The Farcaster SocialFi application has witnessed a steady decrease in user engagement since reaching its apex in the early days of February.
The platform’s daily active user count has plummeted by 60%, dropping to 16,000 from an early February high of over 40,000. This surge saw user numbers skyrocket fifteenfold in under a month, as per insights from Dune.
This burst of activity was sparked by the introduction of Frames, a feature that enables creators to embed applications and iframes directly into their posts, known on Farcaster as casts. However, the initial buzz surrounding this innovation has subsided.
This downturn in Farcaster’s engagement levels is somewhat unexpected, especially in light of the broader cryptocurrency market’s upswing. SocialFi, a fusion of cryptocurrency with social networking, had been heralded as a burgeoning trend within the sector.
It seems that the crypto community, particularly degens and traders, might be shifting their focus towards airdrops and meme coins, or perhaps the established social media giants are still the preferred venues for online interaction.
Declining Revenue and Interaction Rates
The decline isn’t confined to user activity alone. The platform’s daily earnings have also seen a downturn, barely crossing into four figures. On March 5, revenue stood at $288, a stark contrast to the $49,735 recorded on February 5th, as shown on a Dune dashboard.
Similarly, engagement metrics like reactions to posts have also diminished. A significant 63% of casts now receive no reactions at all, while 30% garner between one to five. Posts attracting more reactions than this represent less than 2% of total activity.
Drop in Friend.tech’s Popularity
Friend.tech, another SocialFi platform that gained prominence last year, has also experienced a marked decline in activity.
Operational on Base, Coinbase‘s Layer 2 network, Friend.tech is a Web3 social network that allows creators and their followers to interact through the sale and purchase of “keys” to X accounts, granting access to exclusive chatrooms.
Despite its explosive start in August 2023, which saw it quickly ascend to prominence within the crypto sphere and achieve $1 million in revenue by September, activity on the platform has significantly waned.
Transient Spike Due to Points System Announcement
The announcement of a new, entirely community-owned points system on February 4th briefly invigorated the platform. Transactions leaped from 2,400 on March 3rd to 8,800 the following day, with points trading at $3 on over-the-counter sites like WhalesMarket, indicating a temporary surge in interest.
However, this initiative has not been sufficient to rejuvenate Friend.tech’s earlier vibrancy. Recent days have observed a noticeable decrease in transactions, with counts around 3,500 on March 5th and just 1,000 by March 6th.
Data from a Dune dashboard indicates that the platform’s usage has stagnated after the last two activity surges—one in October and another in December 2023.
Despite an uptick in prices, SocialFi platforms lag in capturing and maintaining user interest, leaving enthusiasts hopeful for a turnaround.
Lens Protocol: A Beacon of Success
In contrast, the Lens Protocol has emerged as a vitalizing force within the SocialFi domain.
Following its transition to a permissionless model on February 27th, Lens has experienced a notable increase in user engagement. Activity nearly tripled the day following its launch, with post numbers soaring to 10,498 from approximately 3,700, maintaining an upward trajectory thereafter.
Lens Protocol has also achieved commendable success in revenue generation, as noted by Aave founder Stani Kulechov. On March 4th, he shared on X that Lens had generated $500,000 in revenue in less than a week since becoming permissionless, largely through profile mints.
Lens has collected $500k in revenue in less than a week from profile mints, directly into the protocol treasury. Apps have also earned above $100k.
That's a great start for a decentralized social network. pic.twitter.com/9xJKmwAg1E
— Stani^ (@StaniKulechov) March 4, 2024
