Farcaster, as one of the top tier social protocols, which has secured a $30 million investment from top-tier institutions like A16z, is drawing more users and attention recently. From Dune Analytics, Farcaster DAU increased to ~30k and the daily engagements volume surged to 2+m. One major reason for this is the introduction of a new feature called Frames within the Warpast client.
Source: https://dune.com/pixelhack/farcaster
Background: What’s Farcaster
Farcaster is a decentralized social protocol designed to facilitate direct connections between users while allowing developers access to public data without permission. By supporting diverse clients and dapps, it encourages innovation and experimentation to provide more choices. Farcaster is built on Ethereum and OP for on-chain management of user identities, and stores messages and posts in an off-chain Hub network to improve speed and reduce costs.
Farcaster has a hybrid architecture that stores identity onchain and data offchain. Farcaster's onchain systems are implemented as contracts on OP Mainnet. Only a handful of actions are performed onchain, including creating an account, paying rent to store data ****and adding account keys for connected apps. The offchain system is a peer-to-peer network of servers called Hubs which store user data. The majority of user actions are performed offchain, including posting a new public message, following another user, reacting to a post etc.
Source: https://docs.farcaster.xyz/learn/architecture/overview
Contract:
A Farcaster account is managed and secured onchain using the Farcaster contracts. There are three main contracts deployed on OP Mainnet:
Id Registry: creates new accounts
Storage Registry: rents storage to accounts
Key Registry: adds and removes app keys from accounts
Hubs:
Hubs are a distributed network of servers that store and validate Farcaster data. Farcaster facilitates real-time data synchronization and propagation through Hub nodes. Applications can achieve real-time read-write interaction with Farcaster by running Hub nodes.
https://docs.farcaster.xyz/learn/architecture/hubs
ENS Name:
Currently, Farcaster supports two types of ENS domains:
Off-chain ENS names: Free, controlled by Farcaster, and changeable every 28 days.
On-chain ENS domains: Paid, controlled by the wallet.
Fnames (the first type) are controlled by the fcast.id subdomain. Users can register and use them within all Farcaster apps. The workings of fnames are detailed in the ENSIP-16 and ERC-3668 proposals.
Timeline of Farcaster:
July 13, 2023: Farcaster announced the fundraising of a $30 million funding round led by a16z, with participation from 1confirmation, Coinbase Ventures, and several other VCs. Besides the supporting from tier1 crypto VCs, some celebraties also showed interest in the product. Vitalik Buterin has been active on Farcaster, expressing his opinions on the platform and stating that "Farcaster is actually very successful."
July 27, 2023: Farcaster announced support for ENS usernames, allowing users to connect ENS domains. On August 22, the official announcement came that Farcaster migrated to the OP Mainnet. On October 12, 2023, co-founder Dan Romero announced that Farcaster had achieved 100% open, permissionless usage. Registration requires a $5 annual fee paid through fiat channels (reduced to $3 through an invitation link), with users receiving 50 WARPS tokens when login, currently valued at $5, which can be used for rewarding the creators you like.
Farcaster now boasts over 20 developed applications and nearly 240k registered users. With the Frames feature on Warpcast and the hype surrounding related memecoins, Farcaster's daily active users (DAU) have reached nearly 30k, with daily interactions exceeding 2m. The protocol's total revenue also exceeded $800k. Yet recently, there has been a decline in the number of new registrations for the protocol after the hype.
Warpcast & Frames
Warpcast is the official client for Farcaster protocol developed by the Farcaster team, supporting desktop, Android, and iOS system. Its UIUX is similar to Twitter/X. Users can register and log in without needing to own a cryptocurrency wallet, the annual fee is paid through Google Pay or Apple Pay.
In warpast, users can engage with posts(casts) by commenting, liking, recasting and warping (giving rewards). Warps, used for rewards, can be purchased using fiat currency at a price of 0.01u/warps. In addition to purchases, users can earn Warps rewards through registration, inviting friends, and receiving rewards from others. Users can also add specific tags when posting to indicate the channel to which it belongs and explore discussions on specific topics within channels.
A Frame is an kind of interactive app on Farcaster. The design and logic is straightforward: it is embedded within the feeds and presents users with images and buttons. A Frame is essentially an HTML web application hosted on a web server. The Farcaster official documentation provides detailed tutorials for Frame development.
Since the launch of Frames, Farcaster's daily active user count has surged. Developers are eagerly building crypto native Frames such as claiming or minting NFTs, polls and token airdrops etc. Most functionalities can be completed directly on the warpcast page without any signing or redirection. According to Spindl statistics, within a week of its introduction, over four hundred applications have released nearly a thousand Frames. One popular Frame at the beginning, called cookiecaster, implements e-commerce shopping within Warpcast. Users select their cookie flavors, make payments, and receive both physical cookies and free on-chain cookie proofs, reminiscent of the Bitcoin pizza's Renaissance.
Another common application of Frames functionality is using for incentives. The official Coinbase Farcaster account, Based Institute, has introduced certification and rewards for active users. Users need to meet specific requirements such as follower count, account age, posting activity, etc., to be eligible to claim rewards, which include 0.001 ETH and 8453 TYBG, a community memecoin.
At the same time, we are witnessing more projects within the Farcaster ecosystem ingeniously leveraging the Frames functionality. For example, Bountycaster, a task platform created by Linda Xie (former co-founder of Scalar Capital and Coinbase product manager), utilizes Frames to set up automatic task message notifications. Users can claim rewards by completing tasks, and recently, there has been a noticeable increase in tasks related to Frames.
The creator platform Paragraph, which is backed by investors like USV and Coinbase Ventures and is built on Base chain, has also developed and improved its functionality around Frames. In the feeds, Paragraph's long-form previews feature three button options: Read Online, Read inline, and Subscribe. Read Online functions similarly to other platforms, redirecting users to a webpage for the full article. Read inline, however, allows users to read the entire article directly within the information stream using embedded pagination.
The speculation and airdrop of memecoins and NFTs have played a significant role in driving Frames to become a market hotspot. Several tokens have been distributed for free to early Farcaster users through airdrops, creating a wealth effect that has drawn in more new users to Farcaster. It also attracted many degens and ogs to play in this area. For example, the token $DEGEN raised 490.5 eth from crypto angels, and the community also built some fancy tricks (points ecosystem, incentives for LPs etc.)
Why Frames are exciting
From Twitter to Netflix to TikTok, each platform has leveraged the users’ data to get more revenue and building up moat. Because the giants controlled the users’ data completely and the moat is built by network effects, it’s hard for new startups enter the competition, and it’s a significant winner-takes-all market. In web2, user’s data and time are used for personalized recommendation algorithms, which is a key way to generate more revenue. But the benefits got from the users are occupied by the companies entirely, meanwhile the user experience is hurt. In the decentralized social platforms, all data are open and controlled by users themselves.
From another perspective, the Web2 social platforms are not likely to integrate with payments, users need to switch to other apps to confirm, leading to a cumbersome experience. Although Frames now have limited functions, we see the potential to streamline these unnecessary transitions and confirmations into a single inline experience, focusing on intent and user experience while concealing complex linkage processes.
Imagine these user scenarios:
A social media influencer shares a selfie, along with a purchase link for the clothes featured in the photo, accompanied by a 10% discount coupon. Fans can one-click purchase in the feed: the influencer receives a kickback, the manufacturer sells the product, and you complete the purchase at a discounted price with a smooth experience.
You are reading an announcement about a new protocol and new token: next to the text is an intuitive purchase interface for one-click buying. This is a feature not yet implemented by any existing products.
Someone writes an insightful long-form article and shares the link to the content: with just one click, you can view the article of interest, pay, or reward the author (and there are rewards for recommending shares as well). This costs you only a few cents, offering a different experience from buying e-books and other paid content.
Of course, in the Web3 space, the fusion of social and financial aspects has seen numerous attempts, not limited to the characteristics of Frames alone. Friend.Tech, which gained popularity over the past year, has deeply integrated financial speculation attributes with social elements using price curves and fee-sharing models. However, its trading targets are limited (only personal keys can be traded). Telegram bots leverage Telegram's conversational format to provide a more user-friendly decentralized exchange (DEX) functionality, yet the construction of social relationships is not integrated into the product. Task platforms like Galxe assist users growth activities through task assignments but heavily rely on traditional social platforms like X and require multiple authentications and redirects.
Different products have different niche pathways, but all explore the interoperable identity and transaction record characteristics of blockchain. If we dare to imagine, the seamless coupling of consumer experience with on-chain mechanisms is highly natural in Web3. By creating Frames and hiding user-unfriendly operations like wallet signatures in the background, seamless handling of money and digital ownership makes it possible to have a genuine and universal user behavior graph across consumer applications. This achievement surpasses even the heights of Web2's dominance.
Closing
Regarding the Frames feature within Farcaster, many top influencers in crypto have expressed clear admiration and optimism. The founder of Electric Capital stated that this track will have more creations and products. Investors from A16Z even bluntly stated that the energy of Farcaster and Frames is akin to the impact of AJAX/open web in 2005 during the Web2 era.
VCs and developers are highly keen on this new idea. Institutions like DWF Labs and Variant have launched Farcaster Frames hackathons. Frames has ignited a new wave of social dApp innovation on Farcaster. Developers in the Farcaster community proudly call themselves Framers, and hundreds or even thousands of Framers have already developed many exciting works using Frames.
Decentralized social networking has always been a highly promising track, with multiple projects attempting to innovate at the data infrastructure, protocols, and application layers. We believe that the integration of decentralized finance and social networking will bring about significant changes and has vast prospects. Although Frames and many social applications are still in their early stages, we believe there will be a high level of interest and attention in this direction in a long term.