Farcaster, the Web3 social network platform, has seen a massive decline in its number of new users, falling from a daily peak of about 15,000 in February 2024 to just 650 by September 8, according to data from Dune Analytics. Experts believe this signals an entry into a low-growth phase for the platform.
The decline in growth is not particular to Farcaster, as several other SocialFi apps are also struggling to attract more users after enjoying massive growth in the first half of 2024. However, a few outliers are remaining who continue to see consistent growth.
Farcaster DAUs drop 40% from the peak
According to Dune Analytics data, Farcaster’s daily active users (DAUs) have fallen from a peak of 104,000 in July to 60,000 currently, representing a 40% decline. Beyond users’ decline, the number of posts and interactions on the platform has also tanked by more than 60% from the peak, showing that activity has generally reduced.
The drop signals trouble for the platform, which raised $150 million in its Series A funding round in May 2024, valued at $1 billion. At the time, many considered Farcaster the ideal decentralized social media network where users have complete control over their data, leading to endorsements from several crypto stakeholders, including Ethereum co-founder Vitalik Buterin.
However, Farcaster is not the only SocialFi app struggling in the second half of the year after attracting millions in venture capital investment and thousands of users in the first half of 2024. Its competitor, Lens Protocol, is equally struggling to maintain relevance, with its daily new users dropping from 37,000 on February 28 to just 142 by September 8. Its DAUs have also fallen from the peak of 42,281 in July to 8,363 presently.
Still, both platforms are in much better positions than Friend.tech. The once popular Web3 social network where users trade keys now looks set for oblivion after the developers renounced control of the smart contracts, transferring control to a null Ethereum address. The move effectively means that the platform will not see any new developments or features even though it will continue functioning as usual.
Admin and ownership parameters have been set to 0x000…000 to prevent any changes to their fees or functionality in the future.
This change does not affect the separate web client operated at https://t.co/YOHabcBL3H which will continue to function as is. No fees from either…
— friend.tech (@friendtech) September 8, 2024
Friend.tech team’s decision to abandon the project comes after months of stagnant performance. At its peak, Friendtech, which launched on Base, generated more revenue than the Ethereum network, with a record of over $2 million on September 14, 2023. The platform made over $20 million in fees during its lifetime, but the recent revenue was around $70.
Is SocialFi dead?
With several Web3 social platforms struggling and at least one collapsing, many in the crypto community believe this marks the end of the SocialFi era. People have attributed that decline to several factors, including that these projects stopped airdropping and could not attract the degens who want to make money.
However, one user noted that the major issue is that most Web3 social platforms are just traditional social platforms based on blockchain without innovative features.
The problem with Farcaster is that it’s trying to “build” what is already there “but on blockchain” without any UX/UI innovations. The first successful decentralised social app will be one of the current web2 market leaders after they integrate blockchain technologies.
— MayDay Crypto💸💰👑 (@Mayday117) September 9, 2024
Meanwhile, there might still be some hope for the SocialFi sector as some platforms continue to thrive under the radar. According to data from OurNetwork, the most used on-chain social protocol last week was OpenSocial, with over 100,000 DAUs. The platform, which has most of its users in the Asia-Pacific (APAC) region, had more users than Farcaster and Lens despite not getting as much social coverage.
Blockworks founder Jason Yanowitz also observed this, noting that OpenSocial’s performance and lack of coverage might be due to its location in Asia. He noted that the region has a vibrant community with massive potential.
