Farcaster, an Ethereum Layer 2 Optimism-based decentralized social protocol, has seen its total revenue surge to $600,000.
The platform’s rise has been likened to FriendTech, another decentralized social network, which attracted a lot of users initially until it grappled with high fees that led to its failure.
Farcaster’s Growth Surges with Frames Integration
Farcaster initially caught users’ attention in early December 2023 and saw a modest increase in users paying for platform storage.
The second attention wave occurred in late January and peaked in early February. During this time, there was a surge in user signups, daily user activity, and posts, primarily driven by the launch of Frames on January 29, an in-app engagement tool.
Frames have brought about native monetization within the app. Users can offer an NFT to another Farcaster user if they follow the original poster’s account and repost their Frame with this feature. Hence, the excitement of obtaining free NFTs and the possibility of an airdrop have brought more users from Discord and Twitter.
Unlike most social platforms, Farcaster charges ongoing storage fees for its users to host the data generated daily to create revenue. This storage fee is $5 per year for 5,000 posts, 2,500 reactions, and 2,500 follows.
A portion of these fees is allocated to the platform, while some are utilized to cover transaction fees and process credit card information. Clients building on Farcaster can also charge their fees. On Warpcast, the posting fee is $0.01 per post, although many reward mechanisms provide free posts.
While there are several rationales behind implementing fees per post, the main one is preventing spamming activities to create a more authentic and meaningful interaction environment that is attractive to users.
Farcaster Daily Active Users Skyrocket
According to data from Dune Analytics, the number of daily active users on the Farcaster network surged from approximately 5,000 on January 28 to over 172,000 today.
Simultaneously, the number of new daily “casts” increased, surpassing 2.9 million today, a significant jump from 200,000 casts on January 28.
Meanwhile, the last few weeks have seen a huge portion of Farcaster users transition to using the Coinbase-built Base network for on-chain transactions, peaking at 64% of transactions, as per Dune Analytics data. The move has been fueled by low network fees.
In addition, the background of Farcaster co-founder Dan Romero, a former Coinbase vice president, and Jesse Pollak, current protocol lead at the exchange as one of the platform’s most popular users, may have further driven the shift.