_iant Fund Lianchuang: Looking at Web3 social network from Lens Protocol

Author: Li Jin, Variant Fund Co-Founder & General Partner; Translation: Golden Finance 0x25

A decade ago, Linkin Park was the biggest band in the world — or at least the most popular music group on Facebook, with 56 million followers and 58 million likes. Facebook is Linkin Park's de facto landing page; they've used it not only to announce music releases and concert dates, but also to announce a 2013 video game.

Then Facebook changed its algorithm, as it often does, to maximize metrics that bring in higher revenue for itself. According to guitarist Mike Shinoda, Facebook told the band, "It costs the equivalent of a Super Bowl ad every time you want to post and reach 100% of your fans"; See.

Algorithms stand between artist and audience.

But Facebook and other web2 social media platforms have clearly declined due to algorithm tweaks and extractive monetization strategies. The advent of web3 means that value no longer needs to be accumulated primarily by social media intermediaries whose primary purpose is to facilitate connections. With web3 social networks, more value will be distributed to users and those who contribute the content that makes the network valuable in the first place.

**What is a web3 social network? **

Last December, when I looked ahead to 2023, I predicted that decentralized social networks would be the "next big thing." These platforms can operate in a variety of ways, but they share some common characteristics, including censorship resistance and user control over data.

Web3 Social implicitly leverages blockchain technology and tokenization, distinguishing it from federated models and other forms of decentralization. Whereas a web2 social business model virtually requires collecting user data to drive advertising and subscription revenue, web3 social can minimize or even completely eliminate platform disruption. In web3 social, the goal is to connect users and attract developers, then get out of the way as much as possible.

In February, I had the pleasure of hosting a Twitter Spaces discussion with web3 social graph protocol Lens Protocol founder Stani Kulechov and Lens users on how they beat traditional social networks.

For the uninitiated, Lens describes itself as "a user-owned, open social graph that any application can plug into". In practice, this means that you don't create a configuration profile - you mint yourself as an NFT. Likewise, all your follower relationships and content are represented as NFTs. The entire social graph is on-chain, including the act of unfollowing someone by burning an NFT.

Third-party developers have built dozens of apps on top of the Lens Protocol, including social media app Lenster; video-sharing platform Lenstube; and Phaver, a curation app that combines elements of Yelp, Pinterest, and Amazon listings.

Define the three characteristics of web3 social interaction

From the creator's point of view, Panelist defines three characteristics of web3 social.

**First, it is platformless. **Without a platform, no third party owns the content you create. Instead, you create it and you own it. By extension, web3 social is also censorship resistant, meaning the platform cannot delete or restrict relationships.

It was a fact, and even Stani was used to it. Recalling disagreements with others on Lens, Stani said his only recourse was to destroy the NFT and unfollow: “That was a really powerful moment because you actually realized that these profiles belonged to the user.”

Secondly, web3 social data is portable. As Shinoda discovered, Linkin Park doesn't own the relationship with its audience — Facebook does. However, Web3 has an advantage: it uses wallets, which create a direct relationship between users and creators, so you don't have to constantly rebuild your fanbase; even if social protocols disappear, wallets remain.

The end result is that neither followers nor creators are tied to one platform. XMTP Labs CEO Shane Mac said he was inspired to co-found XMTP Labs, a company that developed a protocol for web3 messaging to avoid the web2 disruption that befell Linkin Park. "It happens every time you build an audience on web2, and then you just keep building new audiences, and then you lose reach to those audiences over and over again," he said. "I think there's been a fundamental shift in the paradigm here, and what you're saying now is that if you have to use a single app to access your conversations or your network, or your relationships, you're not really have that audience."

Third, because it's web3, it's composable. Just as DeFi benefits from monetary Lego blocks, web3 social protocols gain value and utility through applications built on top of decentralized social primitives. "It's reminiscent of all the Stanford kids building apps on Facebook," says video creator Chris Comrie. However, while web2 platforms typically evolve over time from partnering with builders to competing with them ( As Chris Dixon wrote in 2018), but web3 networks are more composability-friendly because they are optimized for cooperation. (See Jesse's 2019 article "Past, Present, Future: From Co-ops to Cryptonetworks.")

Results better for creators and their fans

These combined features create new avenues for monetization.

The first we already know about: NFT collectibles. For example, Shinoda launched a mixtape NFT for his Ziggurats project on Tezos in 2021. For example, NFTs allow musicians to reject recording and touring processes designed to drain their funds. By selling directly to fans and repurposing royalties, artists will get more profit from their income stream.

Lens goes a step further by turning every post into a collection. Followers who decide to follow/collect/etc, are paid the same way fans do on Patreon, minus 5-12% platform fees and processing fees per transaction (cryptocurrency, not credit card).

Plus, creators aren’t the only ones who can make money — curators can too**. By reposting (or "mirriring") posts collected later, you can earn some income alongside the artist. It's a bit like rebate links, where sites add backlinks to Amazon and other retailers on their pages -- when someone clicks the link and buys an item, the site gets a small cut of the sale.

Those using the protocol can build tools that enhance monetization themselves. For example, Amplicata helps users earn rewards through mirroring, connecting them with advertisers. Composability also means there is no need to limit revenue to any one application. Content originating in one Lens app can be used elsewhere, enabling revenue sharing across apps.

The end result of web3 social is a greater likelihood of success, as creators now have the tools to monetize smaller fan bases.

Marlowe Brett, Phaver’s head of NFTs, said: “[Record labels] choose someone with a certain look or a certain person, and promote them, and all other artists who may not meet that certain standard will be marginalized,” citing a recent A conversation with musicians using Lens. “And I think artists are discovering, at least in terms of what they say, that there’s an ability to be completely authentic and completely themselves.”

In other words, creators can target more segmented audiences because they don't have to go through intermediaries to reach larger, more homogeneous audiences.

It's a natural outgrowth of my "100 Fans" argument in 2020, when I wrote that "the global popularity of social platforms like Facebook and YouTube, the mainstreaming of the influencer model, and the rise of new creator tools have Changed the bar for success. I believe creators only need to amass 100 true fans - not 1000 - and they pay $1000 per year instead of $100. Today, creators can effectively move from more Earn more money from fewer fans."

While the argument still applies to the web2 platform, it is better suited to Lens, which optimizes user-creator interaction, rather than platform monetization.

CHALLENGE REMAINS

While many Lens users are understandably excited about the opportunities that web3 social presents, Lens must address several pressing challenges in order to survive and thrive.

The first is the question that plagues many decentralized networks: “When will coins be released?” The rumored airdrop has prompted some to start using the protocol in ways that don’t add value but actually make the network less attractive to other users. Today, Lens-based apps are rife with spam and bot activity and low-quality engagement from airdroppers. Given the path dependence of social networks, this "network pollution" puts Lens' continued growth and vitality at risk.

Second, while I've discussed some of the shortcomings of existing social platforms, they have one thing that web3 social platforms don't: large user bases. To surpass the traditional web, web3 social must capture unique angles not possible on web2 platforms. Creator monetization, whether through NFTs or other methods, is a compelling value proposition, but web3 social also needs to lean toward providing a differentiated experience for regular users, not just creators. This could mean taking a financial or asset-first approach, allowing users to profit from their activities on the network.