Unchained - How Decentralized Social Network Farcaster Hopes to Eventually Get to One Billion Users - Ep. 607

Episode Date: February 13, 2024

Listen to the episode on Apple Podcasts, Spotify, Fountain, Overcast, Podcast Addict, Pocket Casts, Pandora, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform. In the two weeks since Farcaster introduced its Frames feature that allows developers to easily add mini apps to users’ posts, the decentralized social network has become the talk of Twitter, now X, and increased its user base by ten times, according to co-founder Dan Romero.  Romero joins Unchained to discuss why Frames has become so popular, the philosophy behind Farcaster and its client Warpcast, why the crypto component behind Farcaster is being kept to a minimum, how Apple’s new Vision Pro could lead to the creation of a 3D social network on Farcaster, how he and his fellow co-founder’s background at Coinbase helped shape their decisions about building Farcaster, and his vision for eventually getting Farcaster to a billion-plus users.  Show highlights: What Farcaster is and what problems it’s trying to solve How and why Farcaster uses blockchain technology in the background  How you can use ENS (Ethereum Name Services) for your handles on Farcaster How the recovery of accounts works on Farcaster and what the security implications are What Frames is and why it’s significant for developers and creators What’s controlled by the protocol vs. the client  What Dan imagines could be built with the new Apple Vision Pro Whether there’s potential for better economics and ways to monetize content in Farcaster Why Farcaster is on Optimism, an Ethereum Layer 2, and whether it could be moved to another network How they are working to build a more decentralized network What the future of Farcaster and Frames could look like How Dan’s background at Coinbase shaped the way in which he decided to build Farcaster What the strategy is for scaling the platform to the numbers more associated with Web2 social media Thank you to our sponsors! Popcorn Network Polkadot Guest: Dan Romero, Co-founder of Farcaster Coinbase’s Pragmatic Crypto Culture by Dan Romero Links Unchained:  Bounties to Build Frames on Farcaster Are Growing Rapidly Farcaster's User Base Skyrockets Nearly 500% After Frames Launch What Is SocialFi? A Beginner’s Guide The Chopping Block: Is Farcaster the Web3 Social Layer? Dan’s ideas for Farcaster Farcaster architecture Architecture Onchain password reset mechanism Why Farcaster Frames are important The layers of Farcaster Farcaster charges “rent” Learn more about your ad choices. Visit megaphone.fm/adchoices

I think the problem with Web2 Social, and especially Twitter historically, and whether you want to take the previous regime or the current regime, there's a bunch of people in San Francisco that basically decide what is allowed versus not. That's not how the Internet should work. The Internet should work in a much more decentralized way, which obviously the web does. Hi, everyone. Welcome to Unchained. You're a no-hyped resource for all things crypto. I'm your host, Laura Shin, author of The Cryptopians. I started covering crypto eight years ago, and as a senior editor of Forbes, was the first mainstream meter reporter to cover cryptocurrency full-time. This is the February 13th, 2024 episode of Unchained. Pocodot is a leading Layer Zero blockchain with over 2,000 developers, and the Pocodot 2.0 upgrade will be a massive accelerator for the ecosystem, making faster, more secure, and adaptable.

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If you have questions or concerns about your gambling or the gambling of someone close to you, please go to conicsonterio.ca. With Amex Platinum, almost every purchase made with your card can be covered with points, including new tastes, new fits, and virtually everything in between. That's the powerful backing of Amex. Conditions apply. Today's guest is Dan Romero, co-founder of Farcaster. Welcome, Dan.

Hi, thanks for having me. So Farcaster is the decentralized social app that has garnered the attention of the crypto world for the moment. Why don't you describe what it is and what problem it is that you're trying to solve with Farcaster? So like you mentioned, Farcaster is a decentralized social network. And the two problems we are trying to solve are, one, for developers allowing them the creativity and freedom to build new apps and services on top

of a social graph where there's no kind of third party that can come in and rug them from an API standpoint. And some of you listening this podcast may remember Facebook used to have an app platform and Twitter had a very open API that is no longer the case. With Farcaster, our goal is to make that impossible to happen in terms of how we've built it from an architecture standpoint. The second problem is for creators or people trying to build an audience, allowing those folks to have a direct relationship with their audience. And similar to developers, not have a third party who can come in and kind of rug that connection either. And I think a very simple example here is if you spend a lot of time building an audience on a Web 2 social network like YouTube or Twitter,

overnight, you can lose that audience. And there's no recourse. You have no ability to take them to court to get your audience back. You can't export it. It's just gone. Contrast to something like email, right? If you have an email newsletter and you use a tool like substack or MailChim, you own that email list. And so I think with Farcaster, the design of the network is to allow anyone building an audience to have a direct relationship with that audience. And that is a relationship actually. I used to say own your audience, but actually you don't because the audience is the one that chooses to follow you. So it's a direct relationship rather than an own relationship. Yeah, and I love that framing because I, you know, as somebody who's kind of a creator, I do feel that I am sometimes at the whim of these platforms.

Something that also interests me is that I think before I did a deep dive on Farcaster, I had assumed that since you used to work at Coinbase and Farcaster was decentralized social, that Farcaster would be a lot more of a crypto app than it actually is. And now that I've done this research, I realize, oh, it actually kind of very minimally uses blockchain technology, mostly in the background, even in some sense, like, it's not incredibly decentralized. So I just wanted you to describe how it is that FARCaster uses blockchain technology and why you structured it to be so minimal in that regard. Yeah, so we took an approach, my co-founder and I both worked at Coinbase. And I think one thing that Coinbase has done really well over the course of its existence is make it really easy for new people to onboard to crypto. And in the case of Coinbase, it's to buy crypto as an asset and kind of maybe get started doing something on chain.

And so from our point of view, if the onboarding isn't as good as something like Coinbase or frankly, as good as a Web 2 social network and Instagram, a Twitter, TikTok, you're just going to have a really hard time growing the user base. Like, yes, you could go after a very technical crypto-native audience, but the size of that audience is still pretty small. And I think the thing with social networks and our aspiration for Farcaster is one day we'd love to have a billion plus people using the protocol. And in order for that to happen, you know, a billion people, that's more people than own crypto today. You need to have a really easy onboarding. And so I think in kind of starting from first principles with that goal, you cannot make an assumption that the user's

signing up has a crypto, has ever used crypto. And so I think we've taken an approach where we said, we have to make sure all of this happens in the background. And we've spent a lot of time working on it for three years, working on our onboarding flow to make it feel as web two as possible, while still underneath having the kind of composability and freedom that actually being on a kind of permissionless open blockchain enables. And so, The specific item that actually gets stored on chain is essentially your registration record. So when you sign up, a forecaster, you just get a ticket number in terms of like, okay, your user 1,279,334.

And the next person is just one more increment up. And so that gets stored on a blockchain. It's on OP MayNet, which is an L2 for Ethereum. So ultimately, the security of the social network is provided by Ethereum. the registration number, that user ID, we call it an FID, a forecaster ID, gets mapped to a crypto wallet. So, you know, kind of a public key in Ethereum address. And then you, the user, this happens behind the scenes, get a private key, the kind of thing that allows you to prove that you are the user ID. And so through the magic of cryptography, you can basically do everything on this social network in an off-chain way.

So we have a series of servers around the world that people are running, somewhere on the order of about 500, called Farcaster hubs, that you can kind of almost think of like, if you, maybe this is dating me, BitTorrent, where it's kind of like a kind of share group of servers that kind of get to consensus on what the data should look like. But it's not a blockchain. Okay. And so the magic of what happens on Farcaster is when you type something into the app feels like Twitter, you type Hello World. What's actually happening is it, It's flying out of your phone into the cloud, but it's been signed by the private key that actually lives on your device. And that is a core part of just making the whole thing work. And so when then that message, we call it a cast, ends up on this network of servers called hubs. The hubs can verify that the cast came from the user that it claims to be from. So a cast from Laura Shin needs to be signed by a specific.

private key, which then the hub can just, you know, this is a computer, so it's not actually thinking. It's just taking the message. It looks at the signature and then it says, okay, go to the blockchain, check to see if, you know, Laura Shin actually maps to that key, like that signature, and you can use the public key, and it works. And so it just does that over and over and over and over. But the beauty of that system is twofold. One, once you sign up, obviously that has cost because you're using a blockchain, there is no additional cost to using the system. And so you don't have any of these kind of, oh, reconnect your wallet, like you're out of gas, you need more crypto. It's kind of, I like to describe it as like an all you can eat buffet.

Like you pay the fee up front. And then once you're in, you can do as much as you want. But, you know, the reason to have that identity on the blockchain is actually pretty critical. It means that you, the user, are the only one in the world that can adjust the identity and the record on, on, the network. And so we've designed a system where the core team, the, you know, the farcaster core team, we can't muck with your your identity on the network. So it's, it's not possible, going back to this idea of solving that for creators, we can't come in and kind of snip a connection between, you know, user X and user Y because the fundamental identity primitive that the whole

network works for the social graph is user controlled on a blockchain. And so that is, in my view, I have a lot of critics I've heard that, you know, like you don't need to use a blockchain to build a social network. And my pushback is give me an architecture that doesn't use a blockchain that fundamentally allows every user to have sovereign control over their identity. It doesn't exist. So if you take any of the other examples of, you know, kind of federated or decentralized social networks that have popped up that don't use blockchains, ultimately there is a server somewhere that, in individual company, country can come in unplug and you lose access to your identity. So the beauty of a blockchain is that you're getting this decentralized system that is always going to be running and there's obviously cost to that. But that creates that really powerful primitive that every user is in control of their own

identity, which then allows them to obviously have a direct relationship with an app or service like the developer use case I was mentioning, as well as a creator or someone you want to follow from an audience standpoint. So this is so interesting because you tweeted and probably also casted that users who saw that their identity was being used by, like if they had a brand or whatever that was being used by somebody else in a forecaster, that they could fill out a form. And so I wondered, you know, I actually filled it out for Unchained. I didn't know how you guys are going to address that. Yeah. So to get a little bit more technical, the username space.

So that is actually still managed. But the way the social graph, the distribution, the thing that you care about as a creator, so that when you type a message it goes out to all the people who want to find you, that's just underneath the hood is just actually going out to a bunch of identity numbers, farcaster identity. So the thing that's actually truly decentralized is the farcaster identity, the thing that makes the whole system work. And then you can think of the username that we use in the app as kind of more of a cosmetic thing.

And so what we've actually done, and this is, again, a little bit more biased towards crypto-native and power users is, well, if you centralize the namespace to start, then the system doesn't feel quite decentralized. So we actually offer an alternative. And I actually use those. So you can opt to instead of using the centralized names, we call them F-names, sparkaster names, that we can go revoke if you're squatting a brand right now or any of that. You can use ENS, right?

So ENS, most popular naming system by far. it is decentralized and user controlled. And so if you own, you know, lorashin.eath, you can also go and use that name interchangeably with the kind of like simple free name system that we give. And this is a great example of one of the tradeoffs we kind of are willing to make is if you talk to kind of the ideological decentralization maxis,

they'd just say, just use the NS. Like, you know, that system already exists. It's decentralized. why provide any other name that's confusing. But the reality is most users don't have crypto. They don't have a wallet and they don't have an ENS. And so if you were to say to sign up for a social app, the first thing you need to do is download Metamask,

then get a Coinbase account, then register an ENS on L1 with Gaspis. Then you can go back to a social app. No one's going to sign up. They're going to go back to TikTok. And so we've kind of made the system really simple to onboard with tradeoffs. But fundamentally, we also believe. believe in the decentralization and the belief of a protocol that users should have control. And so we've offered kind of power users the ability to use ENS, which is what I use.

And so that's an example of I think sometimes some of the marketing is I'm trying to market Farcaster as a user experience standpoint of it being as easy and simple as Web 2, right, with the kind of configurability and freedom that comes with crypto and Web 3. And I've said this before, but, you know, it's kind of a cheeky phrase, but barcasters is very much a mullet, right? So business in the front party in the back, right? Like Web 2 in the front, Web 3 in the back. And I think that is the approach we believe is the winning approach long term to getting a billion plus people onboarded to a social network that behind the scenes is actually decentralized and gives freedom for both developers and creators to have direct relationships with their customers and audience. Oh, okay. This now makes a lot more sense and makes me realize I probably need to refill out the form because then I would connect it to Unchained.eath rather than Laurishin.eath, which should be connected to my at Laura Shin, which maybe I will do that. Okay.

But that's actually a great example. So the confusion that even happens there, that all needs to go away. Like we need to, like we need to hit a bar that is just so simple and easy to use that it's just intuitive. And I think that's always the challenge. when building in crypto is you have all these really smart people who can build these very sophisticated systems that for crypto natives, they know and love. But you work in crypto and this is not even intuitive. And there's nothing to do with you as much as our product needs to be better. Instagram doesn't have this problem, right? Like Instagram is able to build a product that is just so obvious for most people. And so that's the bar that we need to hit. We're not trying to win an award for being the best designed crypto app. Like we want to actually be on parity with. web 2. That's the only way we're going to be able to move forward.

Okay. And then, yeah, even for things like if you lose your phone, I guess, it would still be in the cloud. So then when you get your new phone, then it would still allow you to open your Farcaster. Well, it's, again, so the system is actually user-controlled. So we, when you sign up for Farcaster, that private key stays on your device. If it goes into the cloud, the state of New York thinks we're a financial custodian. So we, like, actually can't go do that. And so what we've done, again, focusing on onboarding the last three years, is we use something called pass keys on iPhones, which you may have seen. It's kind of this way that Apple stores your password securely on your phone and use your kind of face ID to unlock that. So that's a first

layer of defense. So, you know, most people have iCloud turned on. It'll just automatically save there. And that that's going to cover, call it 88 to 90% to people. That's still 15% to 10% that are going to lose their phone, they drop it off a boat. I don't know. The number of stories that I've heard about people losing their seed phrase is pretty wild.

Now, in the case of Farcaster, no one is storing any money there, so it was lower stakes. But still, people would be like, oh, yeah, like, and these are sophisticated crypto people. It's just, I don't know what I did with the seed phrase.

So pass keys have improved that. But then we actually added a second system, which essentially allows for password reset with an on-chain primitive. And I won't get into the technical details here as much as this is something that we learned at Coinbase. It was so obvious once you saw it. But for most crypto people, they kind of approach it as everyone is going to be hardcore

and have a really sophisticated system for backing up their seed phrase. And that's how the future is going to be. Absolutely not. Like the average person wants password reset. So we worked really hard over the last three years to get to a place where it's opt-in. So most people choose to use it. but basically by default, if you, for whatever reason,

lost your phone that had the kind of way to log into Farcaster, our app Warpcast, which is kind of like, if you think about like Ethereum and Metamask, that's the same relationship between Farcaster and Warpcast. Warpcast has the ability to, with your permission, reset your kind of like on-chain password.

And so that's an example of some system that plays nicely within a decentralized system, but is a massive user. experience boost, because for the average, usually, they don't care that any of this is happening on chain. They just, I lost my phone. I want to get back into my farcaster account. How can I do that?

And so that's a lot of the focus we've had over the last couple of years is that basic blocking and tackling is a lot harder to do within these systems. But once you have it done, then you can finally say, okay, we have like basic functionality that obviously if you're building a Web2 network, this is trivial to go to do a password reset. But, you know, we have. Is that create a honeypot? Because people could then, hackers could just try to target Warpcast to reset a whole bunch of people's. Yes.

So it would be just like Coinbase. In our case, we have a pretty sophisticated system on how we do the recoveries. One of the reasons it's not instant is I actually am doing them. So like there's a way of kind of bringing the key online to actually sign to approve that. But yes, there is a centralization component of that. And I think, again, going back to this idea of like the more ideologically oriented person might say, hey, that doesn't seem very decentralized. And I think the more sophisticated person looking at that kind of goes, well, it is decentralized

because the actual fundamental network is decentralized. Any user is able to use any other app within the ecosystem trivially in the same way that I can take an Ethereum seed phrase and move it between MetaMask and Coinbase wallet or simultaneously use them. Barcaster is very similar to that. But I think reality has a bias towards centralization because centralization generally provides more convenience and better user experience. And that's what actually most people want.

And so I think it's important to have the sophistication to say, is the system technically decentralized? Does it actually work in a decentralized manner? If I choose to use an decentralized manner, does it work? Versus the practical realities of things is that the kind of reason absolutely absolutely and services on decentralized systems get big is they tend to offer really great user experience. There's no one forcing anyone to use Gmail, right?

Email is a decentralized protocol, but people choose to use Gmail because, you know, despite not actually innovating that much in the last, I don't know, five, 10 years, it's still the best email service for most people. And I think that's the important thing to realize. And so I think we have every aspiration to have the FARCaster protocol be as decentralized

as it could get. But I think it's also important to remember that consumers don't actually care. And what consumers care about is, does this offer, you know, a compelling user experience? Is this entertaining? Is it easy to use? And so sometimes I think we rub ideological maxis the wrong way. And I think we've been pretty clear from the beginning.

We have this term we use just kind of cheek, tongue-in-cheek to the Ethereum, sufficient decentralization characterization characterization by Hinman from the SEC. But we'd say this is sufficiently decentralized social network. is it reaches a bar where any sophisticated person looking at it in good faith would say, yes, this is technically decentralized. It will work totally fine. But I think from a user experience standpoint, the way to get to a billion plus people using this is you need to be as decentralized as necessary, but no more because actually in doing so, you're probably going to be hurting user experience. And so to go back to the other point, too, about how traditionally on social media people don't own their data,

So in the case of Farcaster, what is it that is like portable or that people actually own? And for a long time, they've talked about how in the future, using blockchain technology, you could have social media where people could, for instance, make certain parts of their data selectively private and sell it. So is any of that kind of in the works or part of the future or is that just a different thing? Yeah. So the way to think about it is it's similar to Twitter and that, you know, there are accounts on Twitter that are private, but for the most part, the way Twitter is played is it's completely out in the open.

And everything is open, right, in terms of who you follow, who follows you, what you like, what you engage with, what you reply to, your profile. And so that's today where a forecaster is structured. All of that information is available on any app within the ecosystem. And so we have Warpcast is our app that kind of the core team is building. There's another app that's quite popular called Supercast. I can simultaneously use both Warpcast and Supercast in the same way, like I mentioned before, you can use Metamask and Coinbase wallet for the same Ethereum address,

because the core data on the network, all of that public data, the profile, your content, your follow graph, that is all stored in public on Farcaster hubs, right, our equivalent of the network. So everything is portable. There are a few items on Warpcast today that aren't. will be portable kind of within the next year. So but practically the things that people actually care about is everything is already decentralized.

All right. So now let's talk about frames because this is the thing that's gotten Farcaster a lot of attention now. Hopefully, you know, people have kind of gleaned a little bit about that, but why don't you describe it in your own words? Yeah. So we've been building Farcaster for the last three years. And we've done an okay job of kind of getting the core part of the,

the network to be decentralized. And I think where the team has been focused the last three or four months, after we kind of went 100% permissionless, anyone can sign up. You don't have to use any, you know, Corpcast product, which is the kind of like default product for a lot of people, has just been focused on growing the network. Because our point of view is the only way, forecaster is successful for developers to want to build on it is if there are many, many people using some version of a forecaster app every day, right? So if defy is the TVL metric is the thing that people care about, a total

value locked for defy protocols, for a social protocol, the only thing to focus on, in my view, is daily active users, not monthly active users, not like, you know, how many people have signed up, it's how many people actually show up to the social network every day? Because that's the equivalent of liquidity in a defy protocol. It's how many people, whether you're a creator or developer, you can actually get in front of it and potentially, you know, either read your content or engage with your product. And so, you know, you've kind of been making progress, not super fast. And we, two weeks ago, we launched a kind of new type of post in the feed.

So you can think of if you haven't used Farcaster before, or in our case, our app Warpcast, feels very much like Twitter. You open it up and you kind of like, okay, I get, I get how this works. So if you think of a Twitter post, the basic post has text. You can add an image, video. And then there's one type of post on Twitter that is interactive, and it's a poll. So you can kind of, as the creator of the poll, you can kind of write the prompt, then choose the answers, put it out there. And then anyone who's following you can click and then see the results.

That's it. Twitter doesn't have any other interactive types of posts or tweets. And the other important thing is that Twitter decided how that interactivity works. works and you as a developer can't just like go add something to a Twitter feed. The most thing you can do is add a link, which Twitter has now nerfed from an algorithmic standpoint. If you're a creator, you know that. I definitely know. What we've done with Farcaster with this new product called Frames is we've allowed any developer

to add a mini app, an interactive post into a user's feed. and the user is able to interact with that post right from the app. They don't have to get kicked out to another app. They don't have to download another app. And the canvas is quite simple. It's an image up to four buttons and potentially one text box. That's it. So it's a very, very simple little widget that you can kind of stick into the feed.

But two things from that are really powerful. So one, any developer can create whatever they want within those kinds. constraints. And so we've had all this creativity over the last two weeks that, frankly, has blown us away in terms of, we were expecting people to like it, not to the level that they have in the sense that we've 10xed our user base, active user base within two weeks, which is pretty, pretty wild. It feels like Coinbase in 2017 for me in terms of crypto memories. But the other thing that's important is frames make it really easy for developers to get users and get distribution because you have the natural distribution of a post and a feed, but also things like

we call them recasts, but you can think of it as like a retweet, the virality of a post or that has a frame is unobstructed. We're not we're not nerfing links like Twitter does. And so basically, if you come up with an interesting frame, a little application in the app, you're going to get as much distribution as people are willing to give you. And so what we've seen is all these developers, especially ones who have been building in crypto during this past bear market, is that they've had more users use their app through a frame, right, this kind of like embeddable app within the feed in, you know, two weeks than they've had in the last couple of years on their website or their mobile app.

And so the distribution point for frames, I think, has really resonated with developers. And I think that has kicked off a bit of a flywheel where the excitement about building frames and the things that you can do with frames has brought a bunch of users, what I would call crypto Twitter, has gotten much more interested in Farcaster. And so that's kind of resulted in this nice benefit of we've had a massive influx of users, which naturally attracts more developers because now there are more people that they can get a frame in front of. And yeah, that's where we are. And I was talking with Jesse Walden, a variant and asked him, you know, what he was curious about.

And he was impressed kind of by the structure of frames and was curious how you scoped it down, like how you scoped the idea down. Because he sort of felt like it could have been just like a little bit too much. But this was like super simple. And he was impressed by that. Yeah. Look, credit to the team. I don't think it was like, you know, my brilliant idea to do it the way we did it. we had kind of had a general idea of like adding functionality to links basically in the feed.

And last year we did this for NFT links. So if you had shared a link from Zora or OpenC, which are kind of these NFT platforms on Farcaster last year, and there was a mintable NFT on the other side, we were smart enough to kind of detect that. And then we would append a little button at the bottom that just had mint. Whereas if you shared that same link on Twitter, it would just be your standard, show the image with maybe what URL is it's going to. There was no special functionality.

And so that was quite popular. But I think where we kind of made, I think, a breakthrough is figuring out how to keep it really simple from a developer experience standpoint. I think the take your idea and get it into a frame is on the order of like one to two hours for a decent developer. So the ability to kind of prototype something, get it out there, and immediately get feedback is pretty powerful. And so I think that was the breakthrough in terms of like making us want to go and launch it when we did.

Because I think the team had actually figured out a few clever ways to make it really, really easy to get up and running with us. Because I think so much of what makes building apps hard is just the overhead, right? Like you want to go build a mobile app. It's like, first of all, it's a pain to go get set up with Apple. then you need to actually have the skills to go do it, which requires a specific set of skills. Then you need to go test it. Then you need to get it through App Store approval.

And then you need to actually figure out how to get people to download it and use it, which is just not easy. Whereas with a frame, you have an idea, it's a very simple constraint canvas. You're able to kind of like quickly whip something up. It can actually just live as a website. You don't need it because it's meeting the user

in the mobile app they already have rather than having to be a separate mobile app. and yeah, and nothing to install, which I think is actually an important point, right? So if I'm already checking warpcast every day because I'm an active user of FARCaster, I can discover that frame, whereas trying to do that on Twitter, especially in a world where Twitter has said links are going to get nerfed from an algorithmic standpoint, distribution is just super hard for developers. One other question is, you know, since,

frames are specific to the Warpcast client, at least as far as I understand. No, no, they're part of the protocol. So other apps have actually implemented frames. Oh, okay. Honestly, I think I got that. In fact, actually, other protocols are now implementing frames. Some have tried to rename them, but basically now people are just, they're realizing it's like a Xerox or Kleenex.

Like, you just call it what it is. And so people are saying, yeah, we support frames in our, you know, our just centralized social network or messaging or things like that. It's that simple of a primitive that other people are kind of saying, like, wait a second. Like, I can actually just implement this in my thing. So, yeah. Oh, interesting.

Okay. By the way, I actually think I got the fact that I thought it was native to Warpcast. And I think one of the documents I saw, I'll try to find the link. Well, well, so maybe part of it is because the core team is developing Rorpcast, we tend to do things there first. Because you can think it as like we have a vertical integration in terms of when we launch something, we can dog food that function. that we're launching ourselves in the app. So there's a bit of a thing with Farcaster where Warpcast tends to launch things first, because while we're prototyping it at the protocol level, we just were ready to go.

And I think that's caused a little bit of grumbling from certain people of being like, oh, that's unfair. But I think our pushback is we're so small relative to Web 2 social networks. And if you actually ask developers what they care about, it's not, okay, you wait, for everybody else to implement and then we all launch together. What the developers all want in the ecosystem overwhelmingly is more users using Farcaster because it creates a bigger potential market for customers for their app. And so the team is kind of just biased towards speed.

It's like we have the implementation. We implement it at Workcast. We put the documentation out and we're on to the next thing. Okay. And then just to check earlier, like when you were talking about how Twitter deprioritizes links, and at the moment, or not at the moment, but probably forever, forecaster won't. Is that, like, algorithm determined at the client level or at the farcaster, like the protocol level? So every client has its own algorithm or algorithms if they choose to have multiple.

In the same way that I think email services don't have a global spam list. Like, they have their own spam filters. Obviously, there's information sharing between large email providers, but for the most part, each service is expected to implement their own algorithms, their own spam classifications. And we think that that's good for the network, right? Algorithmic diversity is actually a huge bonus if you can actually get a social network like Farcaster to scale because then you, I think so much of the concernation that

happens around censorship on Web2 social platforms is a result of the true. vertical integration and centralization of the following things. Your identity, your social graph, where your content is actually stored, how it's distributed, specifically through the algorithm. And the fact that there's no diversity there, it's basically one company makes the decision on all of those things, creates a lot of the issues that come up as a result of like, oh, should this content be served on this platform? Well, very simple example with Farkaster, we have the protocol and then we have warpcast. Warpcast is a U.S.-based company. So we have to comply with Section 230 and DMCA and all of these other kind of rules and regulations that apply to any

U.S.-based internet platform. But the Farcaster protocol, just like Ethereum or Bitcoin, that can exist anywhere if you boot up a server. So you could imagine a world where there's a DMCA violation, right, the copyright violation on a post on the network. Warpcast, just does not serve that content. We put a placeholder saying this is violating the DMCA, you know, we're obligated under Lata to not provide that. But that doesn't mean Warpcast deleted it from the network. In the same way that, again, you can't do that on the internet.

If I have a website in a different country, the U.S. doesn't have the ability to kind of say take down on that website. Maybe they try to use a back channel to another country. But for the most part, the internet applies the jurisdiction that you're in and the laws and regulations in each of those countries apply to websites differently. And so I think the Internet and email are much more structured in a way that works for a global audience. And I think the problem with Web 2 social and especially Twitter historically, and whether you want to take the previous regime or the current regime,

there's a bunch of people in San Francisco that basically decide what is allowed versus not. That's not how the Internet should work. The Internet should work in a much more decentralized way, which obviously the web does. Yeah. I mean, this is all so fascinating. And I do have more questions about, you know, what is Farkaster versus what is WRBcast. And we are going to discuss those in a moment. But first, a quick word from the sponsors who make this show possible. Pocod is the largest layer zero blockchain with over 2,000 developers. And the anticipated Pocodot 2.0 upgrade will be a massive accelerator for the ecosystem. Upgrading the infrastructure with eight times higher transaction throughput and twice as fast block times, perfectly tailored core time for the needs of every protocol, trustless bridges internally and into Ethereum, Cosmos, Near, and Binance Smart Chain.

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One other thing that I was wondering about when it comes to the protocol versus the client is, you know, I've heard you describe how Warpcast or maybe it's even Farcaster as well are kind of like Twitter plus Reddit. I even notice you're doing some stuff with groups where I'm like, are they going in a telegram direction too? But the point is that I also wondered, could there just be another client that is, you know, that's deciding we're going to be the Instagram, a farcaster, and ours is going to be all images and video. So, you know, how much of it kind of, yeah, in terms of the types of content or the structure of it depends on the client versus the protocol. Absolutely. And I hope and expect to see that. I think the reason we probably don't see that today is just that the user base has been so. small. And so the types of developers building on Farcaster have been more hobbyists. We've had a few more kind of like business oriented. People want to have a venture backed client. But again, in that world, it's just so difficult if you only have a few thousand people using it every day,

it's very, very difficult to build a business. And I think in a world where Farcaster is 10,000, 000 X the size it is now from a daily active user standpoint not signouts, then you have a sufficiently large enough number of people that you could actually build a client that is a little bit more specific, right? Like, trivial from a developer standpoint to say, just let's kind of like walk through the pseudocode, it kind of like you go to a Farcaster hub. You say, give me all the cast with images, like not hard. And so now all of a sudden you could just have a completely visual client.

It could look like Instagram. It could look like Pinterest. But the freedom to decide the user interface, that is 100%. the developer's prerogative. And I think that's really cool, whereas you can't go do that with a Web 2 social network. Similarly, we have clients, you know, I use app and client interchangeably.

I think generally I try to use the word app because that's what consumers understand. But if you really want to get technical on a protocol, a client is something that is kind of like an interface into the protocol. So you have an email client, right? I think about it as you already have today, some hobbyists have built clients that look more like Discord. So rather than show the stream of posts in a feed that looks more like Twitter,

they just say, well, it's text. I'm just going to show this to look something that looks more like a chat app. And we have other clients that have taken the same content and said, we're going to make this look more like Reddit or Hacker News, where it's kind of a more forum, you know, top-level content, you can click through and everything is nested. And that's just scratching the surface. I mean, those are kind of in some way skeu-morphic. They are interfaces that exist on other social networks.

There's nothing stopping anyone from coming up with something completely new because the data is all open and accessible for them. And then they don't have to ask it. It's permissionless. They do not have to ask us or anyone else to say, hey, is this okay if I do this? They just can do it. And I would imagine, for example, with this Vision Pro over the next two, three years as they get more mainstream, there's probably a cheaper one. Someone will come up with some really creative way to display a feed of information taking advantage of the fact that now you have three dimensions, right? Like basically all of our social network experiences to date are in two deep.

And the ability to kind of have total creative freedom and say, what, what? what would it look like in 3D could be very different, right? You could even imagine, so if you think about it like a Twitter, Twitter type feed, right? At any given point, depends on many people you follow. It almost feels like there's like two or three big conversations going on. And then you have your memes and your news and everything else lumped in there. Well, imagine if you were to put on a headset and you were to walk into kind of a virtual room and you're actually able to see the groups of people who are having the different conversations. that's actually a very simple thing that you see.

You walk into a party or an event. You kind of scan the room and you're like, oh, that's the area that I want to go to. Those are the people that I like the body language that's happening. All of those additional information that you get in the real world doesn't really happen when you have everything going through a piece of glass and a 2D feed. And so you can imagine some developer has a great idea to go make that version of a client and then they can just go do it.

And what I'm optimistic for is if we can continue to grow the number of people using Farcaster as a protocol, by the time these kind of 3D experiences are more mainstream in terms of the install base, just like mobile, right? Like the first year iPhone existed, it was only nerds. And then, you know, within five years, it was pretty dominant. When that developer who has that really interesting idea for that kind of like three dimensional social app, they're going to build it on Farcaster. because compared to Twitter, there's no API access. And so that's the assumption that Twitter, Twitter would actually staff a team to go build it and maybe. And obviously, meta is betting on the Metaverse. So I wouldn't put it past meta be the one that actually pioneers a lot of like

what is social look like in a more virtual augmented reality way. But I'm optimistic that if you just allow the whole internet to have full permissionless access to a social graph and you do a good job of just continuing to get more and more people to use it, then you're going to have a lot of really interesting permissionless innovation happen on top of that. So I'm actually getting so excited because if I just think about kind of the way I use social media, I, you know, kind of follow crypto stuff on Twitter, now Farcaster as well, like a little bit maybe telegram or something. But then, you know, I have talked before on the show,

like I'm interested in spiritual stuff and I follow a lot of kind of spiritual type people on Instagram. I also really like comedy and follow a lot of comedians on Instagram. And then the last bit is like I'm into kind of like style type stuff. And so I'm in these like Facebook groups where people talk about style. So in the future, let's say that there are like multiple different ways that, you know, developers have either created apps or whatever it might be to feed up, to, yeah, to feed people different types of social media content, then I as a user, would I use it all in one client or would I do it the way I'm, or one app

or the way I do it now where I'm like using different apps for different purposes? Yeah, so I think it all comes down to how many users you have using the social network, right? So in a world where farcaster is subscale, it's really difficult to justify building like a really high quality client outside of just a pure labor of love.

And maybe you get lucky at that. But I think I'm optimistic that if you can build a big enough user base of the decentralized social network, so these users are all on the FARCaster protocol, the data is permissionless, the ability to kind of frictionously onboard into new apps and services, if you get that number of users up to a sufficient size, calling the tens of millions is actually, I think, where you really need to have it. You're going to have this explosion of all of these different apps, right? clients that allow for differentiated experiences based on interest.

And so you could imagine a client that is very oriented towards people who are interested in spiritual things. And I don't know enough about that topic to know what are the... Yeah, there is one already called Insight Timer. But yeah, I guess it could be more decentralized. And then those, because like there are certain meditation teachers. They have like a lot of followers. But they then could like probably monetize it more.

more or something. Yes. And I think the challenge is, let's say you, let's just pick a different topic, cooking. You want to create a cooking social network. I'm actually not even aware of one that is like really large. I'm sure people have tried. It's a topic that I'm really into and understand. Obviously, that is a network that is going to have a bias towards recipes, sharing the visual elements of what you've cooked, kind of Q&A. So there's a whole bunch of different kind of things that you naturally do on a cooking social network. But the biggest challenge is you could go build all that product today in Web2.

How are you going to get everyone to sign up? And it's this cold start problem that I think limits the total number of social networks that basically exist today. And yes, you have forums and you have these subreddits and you have these little corners of the Internet that it exists. exists, but none of that is basically open API. And so you as a developer can't say, I want to build the world's best cooking social network on top of people I already know are interested in cooking because they're not operating on kind of an open, open platform. And so you get to a place where you get a sufficient number of people. Someone's going to go build a cooking social network. If I'm interested in cooking, I can seamlessly try it out. If I don't like it, I don't have to worry about it. If I do, I can add that as a dedicated app or maybe I'm passive and I'm only slightly interested in cooking. So I still want to just see it in my default feed.

You get maximum choice. And so I think that is the real flywheel will happen is basically developers don't have to spend as much time convincing people to sign up for a brand new social network because they're kind of already on one. And so it'll feel more like joining a subreddit, joining a Facebook group. And it kind of feels more seamless. but it gives the developer full creative freedom in terms of the user interface, the user experience.

And so that is the world that I'm really excited for because I think in that world, you have probably something on the order of 1,000 X, the number of social networks that are also sustainable, right? Because I have this point of view that any subreddit above a million people is probably actually a pretty good business. if you could somehow figure out how to get all of the people on that subreddit who are really there for Reddit and the topics, if you could peel off enough of those people or all of those people

into a more dedicated social network around that topic. And so I think Reddit has something on the order of, it's like 3 million subreddits all time, and only 5% of them are still active. And so you have this insane long tail. Ben Thompson talks about this on the internet. You can find 1,000 people to be interested in anything. I have this kind of crazy vision that at a certain point, the technology will get so good,

especially with some of this AI stuff, that basically anyone can go create their own social media client. And then it's actually just about bringing their audience or their friends. And so you'll have social networks with 100 people on it. And that's fine, like, because the infrastructure underneath is all handled. You don't have to worry about the identity component. You know, the onboarding people already there. They can just kind of join it and play around the app.

And if it's a good polished experience, great. And so there's a crazy world where every group chat you're in could turn into some version of its own client. And I think that that's like a little extreme. But I think enabling the creative freedom for people who can create things, first developers and then eventually everyone, you just untapped, you know, you tap it to a lot of latent potential. Yeah. And I actually feel like this. I mean, we talked about this a little bit of the.

beginning, but I'd like to dive a little bit deeper into it because, you know, creators, as we talked about, they have risks on these platforms. And, you know, as a reader myself, I feel like I noticed this, you know, I actually literally can name you the exact month when somehow the Twitter algorithm started defavoring me. Like, it was just very obvious to me and the person where we were managing that. And, you know, I never really changed my behavior to try to get it back up. But But, you know, like, it's kind of like, like, I get a lot of people in my DMs, like, very, very regularly telling me, oh, my God, like, you help me with this or that or I've learned so much from you or whatever. And yet the algorithm, like, acts as if, like, nobody's interested in me anymore. So for creators, if, you know, because I actually feel like another part of allowing, or, you know, I guess, you know, what's the word? Supercharging Farcester's growth is probably. appealing to creators who don't feel like they have ownership of their audience. You know, if I just think about the fact that like podcasts are an RSS, like that's how I own that audience and

that's really what's helped me. But I feel like that same exact thing could help other creators. And so, you know, what's an example of like how a creator could either monetize better or retain better access to their audience using something like a FARCaster as opposed to existing social media. Yeah, so it's a great point. I think two things. So one, so the original name for Farcaster was RSS Plus. I still use RSS today.

It's like pretty old school. But as you point out, all podcasts, this podcast will be distributed to your podcast player, listener. I guess it's called it reader, which is kind of weird because you're not read a podcast. But anyways, your podcast app, and that goes over RSS in the background. So it's this kind of old school technology. And I think one thing that is challenging, though, is there are three to four big centralized platforms. And because there's actually some competition there, they tend to be a little bit better about not deplatforming people for whatever reason, because it's a little bit more like, okay, well, then people might switch to a different app. But, you know, you still actually have a risk that people, are they going to switch to a different app to continue to listen to your podcast versus, you know, just they'll just keep.

using the existing podcast app that they use. So that actually is relevant for Farcaster in the sense that, to be intellectually honest, as long as warpcast as a large percentage of the network, the risk that our algorithm defavers, you know, does no longer favor someone or a certain type of thing, that is a risk. And I wouldn't tell anyone anything otherwise. But I think the difference is we are building Farcaster the protocol in a way that other people could go build another client.

We want other clients to exist. That's like why I'm working on this, right? I didn't necessarily have to go do anything really after Coinbase. And one of the reasons Verun and I wanted to work on this is like we wanted to see a protocol that is credibly neutral and centralize in the world be the primary way people like interact from a social standpoint. So there's a bit of like trust us, which, you know, I think a skeptical person's like, I don't want to trust you.

And I would agree. But at the same time, like it's going to just take time for us. to get there. So I think we have a ways to go to actually get to a place where I could look you in the eye and say, yeah, you wouldn't have that problem on Farcaster. That said, well, as long as I'm around, I like links. I think allowing people to earn their, in terms of just like putting good content on a network and getting distribution, you shouldn't be throttling their distribution. And I think in doing so, you actually are setting the network up to grow because then basically the most interesting people want to be on that network because they know that any distribution

that they're getting that they're not kind of being messed with. And then the last point about monetization, I'm completely aligned on in that I think one of the better things we can do is we, you know, we're a 12-person team. We've raised venture financing and we've been pretty conservative with our spend. So we don't have like a like a hole in our pocket that we need to go solve for right now. And so I think one of the long-term approaches we want to take is we want to be able to allow people on the network to monetize as much as they possibly can without us coming in and trying to take a cut. And in doing so, I think better monetization, assuming you can get some of the user growth can actually start to be pretty compelling. Whereas, you know, maybe you have a couple

hundred thousand followers on Twitter and 50,000 followers on Farcaster. But on Farcaster, you can monetize at a much higher rate because there's no throttling of links. Like, we're completely allowing you to basically do whatever you want. And this is where I think the crypto element comes in. Crypto monetizes it a much higher rate than traditional social media. So really simple example, if you share one of those NFT links on Varkaster in our app warpcast, they show up. There's a mint button.

You can tap Mint, make it really easy to mint. That's money that's going to the creator. And you can kind of roll your eyes and say, oh, that's stupid. But the reality is, I think there are a lot of people in the world who are very happy. to spend a small amount of money to get a little collectible, Chachkey, in this case, just an image, but they know that they're supporting someone that they really like, right? It's why Patreon exists and all these other things. But the idea to be able to do that right from the feed with a small payment, I think,

is it uniquely enabled by crypto? No, like you could go do that in a centralized way. But is that actually already a cultural thing that exists in crypto that I don't actually even think exists on something like X or Twitter? Yeah. And so I think the potential for better economics and more interesting ways to monetize, it definitely exists. And so I think if we can deliver on the user growth, then that I think will naturally flow. So now let's talk a little bit about some of the tech stuff with Farcaster.

Farcaster is built on optimism. And I just wondered, you know, when I kind of look at generally the layer one layer two space, you know, optimism is doing well, and yet the future also still seems uncertain. And I didn't know if that choice would ever affect things like, you know, could the protocol be shifted somewhere if if that future, you know, became necessary or, or, or, you know, as long as optimism is around is this fine? And also, I don't even know what control you have because I heard you say it's already decentralized. I didn't know if there was, you know, more being done to the protocol or if so, who was doing that.

Yeah. So a bunch of good questions there. So the first is it is on optimism. I think I got convinced L2s were really happening last year by Jesse, Pollock at base. So shout out to Jesse. And I think we had had the approach that we kind of had to be on Ethereum L1 or no one would take us seriously. And I think that the narrative shifted sufficiently last year in a good way that being on an Ethereum L2, there's a lot of work still to be done for Ethereum L2.

So, you know, and those teams, the teams working on the L2s are working very hard to deliver on the kind of sufficient level of decentralization and security that they're promising. But I think generally it became kind of almost like enough of a narrative and kind of a collective belief within at least the Ethereum world is that, yeah, L2s are good. We should move to L2s now. And so it kind of just happened. Like you had a bunch of, you know, projects that I think are high quality moved to L2. twos, whereas even a year before, I don't think people would have thought that they were ready. So that's really exciting. As it relates to the future of like where Farcaster is, I think we're quite happy with optimism. The team's energy is great. I love the vision for the

super chain that they have. And a lot of the other apps, obviously base, Zora's part of that. And so I think that network effect actually may be really powerful in a way that even if you have a a competing chain that has potentially better set of technical specifications, the network effect actually of the super chain and optimism is going to be hard to beat. But I think in terms of just if I was to give you a very simple answer, we could move the Farcaster network in terms of that small amount of on-chain activity happens. We could, but I think it would require kind of a social consensus. And I think it's effectively. the equivalent of like a hard fork, right? Because there could be in theory some people who

decide to stick around on the previous implementation. And I would probably push that towards the same thing that happened with the Dow hack back in the early days of Ethereum. Right. Like there was no, there was no kind of like master button, you know, reset button that you could press. It was, okay, this is what the group of, you know, high quality projects, the core developers, this is what we think the canonical chain is. And then people did it, right? And people tried to make ETH Classic work, but it really didn't happen. And so I actually think that I would step back and say most things in crypto, if you effectively have a very strong community and they're aligned with the set of decisions you're making, you can actually do a lot of stuff that maybe is not

technically possible. And generally, that's just the hard fork. Okay. That's really interesting because, you know, like we see it all the time where it's not quite clear, you know, what is happening. the protocol level, what's happening with the company that developed it. And so it sounds like, you know, it is truly decentralized, as you did say. Well, let me, let me, I, because I would love to always just argue against myself in the sense that I think, one, the core team that's building Farcaster, Warpcast is the company and then Farcaster's the protocol. We still have the like GitHub commit keys for the repos, right? we can decide what gets merged in. Now, other people are free to go do other implementations, right?

So, like, you know, we have different implementations of Ethereum nodes. Like someone could build a competing implementation. And if that started to do well in the market, obviously that would start to have a lot more influence. And so I do think that the decision making for the protocol is still quite centralized. From just a practical standpoint is, like, we're the ones that care about it the most. And we have our app warpcast, which is the majority of the traffic on the network. I do think what's important, though, and I always go back to this, as we grow the number of users, assuming we continue to have it be on the forecaster protocol, and as long as I'm around, I can promise you that I have every intention, it will start to attract other people who say, hey, wait a second, actually it is really valuable to have a say in this, and I'm going to go build in it for an implementation of a forecaster hub. And so now all of a sudden you have another rival kind of point within the protocol, which is very healthy.

And then I think the same thing will happen at the app layer, will there be a competitor to Warpcast? And I wouldn't even be surprised if it was a bigger crypto company that just kind of says, wait a second, we can add social features to our brokerage product or our wallet or something like that. And they already have a ton of users and quickly could actually be in a situation where Warpcast goes from, you know, 90% market share to 30% market share. And that I think would also be really healthy for the ecosystem. But I think until then, I would say it's technically decentralized. I think, you know, the core aspects, and it is permissionless. But in terms of the spiritual and or decision making, I think is still, it is still too decentralized in the sense that I could be compelled to do something potentially that I would not want to in the sense that in some weird hypothetical, where I would sleep better at night knowing there's a world. where it's like, no, even if you tried to compel me to do it,

it's just not technically possible in the same way that I think Ethereum or Bitcoin have's reached. And so that is what I want to get to, is to a place where, like, I'm a stakeholder, but not a decision, like the sole decision maker or, you know, Brun and I are the sole decision makers of a lot of the core things of the network. And are you imagining eventually we'll go to some kind of Dow model of governance? Sure. I think I would want to be thoughtful around, like, you know, people get really excited about, oh, decentralized the governance.

And it's like, okay, this is just going to make us move slower. And like, if anything, adds complexity. I don't think of Dow's as like the most effective governance organizations yet. I think they're still pretty early. But do I want to get to a world where I can say with a straight face and full intellectual honesty that the decision making for the core parts of the protocol are decentralized in a way that I just can't utiliterally make them. Yes, like for sure. And so whatever that model looks like, we'll kind of figure it out over the next couple of years. Yeah, I mean, it would get complicated

because maybe you'd have to introduce a token and that it's just at the moment. Yeah, basically my goal is to avoid complexity until the complexity is worth the juice. And so I think that is how my view is like our existential problem for forecasts right now is we just don't have enough people using it. And you'll never attract the other developers to want to show up. And so until we've cracked that, we need to be moving as quickly as possible with the right transparency and kind of like tradeoffs and just making people clearer on what we're doing and why. And so far, I think the last three years, we've done a decent job at that. And I think we've earned the trust of a lot of like early community members. Like, yes, there are kind of like, if I was to evaluate

how decentralized this thing is today, it's not. in certain, you know, veins. But at the same time, the team has consistently done what it said and tried to not do overhyping or things like that, which I think, you know, having been in crypto for 10 years, I think there are a lot of teams that talk about roadmaps and what they want to do and then never actually deliver on it. And so I think our view has always been is make decisions quickly, move forward with what we think the best version that is going to make this thing successful, and then just deliver from like a result. standpoint, whether that is the actual technical decentralization and making it permissionless or more recently with user growth, right? And I think we still have a ton to do. But I think what is definitely been a winning strategy for us from building our initial community is say what we're going to do and then actually go do it. Yeah. Yeah. And I feel like even just listening to you,

I'm like hearing your Coinbase background come through. So I did want to ask about hubs. What's the cost for them to store data? How do they earn money? How quickly could a hub that joined today break even? So hubs don't actually get paid. Fun fact, Bitcoin nodes and Ethereum nodes don't actually get paid either. They just tend to be run by economically incentivized actors within those networks. Obviously, a lot of miners.

And in the case of Ethereum now stakers or validators, I always forget the term. But those nodes exist. but beyond like there are plenty of people who are running it altruistically. And then I think more importantly, and as from my direct experience, Coinbase, until Ethereum started doing staking, Coinbase did not have any mining or interest in either Bitcoin or Ethereum, but was running a set of those nodes for both of those networks because they needed direct access to the network.

And there was value in having that in order to run your business. So I'd say that the same thing is the case for Farcaster is we have like 500 people running nodes or hubs today. I think it's probably too many. And I actually think that there's a bunch of folks that are running them because they think that there's like some future benefit, despite me saying to them, hey, like literally like there is no economic model that actually works. No one has figured out a way to actually prove that you are serving data correctly. Like there's anytime you do an economic incentive to get people to run something, they are going to spoof and make it fake so that they can get paid. And the reality is you don't get paid for running the node for Bitcoin or Ethereum. You get paid for doing the work.

So you either do the proof of work or you do the staking validating. And so that is that is something that we have yet to figure out a proof of work mechanism for hubs. And so our view is what will be most likely the case is that if we can continue to grow the users on the network, there will be a sufficient number of companies that will either want their own hub, right? Because a hub provides global state just like a Bitcoin or Ethereum node. So like you boot up a hub within 30 to 60 minutes. The entire network, the entire history of the network is all in one machine. So that's a pretty powerful primitive for a developer.

But if you're a forecaster client or you're building that spiritual social network in two or three years, you probably are just going to want to have your own hub. Like, why wouldn't you? Like, it's your direct access to the network. You don't need to be relying on anybody else. And so that is how the system works today. And I think hubs on the order of like, I think people have figured out how to run them on really cheap machines. But I would say conservatively, it's like something closer to about $100 a month.

So call it roughly $1,000. a year to run a hub. And so I think the natural break even will be, are you building something on Farcaster that generates you more than $1,000 a year? So you'll probably have mostly app developers who will run those hubs. Okay. And then so when people sign up, then I think they get charged like about $7 a year for storage. So is it the app that receives that like Farcaster or Supercaster?

Yeah. So a couple things. So one, the actual price at the protocol, if you were just to go interact as a developer directly with the smart contract on OP Mainnet, it's $3. And we've brought the price down. We want to be careful because basically,

if you make it free, what will happen is people will just spam hubs. Hubs will get so much data on them that people won't be able to run them and then you effectively kill the decentralization of the network. So we started actually with a fee that in order for your, remember, like the hub looks at any message coming to it. It's like, hello world, that post. And it says, is there a record on the blockchain

that I can check? And so we have a fee in order to create that record, right? And so that incentivizes people or it disincentivizes spam because obviously each user would cost more money. And then technically, users actually have a limited amount of space per user on the network. Most people don't even come close to it. It's like only like a, you know, one percent of users run into an issue where they'd run out and you can just buy another storage. slots for $3. So what Warpcast does is actually we say to onboard, you don't need any crypto. We'll just use Apple's Apple Pay in-app payments in the app.

And you pay us $5. And then what we do is we take that and we then do your registration on chain for you. And so you give us the fiat in the app. It's like a slick experience. And then we actually do the complexity of interacting with the blockchain. Okay. The fees for the storage, like the $3, because we have to give a cut to Apple for warp gas, that's why it's more.

The fees for storage actually are just going to the protocol. And so we haven't made a decision on what to do with that yet. So it's up to, you know, I think $500,000 total in the treasury. And we're just going to let that continue to accumulate. And at some point, probably in the next like year to two years, we will have a better strategy going back to this idea of decentralizing the core part of the protocol around what should we do with the funds that every user, and Warpcast doesn't have like a special like, oh, we can sign users up for free. No, no, no, we're paying money out of the kind of like our customers and then, you know, kind of like our bank account into Ethereum,

which then gets put into this protocol. The money that it or the eth that accumulates in the protocol, I'm optimistic. could end up basically being funding for basically an independent developer. So someone who doesn't work for Warpcast that actually has the best interest in the protocol in mind. And so that's actually a great first way. If you can get up to a point where you have two or three years worth of, you know, really great developers' salary or a couple of them, then you actually start to have a

competing group of people that are independent from Warpcast, which is a company. And so that's what we're thinking about doing in terms of from a fee standpoint is the protocol. Every user has to pay per year in the same way that you'd pay for a domain or ENS or something like that. And we're going to see if that works, right? We're going to have a bunch of churn next year, like people who signed up didn't find it useful and then are not going to come back. But we're going to figure that out.

And then hopefully we get to a place where it's like, okay, there's actually a sustainable model where call it you have, I don't know, a million people who are using Farcaster in the next couple of years, and they're paying $3 a year, that's a $3, $4 million budget to the kind of like protocol team that is independent of any one company. So that would be my aspiration there. That's super interesting. I think that a lot of people prematurely just do stuff. They're like, oh, we brought money into the protocol.

Great. Let's go spend it. It's like, no, like let's actually get to a place where we have a much more holistic understanding of like what a steady state look like for this thing. Yeah. So let's now talk about kind of, you know, future direction type things. It just feels like there's so much experimentation. You know, one thing that I was wondering about frames is, would you expect that the different types of frames that people are building get standardized in some fashion? Like, you know, we're seeing once around, you know, minting or events or whatever, do you feel like it'll be kind of like, you know, these token standards or something? Or do you think that it'll be the way wallets are where there's, you know, a bunch of different. crypto wallets and you can choose from, you know, 20 different events frames. Yeah. So I suspect what will happen is there will be natural standardization around like

very popular frames. I think that's good for the ecosystem. It makes it much easier for other developers. As you point out, like Warpcast has, you know, great support for frames. I think some of the other farcaster clients were quickly able to add them. But, you know, you have to kind of keep up with all the changes. And at a certain point, like kind of once you understand, it's like, okay, this is a, this is a frame that mince an NFT. And here are all the things you actually kind of want within that. Getting that as like a core standard makes it much easier for someone to have like a library effectively at open source library that it's like, oh, easily add a mint frame to your

app and or as a creator, create a mint frame. So it kind of helps both the supply and demand side of things. I think the thing that I'm a big believer in though is you don't want to actually force everything into standards up front because then you get a bunch of innovation that never happens. So if you have to get permission to create a new type of frame or supported, just people are going to be like, oh, it's friction or I'm lazy and I don't want to do that. And so then you just never have it happen. And so I think with the, with frames, it's really important for us to actually just allow

developers the creative freedom within a very constrained canvas. And so I think we're more focused right now is what additional functionality, what what additional sub-primitives within the primitive that we can offer developers for them to get really creative. And I don't even think we talked about a few examples, but just so people can kind of grok the range of things. So our initial example was a poll, which is pretty simple, right? Like that's what Twitter has. We didn't have them natively. So now you can easily embed a frame that is a poll. Makes it easy to count. Displayed as a chart. Great. We had one from a company called Gallery that is like an NFT portfolio site.

And so the idea is if you just link to your profile on that site on Twitter, it would just be the link to the gallery. DWR is my username. So you can see me there. But when you do it on Farcaster, you could actually just go through the NFTs and kind of like a carousel, which was kind of nice. Someone built a full chess game for buttons and still was able to build a full game of chess in this frame, which.

was really creative. And then if you actually could beat the computer, you would win an NFT on chain. So that was good. Someone figured out how to put the video game Doom, which is an old video game, but it's kind of a meme of like any new developer primitive. Like, does it run Doom? Is kind of the joke. And sure enough, someone was able to put Doom into a frame. And then the last one that I'm kind of still blown away by. And I think is actually kicking off a whole bunch of people building in this general area is someone built a shopping cart in a frame. And so it was a little bit of a gimmick. It was buy Girl Scout cookies. And so the initial view, you could pick one of four different types of Girl Scout cookies. You click on one of the buttons.

And then it actually kind of dynamically changed it over to a product page where you could kind of add stuff to your shopping cart or take it away. Then you click checkout on the chopping cart. And then from there, it kicked you out to Coinbase Commerce with a link. And you were able to check out. And when we were originally designing the feature, we had no, no, there was not even close to our radar of people being able to do that. So I think it's a sign of a good primitive is when you keep it really simple and then people just continue to surprise you with how they extend the functionality, despite you not actually adding any new functionality yourself. Yeah. No, I find all those examples so fascinating and interesting. And I noticed that one of the

recent things I saw in the last day or two was that you, I think, you're either you're adding or you're thinking about adding token gaining for DAWS in Warpcast, which that seemed interesting to me as well. You know, what's your vision for how people might use that? So it's a fun, fun story here is one of the earliest versions of Farcaster in 2021 had this feature. No one used it because the network was too small. So it was like when you have a really small network, you don't want to be gating any conversations. Basically, it's one big conversation. network is a lot bigger now. And naturally with that, you have great people join.

And then you have a bunch of people who don't know the norms, low effort, spammy. And so now gating all of a sudden becomes a more interesting feature. And so it's a classic example of timing is everything. And I could have told you that feature doesn't work. But my sense is the feature, if we brought it back basically the same way that we had before, it would be quite popular now because I think people are wanting. to keep signal noise ratio high. And so what we did is we have a kind of, you can think of it as like there's public content

on the network, casts, like tweets, and then there are, you know, private content, DMs. We call them direct casts. And so we have groups within the kind of private context. And so we just made it easy so that you could just link an NFT to the group and say, okay, here's an invite link, make it really easy to share it in a public forum and say, hey, anyone who wants to join my group chat, you need to. to have a pudgy penguin. Or I think more compelling, it's I'm an artist. Any of my, you know, kind of fans or support, you know, people who own my art, here's a, here's a gated chat that you can

have with me. And so that's like one example, but I think we want to potentially bring that to the public context because I think one powerful idea is that you have a limited amount of time. And doing everything in a private chat is great for engagement, but it is actually not increasing your awareness. And so what if you can actually just do that publicly where it's, hey, I have this kind of channel, this public space that I'm going to have conversations with other people who, you know, own my art or, you know, have this token. And the only people who can actually publicly respond are those people. but everyone else who doesn't have it can actually see the quality of discussion. And in some ways, that becomes top of funnel marketing, right? Like, oh, wow, that community is really interesting.

Like, they have these really interesting discussions. I'm going to go buy that NFT because I want to participate. And so it's actually potentially a new monetization model for creators. And so I think it's something that we kind of want to figure out the right way to do it and then implement. I love it. So I have to also ask about the story behind the names. FARCaster and also Warpcast. I noticed that, you know, there's the verb to cast in the app.

And, you know, I just thought maybe you were aiming for something like tweet. I was just curious about that. Farcaster comes from the book Hyperion. And it's kind of this like portal that you can go through and takes you somewhere else. We were throwing around names and naming is super hard. And we got to a point where we liked the way it sounded. It's funny. So many people think that the name is terrible, but I think the reality is most names are actually kind of bad.

And what people ascribe to a name is actually what it is. And so if you think of like Google or Airbnb or even Coinbase, these are names that we just take for granted now, but like sound weird when you first hear it. And I think we like this idea that like cast, right, like broadcast, like there's an element of kind of distributing information. So Farcaster was the name that we did for the protocol. And then Warcast, very quickly, people started naming anything that was built on top of Farcaster. Originally, we didn't even have a different name for our client. We just called it the Farcaster app. And then I think it got to a point where we started having other people build on it.

And it's like, well, that's unfair. You have this protocol and your name. It would be like if there was an official email client named email and then everyone else had to have a different name. whereas obviously with email, email is the underlying protocol. And then someone would be like, okay, what is your email or what email app do you use, Gmail, Yahoo, Outlook, et cetera. And so we renamed that kind of core app last year. And we just kind of said, like, let's pick something simple, two syllable.

And I always try to use the bar test. If you're in a bar and you have to yell the name of something, could someone kind of get it? And warpcasts, like it's actually somewhat easy to, like roll off the tongue and say. So it really doesn't have any meaning outside of like warp speed. You can kind of take that vibe. It's fun, fun fact is everyone hates our icon.

So the Farcaster icon is this, this arch with this like lavender purple. And I was actually the one to kind of like put it together. And I'm not that talented from a graphic design. But love that icon. Like there's so many memes with the Farcaster arch like everyone loves it. When we renamed, so that was the original icon of the app.

When we renamed our app to warp, We were busy. I used 99 designs. I basically didn't like any of the designs. And I just took the one that looks like a big fat W. Like for people who know the University of Washington, it's like basically that logo. And universally hated. Like every single person is like, this is the worst icon I've ever seen. And we were just like, well, we got other stuff to do. So now we have this like terrible icon that everyone makes fun of. But the reality is they keep using the app because no one really actually cares about an icon or the name. They care. about what does the thing do? Okay, that's really funny. Another thing that I just have to ask, obviously, and you keep referencing this is, you know, you were very early at Coinbase. You were there for a long time.

Coinbase is probably the most successful company in crypto, you know, centralized. So I just wondered if you could reflect a little bit on how your experience working at Coinbase has helped you in building Farcaster or sort of like what you've taken from that. because I think this is kind of a different context. So I'm just curious, yeah, to hear your thoughts on that. Yeah, I mean, a bunch of things. I learned so much for my time at Coinbase and especially working with Brian and Fred.

I think a couple things. So one, I actually have a blog post. I shared it this week again. I wrote this for Bologi, Trinivasin's short-lived Nakamoto publication called Coinbase's crypto pragmatism. And I think that the core value at Coinbase is this idea of pragmatic tradeoffs and realizing that user experience really matters and being ideological might win you some points on the internet, but the reality is people won't use your product. And so I think we've really tried to build everything we do with Farcaster in a very pragmatic way. And that honed that very much at Coinbase.

I think high hiring bar is something that Coinbase has. I think we probably took it even higher in terms of we were pretty patient. it was really hard to hire for the first year and a half. We basically said no to everyone. And now we have a team of 12. And I just like remember that first, you know, two years of the company where it was like hiring was so hard. But I think where we realized Coinbase is like real,

the hiring bar that Coinbase has. And if you actually can meet or exceed that and you're patient and you end up having great people, you don't actually have to have that many people. That's actually something I learned from Coinbase. And, you know, hindsight's 2020, and the company is incredibly successful. So I don't want to take anything away from that is I actually think Coinbase grew too fast and had too many people. And that caused a lot of problems. And the company took a really long time to digest, just being bigger.

And so we've intentionally built a company really small. So we're 12 people. I'm the only non-engineer on the team. Everyone is a staff level engineer. So for those who don't know engineering skills, it's like really, really senior. It's like 10 plus years of experience. And that has served us really well because we haven't had to, But we had 10x scale in two weeks, and we had some downtime.

But for the most part, we're able to kind of weather that pretty well. Whereas, I think a team of more junior people, you have a lot of energy. But frankly, that they're learning on the job from an experience standpoint. And so that's actually been a slightly different learning. And then I think the last thing is just building through a bare market. I built through two of them at Coinbase. And Verun did as well. And so when we started the company in the fall of 2020, you know, things were feeling pretty good in crypto.

Obviously, 2020 was, 21 was insane. But we knew we were going to be building through a cycle. Like, and we didn't know when it would happen. Frankly, I didn't think it would happen as soon as it did in 2022. But our view was we want to be well positioned going into a bear market. And so, you know, we got a little lucky in terms of like we kind of timed our fundraise. the right times we were able to raise probably more than we would have been able to had the market fallen out. But then we were really disciplined about not spending it. And that's actually something

I learned from Brian and Fred is, you know, Coinbase basically never spent after the Series C never spent any of that money, like all that money, like the company was making money at that point. So it was kind of an insurance policy. And so for us, we raised a pretty big round in 2022. And we took the same exact approach and said we were going to be really conservative about spending this. And so we still have, I want to say it's like 85, 80% of the money that we raise in 2022. And so we feel really good about going into what could potentially be with 2024, like, you know, the beginnings of an upmarket for crypto with a really senior team. And we don't have any immediate pressure to go fundraise despite having had all this growth. And so I think

had I not spent five years at Coinbase watching that company, for the good and the bad, I would be in, I think, a very different position. It would be a lot less mature about some of the decisions we made and frankly just made more mistakes. Yeah, yeah, that makes sense. I mean, just covering Coinbase, I know the DNA of Brian and Fred and agree that they're some of the most kind of like sober types of founders I've ever met in my entire life. They were described once in an interview, which is pretty funny, is Swiss Vulcan banker.

which if you've ever spent time with either of them, being exuberant is probably not their default quality. No, no. And honestly, even recently, you tweeted or cast it something about, you know, how you guys aren't doing conferences. And I was like, yeah, he definitely worked at Coinbase. I was the guy who went to all the conferences. I can tell you, here's the thing about conferences. Great time. It's great to see all the people you see online all the time.

in an industry that is distributed as crypto around the world, I actually think conferences are probably more valuable than most industries. But if you really ask yourself as an entrepreneur, are you actually working or are you kind of having a little bit of a work vacation? Which is fine. Everyone needs a chance to recharge. I think in my case and Varun, we have kids. So like my version of the world is work kids, work kids.

That's it. And so I think conferences, we're going to go to FARCon, which is going to be in Venice Beach this year, which is where we are. And that's 100% grassroots conference. They did it last year, impromptu, and then the community is running it. So people keep sending me emails to be like, we want to sponsor FARCON. I'm not involved. Like, I literally am just, I'm like showing up to speak there. But, like, it's a testament to the community on Farcaster is, like, people want to see each other enough, not related to, like, another conference is that they actually want to have a.

as farcaster-specific conference. Yeah, yeah, no, I love that. And Ted was on the chopping block, which is also on our channel. And she talked about her experience and how that came about. So here you are. You're at this point, you have like roughly 40,000-ish, 50,000-ish daily active users. So what's your strategy for how to scale this to something close to Web 2 social numbers? So day 30 retention, if people want the inside baseball, like,

two numbers. It's like, how many daily active users do you have? And then when they sign up, what percentage of the people are coming back 30 days later? And great social apps have really good retention, WhatsApp, Instagram, and then mediocre social apps have low retention. And dead social apps like literally just lose their users over time. And so I think that's, we've had this great two weeks, you know, thrilled for the team, thrilled for the protocol. But, you know, talk to me, you know, March 9th is kind of where I'll probably have a better sense of like, okay, where are we actually now in the sense of what's more of a steady state? And then I think regardless of where that plays out, I think Farcuster probably has a new level

of awareness out there, which is great. Like that's one of the best parts about having a lot of growth in a short period of time. And I think we're naturally going to say, okay, how much more crypto Twitter can we go and kind of target from a, kind of, of growth standpoint, or is it time for us to actually start thinking about adjacent categories? And my view is if you're like interested in crypto, you may also be interested in, I don't know, longevity. And someone like Brian Johnson or people who are interested in that whole camp may decent overlap. And to your point, at the beginning of the episode, we are trying as much as we can to make Warpcast feel Web 2 in all the kind of look feel.

user experience, don't throw crypto right in your face right at the beginning. And then, like I said before, that mullet of where it's like what you see up front versus what's happening in the back, like people progressively get more interested in maybe some of the other mechanics, whether it's around monetization or, you know, collecting an NFT in the feed and things like that. And so I think that's going to be our strategy is very much, you are not going to get a person who's not already crypto-native to like join a crypto-native social network, but you may be able to get them to join a social network that offers a better, whether it's a different client or within Warpcast, a community around something that they're already interested in. And naturally, they may get more crypto pill

just by being there and the functionality that exists. All right. Well, we'll have to check back and see how everything goes. Dan, thank you so much. It has really been a pleasure. Oh, and also, but where should people, you know, find you if they want to, you know, follow you? anywhere. Well, if you want to join Farcaster, just, you know, Google Farcaster or Farcester. And we make it really clear how to go sign up. If you don't want to join Farcaster, but you want to get Farcaster updates from me, because this is what I use Twitter for at this point. You can follow me on Twitter. But on both networks, I'm DWR. Perfect. Well, thanks so much for coming on Unchained. Thanks for having me.

Thanks so much for joining us today. To learn more about Dan and Farcaster, check out the show us for this episode. Unchained is produced by me, Laura Shin, built up from Nelson Wong, Matt Pilcher, Juan Mervanovich, Megan Gavis, Shishonk, and Margaret Curia. Thanks for listening. Unchained is now a part of the Coin Desk Podcast Network. For the latest in digital assets, check out markets daily five days a week with host Noel Atchison. Follow the CoinDesk podcast network for some of the best shows in crypto.