solution for decentralized governance, if you want to have more influence there, you're going to figure out, okay, this is the path to actually doing that versus this kind of opaque, big company. Like the fact that Microsoft, Apple and Google can kind of get together and be like, maybe we won't add this feature to the web browsers. And people will be like, oh, that's this conspiracy theory. And then it turned out, like, when Steve Jobs was around, they weren't recruiting engineers from each other because, like, big companies do that. So I think, call me naive, but I do think having these public goods have a funding source is a improvement over the status quo. Actually, I agree. So long as we can govern them effectively in an, you know, uncorruptible way. I guess just last piece here, then back to kind of the business model for a second. So remember that public, private kind of relationship we just described.

and the clients themselves would be the private sector here. And I suppose you would be open to all sorts of new models in the client side that Web3 enables. So back to my early example of Twitter, the only model, the only way for them to appease their shareholders and make money and return value to the investors, which is necessary, by the way. Let's not live in a naive world where investors invest in things without expectation of maximizing their upside. But you could have things that aren't maybe add revenue funded, for example, in the clients. So NFTs, like a client, you can imagine a FARCaster, maybe you'll get some kind of transaction fee type revenue for the amount of posts or the amount of NFTs that are sold inside of the client. Or maybe there's some other token funding apparatus that is more Web3 native and less eyeball-centric. We make money based on the number of eyeballs we get in this system. So I guess that private sector is even more diverse than the Web3 social, which just like depends on. attention as the currency, depends on advertising as the sponsor of everything, where all users become the product. Yeah, so I fully expect there to be clients in the VARCASA

ecosystem that use advertising. It's the reveal preference of billions of consumers. They like free and they're willing to have their attention taken by an ad. I don't think all ads are bad either. But I think what we're planning to do with our client, so I can speak to that, is we're going to have a freemium model. So we're going to actually have subscriptions. And our strategy is to keep our team extremely small, like from a core team. So our general expenses are going to be pretty low. And we think that within a reasonable number of years in terms of growth, if we continue to grow 5% every week, we will get to a place where we're break-even or profitable based

on some percentage of users willing to subscribe for the kind of like pro subscription. And I think subscriptions in 2022 are much more normalized for consumers. to say, hey, I'm actually spending a lot of time in this app. I'm willing to subscribe a few dollars a month to the more kind of like premium version of that. And so that's something we're going to test. I think you spot on in that if your feed has a bunch of stuff that's happening on chain, there's a natural economic model with that. And one example I always bring up, a lot of people don't realize.

Apple gets paid $20 billion a year by Google for the default search placement in Safari on a lot. iOS. Do you say $20 billion? $20 billion. And that's got to be pretty profitable revenue there. It's their highest profit margin line of business. There's no cost. It's literally, it's just, you know, you can either be duck, duck, go, Bing, or Google and Google pays $20 billion to be, because you can change it. It's not like it's like the only option. And so that, that's an amazing model when you have some amount of scale, right? Like, you know, obviously Apple has a lot of scale. But Firefox's entire budget, basically, is just the fact that they have the user base that they do and Google pays to be the default little search bar in Firefox. And now you realize why Chrome is so valuable because they

don't have to pay themselves that. But in our case, we have the NFTs. You can imagine our client saying, okay, what's the default? If you click on a link in an NFT, where is it going? And now you potentially have different marketplaces being willing to bid on that. Or if you mention a cryptocurrency, it's like where you're going to trade it. And so I think the idea space for this kind of like transaction-based commerce is something that was frankly, and maybe Elon fixes this with Twitter. I don't want to count them out. But Twitter is this kind of like feed of information and the ability for you to like tap in two things and then buy a recommended, you know, someone tweets a link to the wirecutter. Like, why isn't there a deal where you're surfacing that product review right in the feed?

Not oppressively. It's like, I'm interested in this click. It opens up and then I can actually do the commerce right there. I think that there's just a whole idea space that can happen there. And then the beauty is people are inventing new things in crypto all the time that are going to have natural built-in economic models. And so what I would like to get to is a place where basically we never have to have ads because we figured out other ways to monetize and also kept our cost structure really lean. But even at that

case, you can imagine maybe when we have 10 million or 100 million people, there's a tier of user that's like, hey, I actually just want the bare bones completely free and then maybe you're showing them some simple ad. But by no means are we interested in doing that in the near term? And here's the beauty of the

protocol. If that's the wrong decision, some other app is going to come along, offer all the They're going to offer an ad-based client and the reveal preference of users will that they'll use it. And then we'll have to confront and potentially change that. So I think that that is a world that I want to live in where we can run these experiments and let the market decide rather than, you know, you make a decision 14 years ago. And actually I think with Twitter now that they're not public and they're owned by one person, they're actually having an opportunity to rethink that business model. And if you were to ask me, what is a Twitter that is not owned by Elon today? it's they made the bold decision early on that they weren't going to monetize like Facebook.

And instead they were going to say, hey, we're going to monetize better than any online newspaper, right? Because we know these people who are really into Twitter, probably willing to pay $20, $30 a month. And maybe they didn't have 6,000 people. They had 1,200 people or whatever. But from first principles, I think you can get to a reasonable, profitable business with a subscription model that you don't even assume most people subscribe to. Like assuming you just are really, really efficient in terms of keeping your headcount lean. Dan, this has been such a great exploration into the world of the future of social media networks. And I'm pretty sure listeners or imaginations are probably running wild right now.

There's a few more conversations. I just want to quickly check the box of as we wrap this up. One is like what is the actual on chain footprint of this thing? It's on blockchain, correct? And I want to make sure that that gets communicated. But what are the actual crypto things that are about FARCaster? What is its footprint in the world of crypto? Yeah.

So you have two parts on chain. Today it's on Ethereum, Tessnet. It's on Gurley. And it's moving to Maynet. hopefully halfway through this year. And you sign up, you get a FID, a FARCaster ID, and it's just an incrementing number. So if you're the 10,000 user, that's your number.

That's largely abstracts away from people, but that's actually critical for the whole system to work. Then there's an optional $10 a year kind of like username, like kind of premium account, but effectively that those are the two primitives. That is also an NFT. So that can actually be permissions they put into anything in ERC721 works with.

OpenC, you can put it on, I don't know, pseudo-swap. You can use a party bid. Completely composable. So wait, my account is an NFT? Yes. I hope you got a good username there, David. Well, I hope I don't lose it. No, no, no, you won't lose it. We're any active user during the test net, we're going to migrate to our dime. But then it's $10 a year, just like it would be if you own a domain to pay, and you pay directly to the protocol. But yeah, like that, that is the core primitive on Ethereum, relatively simple set of smart contracts. But the core of the whole system is all mapped to that, right? So if I post something from DWR, which is my username, every time

that happens, there are servers that are effectively checking Ethereum to make sure that the public key, which is an Ethereum address, that matches the private key that signs that content, and it all just magically works. Cool. The other question I want to talk about is the world of content moderation and spam prevention. As someone who has been absolutely hounded by Twitter bots lately, how does spam prevention work in a decentralized network? Like, aren't you just opening yourself up to spam attacks? So one of the things, again, small team, and we're just trying to focus on what we think are the most important priorities first, is it's gated to sign up.

And we actually took inspiration from Facebook on this. Facebook's still the largest social network in the world. And for the first two and a half years, it was gated to. Dot edu email addresses. And our approach is we need to get hubs out. We need to get to Ethereum. And then the second half of this year, it's figure out how do you get to completely permissionless onboarding. Then I think you start to hit a bar where, okay, the protocol is actually permissionless.

But as a result of that, we haven't had any. spam issues for the most part because everyone right now has to come through my Twitter DM. And that's not sustainable long term. We're moving away from that. But I think that that's allowed us to keep the community small and incrementally grow rather than have it grow too fast. People kind of turn and then it feels like a ghost town. And I think the long term solution, and this is not fully big, so there's a little bit of

a punt here. But I think the high level answer is something like page rank, which powers Google, is as the social network develops and you've kind of had time for kind of the active users, you can actually start to map any given user on the network, how they interact with all the other users. And it gets very difficult for a spammy account to, you know, penetrate the core of the network in a way that if you basically get good on your kind of machine learning data science, you could potentially even publish that information so that any client out of the box can get actually decent spam filtering with the caveat that that client can choose, hey, I actually don't think this account

is spammy or whatever. So they can modulate how they want to approach content moderation. I also think that what's important is similar to email, which everyone uses content moderation in email, we just call it spam filtering. It's a client level decision versus the network level decision, which is relatively straightforward. The only thing you can store on Farcaster is text, like 320 character little tweet like things. And so the amount of stuff that you can actually put on there that is really bad from like an image standpoint and video content is relatively limited. That's it. You could still put some nasty stuff in 320 characters.

But inevitably, what you're going to have is you're going to have clients are going to do the same thing they would do with emails is they're going to say, okay, we're going to not allow hate speech or abuse or all this other stuff. But that will, again, be a client-level feature, which is how the internet works, right? It's like how the web works. Like Google doesn't have to index your webpage, but that doesn't mean your web page went offline. So even if it's full of deplorable stuff, Google just takes it out of the index.

You just get no distribution. And I think that that is the content moderation gets wrapped up in the fact that today, most of the platforms we're talking about from a content moderation standpoint, are doing the hosting. They have the identity for their given platform and the distribution. And so thus they have to do content moderation because then people are like, well, why are you hosting this video or why is that tweet still up? Where the reality is if you have a marketplace of clients, first of all, there's no single Omni algorithm, right? Like each client's going to have a different way that they're implementing that. And B, I think the average user does want some amount of content moderation, but like when we have a marketplace of ways of solving it, we call it spam filtering, right?

It's like focus on low quality versus this like, is this fundamentally something that should be posted or not? I don't think most people are that worried about like the fact that there are some really kooky websites out there on the internet. But if they don't have any distribution, it doesn't really matter. Who cares? Yeah. And that kind of just answers my next question, which was like discoveryability in the

algorithm, right? The reason why we bankless posts videos to YouTube is because the YouTube algorithm allows us to be discoverable. But I'm going to go ahead and guess that the future Web 3 protocol version of this is the same answer that it was for spam prevention. It's just like that is a vector upon which the clients compete upon. And discoverability and whose algorithm is best, whose algorithm is most enjoyable by people and makes them feel good, is probably something that the client layer competes upon. And it's also probably the way that FARCaster also becomes like compliant with, you know, nation state regulations is that clients are going to have to like make sure that no illicit activity is happening on them. But that doesn't, that's no longer responsibility of the protocol. Like the protocol is permissionless. But clients still got to make sure that the activity inside of the specific client is like not going to trigger the ire of regulators if it's like, you know, illicit trades or, you know, all the bad things that happen on the internet. That is still. something that the clients have to optimize for and work on that the protocol doesn't, leaving the protocol still like peer and permission lists. Yeah, it's very similar to Coinbase,

right? Like, Coinbase has to keep things clean on their end and they're subject to the laws and the countries they operate in. But the blockchain is a protocol and what happens on there, they have to take care of what interacts with them. And I think that that is the right approach because it works really well for the web and email. And I think we have the possibility, if we can achieve what we want to achieve with Farcaster for actually making the same for social. And I do think on the algorithm side, if you view that, like, let's say that there are five or 10 major apps

and they all have a slightly different algorithm, instead of hacking the algorithm, which is a lot of like what happens on these like monopolistic networks, you actually get to a place where the best content across a variety of different algorithms is probably actually what succeeds, right? Because it's hard to fake quality versus any one algorithm probably can be gameed, but it's harder to fake 10 at a time.

Dan, this could probably be, this question I'm about to ask you, it could probably be an entire podcast. So we don't want to do that. But it's one thing I just wanted to cover before we close here, and we're getting ready to. So we've been having on bank lists this conversation about identity. And the bankless thesis is phase one, we take back our money. Phase two, we take back our identity.

And social certainly has a role in Web 3 in phase two, I think. How does this fit with the social? story of identity. How does Farcaster kind of feed into that? We just had the folks from signing with Ethereum on the podcast. People can look at that in the archive, bankless listeners. In like maybe 45 seconds or so, could you help us answer that question? Does this play a role in decentralized identity in that story? I think it does. Look, you can today, and Battagic is a great example of this. You can have your own website, and that can kind of be the primary pointer to your identity internet. But the challenge is your website's going to have a very hard time,

in a very rare cases getting distribution. And I think more people will be willing to actually start with a sovereign identity, something that they really do control and can kind of instantiate their identity or display their identity in any way they want if they can associate it with distribution. And so I think with Farcaster or other kind of decentralized identity approaches, if you basically can have that be the pivot point, assuming that you can then get distribution for whatever you're trying to say or achieve in the world, I think that is the most promising path. because distribution is the thing that people care about, right?

It's the reason, as many of the people who are interested in decentralized social media and, you know, all the things that Farcaster represents that they still continue to use Twitter is because they already have large audiences there. And I can't fault them for it. Like, that's actually a hard thing to do is build an audience and distribution. And so if we can do our part in making it easier to have a decentralized way of connecting with a large group of people, then I think you'll start to get sovereign identity. This is great. Bankless listeners. Hope you enjoyed this conversation with Dan. He's building a decentralized social network protocol called Farcaster. Of course, it's one of a couple that we will be a few, I should say, that we're exploring on bankless. We certainly wish you well on your endeavors, Dan. This has been a fun conversation. Thank you for introing us to decentralized social media and also to Farcaster.

Thanks for having me. I'm happy to offer Bankless listeners a Farcaster account. Are you sure about that, sir? Because, you know, you're about to get a lot of DMs. That's a lot of people. We'll keep it to the Bankless Nation Discord. Well, how about this? The first 100 people who send me a message with the word in it, I'll put a little filter in my Twitter DM inbox. I'll know they have listened to the end of the podcast. What's the significance of the code name? I've been using American States as the key word for the day. So it's not over the top. But I don't know, I'm cold today,

so I'm thinking of warm weather. Dan, is it okay if we beep that word out and only have that go out on the premium fee? There you go. That's the benefit of the premium subscription. Cool. So we just beep the word out. So if you want to unlock that beep, go become a bankless premium member and we'll save Dan's DM so he doesn't hear from the full bankless community, just the premium member community. That's real proof of work. I guess that's probably not the right word on the podcast. Proof of listeners. Proof the sake. There you go. That's awesome. Well, we appreciate it, Dan. This has been a lot of fun. Thanks so much. Thanks for having me. Risk and disclaimers, guys, got to end with this, of course. Crypto is risky.

You could lose what you put in, but we're headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. First we take back our money, then we take back our identity. Thanks a lot.