Once regarded as the "Twitter killer," the decentralized social protocol Farcaster is currently experiencing declining revenue. According to data from the Dune Analytics dashboard created by @pixelhack, Farcaster's revenue in October only reached nearly $16,000, with daily earnings remaining sluggish, and only a few days reaching four figures.
Farcaster's cumulative protocol revenue surpassed $2 million on July 1, but subsequently began to slow down, with total protocol revenue for the third quarter amounting to approximately $320,000, a 70% decrease from the $1.12 million in the second quarter.
User activity on Farcaster has also declined since peaking at the end of June, with daily active users dropping from a peak of 71,000 to around 33,000.
Farcaster is a decentralized social protocol built on Ethereum, founded in 2020 by former Coinbase employees Dan Romero and Varun Srinivasan. It has received investments from companies such as Paradigm Ventures, a16z, and Haun Ventures, totaling over $180 million.
Farcaster allows users to have more control over their profiles and enables developers to expand the platform through a Mini App called "Frames." It became a focal point in the Web3 space earlier this year. The main client for Farcaster is the social application Warpcast, developed by the Farcaster team, which adopts a design similar to existing social platforms like X, allowing users to write posts (casts) and perform other functions, such as minting NFTs and claiming tokens.
Some members of the crypto community are discussing the reasons for Farcaster's decline. An X user named @TropicVibes stated that it is difficult to "create a better mousetrap" and profit from it. If alternative options only provide slight improvements, people will stick to what they are familiar with.
@TropicVibes continued to point out: "People see it as similar to X, so why not just use X? I love web3 like everyone else, but developers overestimate people's willingness to change."
Another X user, @justz_eth, shared two main reasons for not switching to other social platforms like Farcaster: first, many global leaders and influential figures are using X, such as presidents, Elon Musk, and CEOs of major companies. Second, he has already accumulated a certain amount of content on X and does not want to rebuild his achievements and presence on other platforms.
Although @justz_eth acknowledges the benefits of decentralized relays, such as resistance to censorship, he believes that the most likely way for new social platforms to succeed is to target a new generation of users, as they have not yet accumulated much content online and are willing to explore the benefits of emerging platforms. Another possibility is that a catastrophic event occurs on the X platform, which could trigger a mass migration to other platforms; relying solely on token incentives is insufficient to drive such a shift.