How should Farcaster, which nurtured the crypto "Pinduoduo" and is even endorsed by Vitalik, be played?

Author: Rebbeca Ren

According to data from L2BEAT, the transactions per second (TPS) of Degen Chain increased by 62% on April 18, reaching 35.7 TPS, setting a new record for the Ethereum ecosystem.

Interestingly, while recording a record TPS, the average value of each transaction on Degen Chain is only $0.27, far below Ethereum's $1867 and Base Chain's $170. On the other hand, the fully diluted market cap (FDV) of the $DEGEN token has also grown from initially over a million dollars to around $750 million today.

This performance is reminiscent of Pinduoduo: by offering sufficiently low product prices and a simpler shopping experience, it served more "budget-conscious" consumers, attracting many new users who had never used e-commerce platforms before, thus achieving economies of scale, with its market cap rising from $20 billion in 2018 to $190 billion today.

Whether Degen Chain has the potential to replicate Pinduoduo's success in the cryptocurrency space remains to be seen, but the Farcaster that nurtured it definitely deserves more attention.

1 What is Farcaster?

In short, Farcaster is a protocol based on the Ethereum Layer 2 Optimism mainnet, launched by two early Coinbase employees, for building decentralized social applications. Although Farcaster may still be unfamiliar to some, it has become one of the hottest topics in the U.S. crypto circle over the past few months.

Warpcast is the first client application launched by the Farcaster protocol team and is currently the largest application under this protocol, with its monthly active users (MAUs) growing to 68,000 in April. Warpcast is tightly integrated with the Farcaster protocol and data: all Warpcast accounts have a Farcaster ID and store their generated content in the Farcaster hub.

Source: Dune

Warpcast is like a combination of Twitter and Reddit, allowing users to post and join channels of interest for discussions, and it also supports the integration of mini-programs (Frames) for activities such as minting NFTs, claiming tokens, and conducting transactions.

The meme coin $DEGEN was born from the vibrant Degen community on the Warpcast platform. Initially airdropped to users in that community, it has now become the most mainstream tipping token on Warpcast. Warpcast users are also given a daily quota of 8 $DEGEN coins to encourage content creators and increase interaction among users.

As the number of holders increases, the $DEGEN team has launched the Ethereum Layer 3 network (L3) Degen Chain to issue meme coins, which also points out a path for meme coins from "no use case" to "use case," from "no value" to "value."

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In addition to Warpcast, there are many more use cases under the Farcaster protocol:

Meanwhile, its ecosystem continues to expand. On May 2, the Ethereum-based decentralized blogging protocol Mirror announced a merger with its former competitor Paragraph. The merged entity will be led by Paragraph founder Colin Armstrong and will operate on the Farcaster protocol.

The Mirror team will continue to operate as an independent company and plans to launch a platform called "Kiosk" based on the Farcaster protocol that integrates social and crypto asset trading.

2 How to Use Warpcast?

1. Unlike Twitter, which is filled with spam and ads, Warpcast has set a higher entry barrier. To use Warpcast, each new user needs to pay a fee of $5. If entering through a friend's invitation link, the fee is only $3. This fee is mainly used for data storage and spam filtering, ensuring the platform's cleanliness and data security.
2. Purchase Warp. After downloading the Warpcast app from the App Store, you can purchase in-app currency Warp. This currency will be used for specific operations, such as creating your own channel. The cost to create a channel is 2500 Warps, equivalent to $25/year. If you do not have such needs, there is no need to purchase Warp.
3. Post content and interact: Once you become a user, you can freely post content and interact with other users. If you need more posting volume or storage space, you will need to pay additional fees. Additionally, some channels require users to pay a certain amount of Warp to post and comment.
4. Invite friends: Warpcast also encourages users to expand the community by inviting friends. For each new user you invite, you can earn a reward of 50 Warp, which can be used to pay for services on the platform.

By following these steps, you can not only enjoy an ad-free social experience but also ensure that the community you are in maintains high quality and activity. Warpcast provides users with a purer and more focused communication space through this unique mechanism.

Warpcast does not require you to have a cryptocurrency wallet to register and use it, but if you want to use advanced features like tipping, you need to bind your wallet to your Warpcast account.

3 Who Should New Users Follow?

1. Vitalik Buterin (@vitalik.eth), of course, is the first on the follow list.

2. Dan Romero (@dwr.eth) and Varun Srinivasan (@v), the two co-founders of Farcaster.

3. Jesse Pollak (@jessepollak), the creator of the L2 Base Chain launched by Coinbase, is also the second most followed account on Farcaster. Base is one of the main channels on Farcaster, with over 219,000 followers.

4. Li Jin (@li), former a16z partner and current founder of Variant Capital, has been involved in projects like MagicEden, Mirror, and Phantom.

5. The Degen channel (/degen), which nurtured $DEGEN and Degen Chain, has 78,300 followers.

6. The Farcaster channel (/farcaster) hosted by Dan and Varun has 192,000 followers. If you prefer Chinese communities, you can follow the Friends Channel (/hpgybtc), which has over 800 followers.

7. You can also follow two chefs from Crypto Kitchen, Me in New York (@Degenmeow) and Jean in Shanghai (@jeanchen). We will occasionally share insights on cryptocurrencies, daily cat life, meme images, or host events.

4 Is Vitalik Optimistic About Farcaster? Will Friend.tech Ignite Another Wave, Reviving the Heat of SocialFi?

On May 3, the Web 3.0 social platform Friend.tech, which was all the rage last summer, airdropped $FRIEND tokens to its users, and shortly after its launch, the price soared to $167, significantly impacting the price of the leading meme coin $DEGEN on Farcaster.

Discussions about whether the SocialFi craze has returned have surged. In fact, combining social networks with decentralized finance is crucial for the mass adoption of cryptocurrencies:

For example, it is easier to use, and its inherent social attributes can attract more users to join and understand cryptocurrencies; using tokenization to reward users' contributions encourages participation and investment in cryptocurrencies; leveraging blockchain-based governance tools to strengthen community building and create a collaborative and transparent environment, etc.

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Although attempts in the SocialFi space are frequent, most are short-lived, and how to retain users remains the key to achieving long-term success.

Friend.tech, which has long been labeled as "speculative," saw a sharp decline in platform activity months after reaching a fever pitch last year, and it has yet to recover. The recent airdrop of tokens, while generating temporary attention, quickly saw the price plummet from $167 to around $2 due to insufficient liquidity and a wave of sell-offs.

Vitalik has previously criticized Friend.tech, believing that its replacement of genuine social interaction with financial speculation is the reason for its failure. He argues that, similar to GameFi, SocialFi should focus on "fun" rather than "speculation."

At the same time, the user engagement, content quality, tipping mechanism, and various experiences provided through mini-programs (Frames) on the Farcaster platform have left a deep impression on Vitalik. He is optimistic about Farcaster, predicting that the platform will not be eliminated from the market in the short term, and emphasizes the importance of genuinely interesting content and community building.