Gradually, then suddenly. That's how it's felt to be involved with the decentralized social movement the past few months. Now, more than ever, it feels like we are at an inflection point, with the dominance of a new disruptive category right around the corner: The Decentralized Social category.
In this post, we'll reflect on everything that's happened in the Decentralized Social space, and show you why the "flippening" of traditional social media companies (‘TradSo’) in favor of blockchain-based solutions like DeSo may happen much sooner than most anticipate.
If you or anyone you know wants to get up to speed on the DeSo movement, this is the post to read!
If you're finding yourself having trouble explaining some of the more nuanced aspects of DeSo to your friends, you might also enjoy checking out our DeSo Cheat Sheet.
And in case you missed it, check out Nader's podcast with My First Million and our first ever Twitter Space!
DESO is Now Listed on Coinbase
73+ million people got access to DESO for the first time via Coinbase on Tuesday, 12/14! The significance of this listing cannot be understated.
With the listing, everything we do has 10,000x the impact for the same amount of effort, thanks to Coinbase's tremendous reach. Every announcement, blog post, launch, etc. can now activate a much wider base with ease. It also opens the door for institutions to get involved with DESO.
We've also seen a snowball start to roll. All other exchange listing conversations have been fast-tracked, and the perceived legitimacy of the project has skyrocketed.
To list on Coinbase as a layer-1, you have to pass incredibly rigorous compliance checks and decentralization checks. Your project also has to be important enough to make it worth the heroic effort required (over 100+ people involved across both sides).
With this listing, DeSo joins an exclusive club of heavily-vetted, highly-compliant layer-1 blockchains, and we're just getting started.
Unprecedented Developer Traction
In spite of only being up for just a few months, DeSo has an unprecedented list of over 200 apps that are building on the blockchain. Altogether, we estimate the number of developers building on DeSo right now to be in the thousands, and we're only nine months in!
To us, this fact really underscores the power of web3-- it would be virtually impossible for a traditional company to scale to this many contributors this quickly. This is the power of moving from a centrally-planned model of development to a decentralized one.
Some of the top apps by engagement are diamondapp.com, polygram.cc, nftz.zone, prosperclout.com, and cloutfeedapp.com, which have nearly all surpassed bitclout.com in terms of usage. We're also noticing that DeSo can support much more than the Twitter-like interface that BitClout pioneered, extending to NFT marketplaces, photo-centric apps, trading apps, and more.
Most interestingly, your data is fully portable across all DeSo apps. A post in Diamond shows up in Cloutfeed, and an NFT minted on nftz.zone shows up in polygram.cc, wollo.cc, etc. This portability of users and content makes it so that if a single killer app emerges, all of the users and wallets that this app bootstraps become instantly accessible to all the other apps on the network. This is similar to how early DeFi apps built a network effect around Ethereum that was then utilized by Compound, Uniswap, etc.
A single killer app on DeSo strengthens all existing apps and attracts developers in a positive feedback loop that doesn't exist with TradSo.
But seeing is believing. Below is a list of some of the more interesting apps that have emerged over the past few months (not including about a dozen new projects that we've seed funded). Give them a try and see for yourself!
Popular analytics tools:
Coin-focused trading app:
Search engine built on the DeSo blockchain. This one is pretty cool to explore:
A decentralized advertising project that's pretty interesting:
More comprehensive list of apps being built on DeSo:
And many more launching soon!
Blue-Chip Octane Fund Investments
Until recently, none of the apps in the list above had received funding from us. They all came up completely organically, and most raised money from outside investors.
However, to supercharge the ecosystem, we announced a $50 million fund called the Octane Fund to provide extra funding to ambitious projects in the ecosystem.
Since announcing the Octane Fund, we've had over 150 applications, and we were shocked by the quality of the founders and their products. Blue-chip backgrounds and strong prototypes were common, and we realized from our conversations that our high-quality APIs and documentation, as well as DeSo's unique ability to scale social apps, were attracting many founders who either weren't interested in other chains (due to not wanting to learn Solidity/Rust) or due to having investigated the other chains and concluded their projects weren't feasible on them.
This is an important point to emphasize: DeSo's unique advantages when it comes to storage/indexing of content made it so that we were almost never competing with other blockchains for talent!
We were so impressed with the talent and projects that we decided to allocate ~$800K equity-free development grants to ~30 teams, and to fund about a dozen with DESO SAFE notes that align teams with the DESO ecosystem.
The SAFE notes we're using to fund teams are customized to denominate half of the team's funding in DESO, with capped downside in the event that DESO goes down in value. This effectively wraps a DESO call option into their funding, which is an interesting alignment tool we haven't seen before (but that we're very proud of designing).
Overall, we'll be allocating over $11 million in the first round of the Octane Fund, and we think the caliber of the founders and projects we're funding will make it the envy of Web3.
Additionally, some of the most ambitious DeSo apps we’ve seen yet will launch in Q1 and Q2, and we can't wait to see what comes of the seeds we've planted thus far.
Marketing and Community Management
In our last State of Decentralized Social, we mentioned as a Lowlight how we wanted to improve on Community Management. Boy did we!
Since we hired Edelman, we've been investing heavily in conversations with reporters, and this is starting to pay off. We have gotten numerous organic mentions in articles by reporters who have become interested in our mission. We are noticing that the organic interest in what we're doing is growing rapidly, as we have a uniquely mainstream narrative for a crypto company, and we sense that we are close to escape velocity, especially with the Coinbase listing in the bag. Below are some of the recent press mentions:
- TechCrunch profile on Nader
- CoinDesk Oped
- WSJ front cover piece discussing DeSo
- Inclusion in the Messari 2022 report (organic)
- Forbes daily cover mention (organic)
- NYT front page mention (organic)
We hired Alex Valaitis, Meghan Vita, and Dylan Jagger Lee to run strategy & operations, interface with developers, run our socials, oversee our Discord, organize our first-ever Hackathon, and much more.
In the short time since we brought on this team, our narrative has been spreading far beyond our early community. Our social media posts have started amassing hundreds of thousands of organic views, and DeSo is now firmly a part of the conversation on all platforms.
The next step for the team is to bring on a marketing firm or to hire a professional marketer so that we can begin running ads for our core content. This will take our visibility to the next level, and hopefully kick off an organic cycle similar to what Solana and Avalanche have managed to achieve.
Cutting-Edge Protocol Improvements
Soon, we will be releasing a cutting-edge Proof-of-stake (POS) proposal that improves dramatically over the current state of the art in multiple ways. In particular, it introduces the following breakthroughs:
- DeSoSum: We have developed an O(1) state checksum that requires 0 extra storage while all other blockchains require merkle trees which are O(log N) and require roughly doubling the size of the state in order to cache the intermediate merkle results.
- DeSoRand: We have developed a new mechanism for on-chain randomness that uses multi-party communication to solve the problem in an efficient way that; to our knowledge, no other blockchain has figured out yet.
- HyperSync: The checksum mechanism allowed us to develop a much faster blockchain syncing mechanism we call hypersync. In particular, hypersync utilizes the checksum to avoid having to validate transactions before a particular checkpoint.
- HyperTx: The specialized nature of the DeSo blockchain makes it possible to parallelize transactions in a way that is only possible if one knows the schema of each transaction type. We call this new transaction parallelization mechanic HyperTx.
We will also be innovating on many aspects of how data is stored on the DeSo blockchain going forward, including seamlessly sharding the state across multiple disks and multiple nodes in order to be able to handle petabyte scale in the long-term without compromising on decentralization.
DESO DAOs and Smart Services
In Q1, we will be rolling out two initiatives that we believe will significantly alter the course of crypto and its impact on the mainstream.
We will be introducing this new framework in Q1, and we're calling it ‘Smart Services’. We think smart services have the potential to render smart contracts effectively obsolete, and we can't wait to see what the hundreds of teams who are already building on DeSo will be able to do with them.
In talking to founders all over the world as part of our work with the Octane Fund, we noticed that existing corporate structures leave a lot to be desired. Founders everywhere, especially those that are non-US, have no idea how to incorporate without first talking to a lawyer. Even when they do engage, traditional corporate structures are ancient, involving documents few understand and depriving everyone of liquidity for years.
It became clear to us from these conversations that the best founders in 2022 are going to look to new ways of fundraising that are effortless to set up and quick to get liquidity on. But nobody offers a seamless experience with great UX for this use-case.
After much research in the DAO space, we are convinced that an extension of the creator coin concept applied to companies will be a smash hit with founders. Put another way, we're convinced that a new kind of fundraising app built on DeSo will become the "Stripe of DAOs" by putting a super clean and simple UI over the primitives built into the DeSo blockchain.
We have invested in a couple of projects that we're very excited about in this space, we're making adjustments to the underlying blockchain to support them, and, with the help of smart services, we think they have the potential to totally upend how companies are formed and funded.
The Future of Web3
As we look to the future of Web3 and how it's going to impact things, it's hard to imagine how we could be better-positioned than we are today. DeSo is a layer-1 that is perfectly positioned to disrupt a whole new category of applications, namely social applications (and more broadly infinite-state applications). And now, DeSo enters an exclusive club of highly-vetted layer-1 blockchains that have the reach and legitimacy that comes from being listed on Coinbase.
The incentives to build on DeSo have never been stronger, we have an army of amazing developers building on the platform, and all it takes is one killer app for DeSo to become a total no-brainer for all subsequent Web3 projects. This is without even considering groundbreaking initiatives we're rolling out in Q1 like DESO DAOs and Smart Services. And we'll never stop innovating or executing. In fact, we're just getting started.