Despite the recent hype surrounding decentralized social networks, these platforms are struggling to attract and retain users. According to industry insiders, up to 99% of users who try decentralized social media for the first time end up quitting. This can be attributed to various factors, including clunky onboarding processes and the lack of a familiar network. Ed Moss, head of growth for layer-1 blockchain firm DeSo, highlighted the tedious and expensive nature of the onboarding process for mainstream users. From transferring cryptocurrencies to paying high gas fees, the entire process can be overwhelming, leading to user drop-off. Simplifying the onboarding flow is critical to improving user retention in decentralized social media platforms.
The Blockchain Learning Curve
Another obstacle to user adoption of decentralized social media is the steep learning curve associated with blockchain technology. Potential users must familiarize themselves with concepts such as smart contracts, wallets, and blockchain itself before they can even sign up. This extra step can discourage individuals from taking the plunge into decentralized social media, hindering growth and mainstream adoption. Suhail Kakar, creator of DeSo app Onboard, compared joining a decentralized social platform to attending a party where you don’t know anyone. Building communities and attracting influential creators and influencers may help overcome this hurdle, as users tend to follow high-quality content.
The dominance of centralized social media platforms like Facebook, Instagram, and Twitter poses a significant challenge to decentralized alternatives. These platforms have established massive network effects, with billions of monthly active users. In comparison, decentralized social media networks struggle to attract a fraction of that user base. For example, Odysee, one of the most visited decentralized social media platforms, averaged only 5.3 million monthly unique users between January and April. The allure of decentralized social media lies in its potential for full decentralization and user ownership of content and identity. However, without a larger user base, achieving true decentralization remains a distant goal.
The Need for Purpose-Built Blockchain Solutions
Ethereum and other smart contract platforms, which currently dominate the decentralized social media landscape, are not specifically designed to handle social media applications at scale. According to Ed Moss, a storage-heavy or infinite-state blockchain would be an ideal solution. Such a blockchain could store and index vast amounts of data, including actions like posts, likes, follows, comments, and social graphs. The ability to record these interactions directly on-chain would enable complete decentralization, free from corporate entities or centralized governments. This, in turn, would empower end-users to truly own their content and social graph. Until purpose-built blockchain solutions are developed, decentralized social media may struggle to attract mainstream users.
One notable decentralized social platform that has seen recent success is Friend.tech. Powered by the Base protocol, Friend.tech enables creators to connect with their audience through tokenized attention. The platform assigns influence to creators based on shares or keys, which can be traded for access to exclusive private chat rooms. Since its launch, Friend.tech has attracted over 85,000 users across 127,000 wallets, with over 630,000 requests sent to the network. This initial success is promising, but industry experts caution against viewing it as a long-term trend. The future of decentralized social media networks remains uncertain, and only time will tell if they can sustain their growth.
The Projected Revenue of Decentralized Social Media
Despite the challenges faced by decentralized social media, the industry’s revenue potential is significant. Sales revenue from decentralized social media networks is projected to reach $12.1 billion by 2023, with an estimated compound annual growth rate of 23.6% to surpass $101 billion by 2033, according to Future Markets Insights. This projection highlights the growing interest and potential for decentralized alternatives to traditional social media platforms. Other decentralized social media networks, such as Jack Dorsey’s Bluesky, Mastodon, and Lens Protocol, are also vying for a piece of the market.
Preserving the Moment with NFTs
As the crypto space continues to evolve, it is essential to preserve significant moments in history. One way to achieve this is by collecting articles like this one as Non-Fungible Tokens (NFTs). By doing so, individuals can show their support for independent journalism in the crypto space while maintaining a record of important developments. NFTs have gained traction as a means of tokenizing digital assets and providing provenance and authenticity to unique content.
Decentralized social media faces significant challenges in onboarding users and retaining them. The complex nature of blockchain technology, the dominance of centralized social media platforms, and the lack of purpose-built blockchain solutions all contribute to slower adoption and user drop-off in decentralized alternatives. However, promising projects like Friend.tech demonstrate the potential for growth and revenue in this evolving industry. As decentralized social media continues to develop, it is essential to address these challenges and provide a user-friendly, decentralized experience that rivals centralized platforms.