What if we could have full transparency into how social media companies make decisions? We believe that would allow us to solve a lot of the existing problems with the industry today. That's why we're proud to announce our first State of Decentralized Social report: A quarterly run-down of everything the DeSo Foundation is doing to decentralize social media. Learn more about the DeSo blockchain and our mission to decentralize social media at deso.org.
In this report, we detail the launch of the first ever open-source feed algorithm, the launch of the $50M Octane Fund, the launch of the breakthrough Diamond app, and much more.
The next major social platform will be decentralized, and it will be built collaboratively. Together, we will iterate faster and more effectively than any centralized social media company ever could. The State of Decentralized Social is a major step in that direction, allowing us all to align on our path forward, and we look forward to hearing your feedback. If you see something that you think is important that isn't mentioned here, please let us know by tagging #DeSoFeedback on any DeSo app, such as Diamond.
The Octane Fund
- We announced a $50M fund dedicated to funding developers building on DeSo. See announcement here. See my post here. Also had coverage in Bloomberg, CoinDesk, Blockworks
- Since launch, we have had over 100 projects apply, all of which have demos, and over a dozen of which look especially promising. We are still going through all the applications, and we are also contemplating a more decentralized process for funding companies.
- Our strategy with the Octane Fund is to create a more decentralized structure for social media, with thousands of independent developers building on a common blockchain backend, rather than a top-down company managing a handful of apps via central planning.
The launch of Diamond
- We announced Diamond last week as the first $1M investment from the Octane Fund. See announcement here. Try the app at diamondapp.com.
- Importantly, Diamond Labs, the company that runs Diamond, is an independent entity run by Steven Zeller, formerly a senior software engineer at Foundry.ai and a contributor to the DeSo open-source codebase. Steven's launch is the latest of over 100 projects building on the DeSo blockchain, but it is significant in that it is a direct competitor to BitClout that is targeted at the mainstream.
- The future of DeSo is that the DeSo Foundation will focus on developing the DeSo blockchain, while an independent developer ecosystem iterates through the combinatorial explosion of product possibilities. Every app that launches acquires users and content that can then be leveraged by other apps building on DeSo.
- Importantly, as long as a single app built on DeSo succeeds, a network effect around users and content can form that all other apps in the ecosystem can utilize. Note the asymmetry between DeSo and traditional social networks: Whereas traditional social networks are vulnerable to new competing apps that threaten their content monopoly, DeSo is anti-fragile, growing stronger and stronger with each new app that chooses to build on it, because its content is a utility that everyone benefits from.
- The feedback on Diamond, especially with influencers and higher-profile creators, has been very positive. The biggest "wow" moment is when they realize just how easy it is to buy or sell their first NFT, since they're used to installing a Chrome extension, writing down 12 words, dealing with hundred-dollar gas fees, and waiting several minutes between each transaction. In contrast, Diamond’s one-click sign up is as easy as registering for Instagram (no need for seed phrase anymore). Because NFTs are familiar to everyone, and because we think Diamond presents a 10x over the leading products in terms of mainstream usability, we expect to see many large creators come for the NFTs and stay for the creator coins and diamonds in the coming weeks.
The rise of DeSo NFTs
- NFTs on DeSo have exploded in popularity. The volume of NFTs sold passed $1 million last week, with Spookies, Desomon, and Cloutpunk leading the charge. This has gotten the attention of bigger artists, and there are now some fairly significant launches dropping in the coming weeks. The most anticipated is PixelPirates, but there are also several yet-unannounced projects in the works.
- Spookies in particular presents a very interesting case study, having launched a generative collection last week. They did something unique, creating a special Telegram group for people who bought $50 of their coin where you could get access to the NFT drop an hour early. This created a rabid following for their project, and a space for collectors to chat in a way we hadn't seen before. It also illustrated an ideal example of using creator coins as a utility to gate access. Importantly, we didn't instigate any of this, they did it all themselves organically.
- Lastly, did you notice that we weren't linking to BitClout in any of the links above? We were linking to polygram.cc and nftz.zone. They are two new DeSo nodes that launched recently focused on NFT content. We also saw supernovas.app launch as an NFT-focused node and feed as well. The launch of all of these products not only shows how high-quality third-party apps can be, but also illustrates the power of a decentralized developer ecosystem: The DeSo Foundation team would never have built something like polygram.cc in-house, but because all the content is open, it happens organically.
The first open-source algorithmic feed
- Every node operator now gets access to an algorithmically-curated hot feed that they can tune however they want, with the ability to adjust time decay and boost the impact of certain creators' actions. Diamond is the first to showcase this functionality, and we believe it is the first 100% open-source feed algorithm ever. What's interesting is that it is also heavily resistant to gaming because it uses coin price as its main signal.
- With the current tools node operators have to tune their hot feeds, verticalized feeds can already be constructed with minimal effort. For example, to have a sports-focused feed, all one has to do is boost the impact of sports influencers on their node via their admin panel. One can similarly launch a politics-focused feed or an academic-focused feed with minimal tuning of the core open-source hot feed algorithm. No technical expertise required.
- Importantly, we believe this is the first feed algorithm ever to use the amount of wealth staked on someone as a signal, and the results have been pretty incredible. See for yourself on https://diamondapp.com, which has virtually zero manual curation.
The referral program
- We are finally starting to roll out our referral program. We piloted a small one on BitClout and Diamond a few days ago, and it allowed us to work out a lot of kinks. We are still analyzing the data from it, and should have concrete numbers soon, but early analysis shows that the pilot program acquired a significant number of real users at reasonable cost, which is very promising because there are many more optimizations we can make to it.
- One issue we experienced with the referral program rollout was that scammers in certain countries with click farms were able to game the anti-bot check. However, this was limited by a cap on the number of referrals, and so it didn't result in significant issues (each person got a maximum of three referrals). After some discussion with other senior people in the crypto space who have implemented similar programs, it seems like solely whitelisting certain countries like the US, Canada, UK, etc... is generally how people solve this issue. It is unfortunate that this is what we have to do for now, but implementing this change has thwarted the scammers for now, and we are planning to launch round two of our program shortly. If you have feedback on how we should refine the referral program, comment here.
- If bots can be thwarted and kinks can be worked out, we expect the referral program to drive significant growth in usage going forward, similar to how PayPal or Venmo scaled.
- Nader, the head of the DeSo Foundation, recorded his first podcast with James Beshara at Below The Line. It's long, but goes into all the details of our vision. He will be on with several others next week as well.
- We've been doing a very weak job of this. We have extremely active Discords and a highly-engaged community, and yet we don't have anyone from the team with deep experience on how to manage it. Our hope is that we can hire someone very talented to fill this role full-time. If you can recommend anyone with deep community management experience please tag #DeSoFeedback on Diamond App.
This list is not exhaustive, but below are some high level priorities that we're excited about:
- The thing we're most excited about is all of the innovation that is happening outside of the DeSo Foundation core team, with several high-profile projects launching in the coming months. We will be introducing you to some of them soon.
Proof of stake
- We have been researching *every proof of stake blockchain in existence* to develop a unique proof of stake proposal that we think will work best for the decentralized social use-case at scale. We expect to announce our proposal in the coming weeks, with implementation taking about a month or two of solid all-hands-on-deck effort to transition.
DRC-20 (aka an ERC-20 standard on DESO)
- A couple of devs have expressed the desire for a more flexible coin type that is not subject to a bonding curve. This is low-lift, and should enable a lot of new economic models for devs.
Bridges to other smart contract platforms
- Bridging DESO to ETH and other blockchains is a top priority. This will allow DESO to be used in major DeFi applications like Uniswap and Compound. Once we bridge DESO, it is easy to also bridge creator coins, enabling creators to e.g. take loans against their creator coin holdings and earn yield.
- A few weeks ago we launched the ability to index all of the blockchain data into a SQL database. This has been by far the most popular feature among developers, and the biggest unlock in terms of what people have been able to build. This is still in beta mode, though, and the goal is to bring it to a point where you can run a production node off of the SQL store in the coming weeks.
Various protocol improvements
- Many NFT artists and node operators, including PolyGram.cc and nftz.zone have expressed a strong desire for a "buy now" feature for NFTs, and a time-based auction as well. Similarly, artists want to be able to easily "split" NFT earnings. All of this will be integrated at the protocol level shortly.
- There has also been interest in a way to express "dislike" on a post, which will also be integrated into the protocol level shortly.
- A proposal for an alternative decentralized verification process we call "associations" will be announced soon. Verifications are one of the few social primitives that should be on-chain but aren't yet.
- On the scaling side of things, we are starting work on transitioning to a balance model and implementing warp sync, as described in our simplified scaling roadmap. These improvements will upgrade the throughput of the DeSo network by orders of magnitude, allowing it to handle approximately 1,800 posts per second while remaining fully-decentralized. For reference, Twitter averages 6,000 posts per second.
If you see something that you think is important that isn't mentioned here, please let us know by tagging #DeSoFeedback on any DeSo app, such as Diamond.