Traditional social products are often considered fully packaged content feeds and communication apps. At their core, however, they are primarily identity products. They provide the foundational connection between a person’s digital persona and their data, content, and social connections. The person-to-content linkage is foundational to digital communication and yet, it is monopolized, monetized, and manipulated via sugary feeds built by a select few closed platforms.
Decentralized Social (DeSoc) protocols are re-architecting digital identity to be user-owned and governed. With DeSoc, users are free to trustfully communicate and construct applications without manipulation or censorship for profit’s sake. Before this can happen, DeSoc networks need to achieve a minimal level of network size and overcome the current centralized platform paradigm.
The traditional social platforms have been nearly impenetrable competitively due to advantages gained by closing external access to the rich sea of profile and content relationship data known as the social graph. While profitable for the platforms, locking access to the social graph creates three core problems for creators and tangential businesses:
• Disjointed creator monetization — Creators often are forced to use tools like email lists, blogs, and partnerships in addition to social media in order to adequately monetize their content. While the total creator market grew from approximately $14 billion in 2021 to over $100 billion in 2022, creator earnings are limited due to the added user friction of having to convert across tools and platforms.
• Disproportionate platform value share — While over $230 billion is earned by social platforms largely from advertising, content creators are only earning roughly $6.5 billion in revenue share. For example, on YouTube, which has by far the most generous revenue share, nearly 98% of creators would not meet the poverty line in the US on advertising revenue share alone.
• Concentrated creator revenue distribution — Because social algorithms are optimized for predictable viewership, only the uppermost creators with predictable appeal earn the vast majority of advertising revenue. Without developer access to the social graph data, there is no subsequent business model innovation that would support a creator middle class.
Given the large revenue imbalance between platforms and creators, there is a significant incentive for technologies to bridge the gap and for creators to adopt them. With an open social graph anyone can build upon, DeSoc poses a viable threat to incumbent social platforms whose competitive moat arises from their closed architectures.
DeSoc Architecture
DeSoc protocols, like traditional social, provide the core linkage of profiles to digital content. Profiles are typically represented as NFTs, and the content published, whether its posts, videos, or comments, is all tied to the core profile either on- or off-chain. Since all of the profile and content relationships (social graph) are open and readable by developers, anyone can build front-end applications and features on top of the social graph. This breaks apart the tech stack of traditional platforms and significantly expands the potential for innovation.
In the same way that increasing the contact surface area of two chemicals produces faster, more bountiful reactions, increasing the surface area between developers and technology multiplies the potential for new applications and features.
With the increased development surface area, numerous projects have spun up to tackle more than just the core social graph. They are building every facet of consumer applications ranging from developer infrastructure like video transcoding to features like messaging and search.
While still early, these projects are largely composable and are thus rapidly culminating toward being viable consumer application infrastructure.
