APR 28, 2023 • 7 Min Read
Traditional social media companies have had a tenuous relationship with crypto. Facebook’s web3 ambitions began with a permissioned stablecoin called Diem (aka Libre). That project was sold for parts in 2022. Instagram started strong by allowing users to display NFTs they have collected. Last month, the platform abruptly shut down support for NFTs. This month, Twitter announced it will allow users to trade crypto with an eToro integration. With Elon at the helm with his super-app vision, perhaps this move will break the streak of bad luck.
Meanwhile, crypto-native social media is revving up to bring the competition to web2 social media. Lens Protocol has seen a substantial spike in monthly transactions and users since the beginning of the new year, recording an all-time high of 4.2m transactions and 125k users in February 2023. This is even more impressive, considering the protocol is still in closed beta with an allowlist for new user signups. Potential users can still buy Lens IDs from secondary markets, but they will be taking over an existing account with existing on-chain history.
Lens Protocol is an open-source social media graph, powered by the Polygon proof-of-stake blockchain. The primary advantage of an on-chain social network is that users can own their data. On Facebook, users create content and engagement that is recorded by a permissioned, centralized database owned by Meta Platforms. On Lens, users create content that is recorded on-chain and can be plugged and played into any application built on top of Lens.
A user’s journey into the Lensverse begins by minting a profile NFT. This is the token that records all their content and engagement. Posts (or publications) created by the user can take the form of text, video, or image. Comments and mirrors (the parallel of retweets for Lens) are also treated in the same manner as posts, except that they also reference a base post linked to the comment or mirror. When users follow another account, they are issued a follower NFT, which allows creators to limit comments and mirrors to only their followers.
We cover Lens in further detail in our report on DeSocial protocols, published exclusively for Delphi Pro members this week here. Here’s an edited snippet from the report, explaining the architecture of Lens:
“At the core of Lens Protocol lies ERC-721 profile NFTs. Contrary to Nostr and Farcaster, in Lens, every social graph action is an on-chain transaction on Polygon. Publishing updates to a profile NFT requires gas, but a lot of apps use their own relays or other solutions to offer a gasless experience. Publishing data to the NFT means that users are always in control of their social graphs and that migration to new services is trivial as all the user data and experiences are in the NFT itself.
Content published to a Lens NFT is called a publication. Publications include posts, comments, and mirrors (retweets). It’s essential to note that Lens doesn’t store the content itself in the NFT — instead, when a user posts content, Lens posts a ContentURI to the NFT that points to the content. The ContentURI can point to arbitrary data stored on decentralized services like Arweave or centralized services like AWS. As such, the NFT is more of a record of the content than the content itself.”
New profile NFT mints have slowed down since the beginning of the year. Since the all-time high of 22.8K profiles in June 2022, the count is down by more than 80% to 3.9K profiles last month. However, engagement by users is setting new records. From 18-20K engagements (posts, comments, and mirrors) at the beginning of the year, engagement reached an all-time high of 168K at the end of last month. An increase in mirrors (retweets for Lens) constitutes a substantial chunk of this increase in engagement.
Lens Protocol follows a creator-first strategy, part of which includes making content monetization easy. Focusing on onboarding creators is a clever way to bootstrap growth. All it takes is a few prominent creators to join Lens and user growth could explode when signups are opened to everyone. Creators can allow other users to mint (or collect) their posts and comments as NFTs by setting a certain amount of time or a certain number of mints for collection. Since the beginning of this year, collects or mints have also spiked, reaching an all-time high of 67.8K collects in February 2023.
To handle all of this growth, Lens recently announced a scaling solution that will process most transactions off-chain, relying on its data-availability layer. It will still have a verifier component to help validate user transactions on-chain. Titled Bonsai when announced, the team has since rebranded this initiative to Momoka, citing potential trademark issues with a similarly named crypto project.
As our recently released report concludes, on-chain social networks like Lens are in the innovation trigger phase of the hype cycle. As one of the most promising and innovative projects in the space, we’ll be monitoring the growth of Lens closely, especially as they gear up to open new user signups to everyone and handle the explosive growth that is sure to follow.
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