Feb 7, 2024

Farcaster co-founder, Dan Romero, joins CoinDesk to unpack Web3 social protocol Farcaster.

Video transcript

What's your crypto Genesis story? I was college roommates with Fred Urson, one of the co-founders of Coinbase. He said you should come and work at Coinbase. And I responded to him. I do not want to work for a Ponzi scheme um which a year later after finally reading the Bitcoin white paper, I came hat in hand and was kind of begging for a job at Coinbase. So that was my initial read, which was wrong, but I soon therefore corrected it uh in 2014 and, and have been in crypto 10 years this year that was Forecaster co-founder Dan Romero on his incredible crypto Genesis story. So, what's he doing now? Well, he's creating a decentralized social protocol that has folks pretty excited. Stick around for that interview in just a few minutes. Welcome to first mover on coin desk. I'm Jen Sani on this show. We bring you all of your top news headlines of the day and interviews with industry heavy hitters stick around for our interview with Dan. But first, let's take a look at what's going on in the news. The sec is punting again on a spot, Ether ETF decision that was put forward by Invesco and Galaxy Digital. The proposed product would allow professional investors to directly gain exposure to spot Ether Bloomberg Intelligence analyst James Seifert said the delay was in line with expectations. The date to watch here is still May 23rd. Craig Wright is facing another high stakes legal battle in London. An alliance of crypto advocates and developers have sued Wright accusing him of committing forgeries on an industrial scale to prove that he is Satoshi Nakamoto, the sed Onymous inventor of Bitcoin. The trial kicked off this week and his cross examination is expected to continue until February 13th. And interest in tokenization of real world assets has sparked a nearly 40% jump in the price of chain links link token over the past 30 days, some crypto wallets have apparently picked up over $50 million worth of the token on chain analysis tool. Look on showed how one whale even withdrew 2.7 million link tokens from crypto exchange B using 49 new wallets when the price climbed to a 22 month high coin desk was unfortunately unable to verify whether the wallets belong to a single owner. Forecasters. Daily active users surged to all time highs since the launch of frames at the end of January. Joining us. Now to discuss is forecaster co-founder Dan Romero Dan. It looks like you've been a busy guy lately. Yeah, a little busy. All right, let's dive into this story. But uh for the uninitiated, take us on a little trip down memory lane, uh talk to us about forecasters a mission and how it came to be. Sure. So I've been in crypto 10 years, actually, this, this upcoming month and I was at Coinbase for five of those and then have been building forecaster for the last three and forecaster is a decentralized social network. So if you were to use the app, it feels very much like Twitter. Um but we have a few different features and, and one of those is frames and, and that's kind of been the big growth driver for us in the last two weeks. We've, we've seen our user base 10 X um in just two weeks because of this new feature and, and happy to talk about it. Yeah, let's talk more about frames that launched at the end of last month. It is all the rage on X right now. Uh Talk to us about how it works and the functionality. Yeah. So frames are interactive social media posts and the best analog to think about is when you use Twitter, you can post a tweet with text image video and then there's one type of post that you can do on Twitter that has some interactivity and that's a poll, right? So you can pick the options you want. And then as a kind of a reader or viewer, you can vote in someone's poll and then see the results. But, but with a poll Twitter controls that entire experience and you, you can't modify it. You, you can't come up with a new creative way of displaying that pole or uh another use for those buttons. Um It's, it's pretty constrained. So with frames, it, it gives developers a, a kind of total canvas within our app to kind of display content and then have interactivity to find what the buttons that will show up next to a frame. And so it's kind of almost like a mini app within an app. And it, what's important is it meets the consumer where they are. So there's no need to go install another app. There's no need to kind of fiddle with connecting a wallet and the kind of back and forth dance. You open up the app, you see a frame as a social media post in your feed, you're able to tap on a button and then have something happen and there's a variety of different use cases. So kind of your your more simple ones, polls. We we now have bows on forecaster, but you kind of have tarot card reading and playing chess. And um then people got really creative and said, well, what can we do with the kind of on chain side of things? Right? And, and actually kind of enable people to, to have these frames in the feed, do something on a Blockchain. And so what we've seen people have are kind of like Mint Nfts right from the frame. And we've even had creative use cases like someone built a a full shopping cart uh for buying girl scout cookies that you, you could kind of do all the interactivity right from inside a social media post. And then at the end, you you click and then you actually pay with pay with crypto. And so what's been great about it is developers even within this really simple canvas have had just tremendous creativity. And what's been great for users is it just meets them where they are, right? So developers now get users and, and users get actual delightful, interesting experiences, right? In their feed. Tell me a little bit more about that user feedback. I know your X account has been blowing up with feedback and new frames over the past few days. What have users been saying? Yeah. So we've had our uh scaling challenges uh went through the C coin base, right? So 2017 was like basically an entire year of trying to keep the site up and, and meet up with keep up with demand. I think we've done a tremendous job and, and credit to the team on, you know, kind of 10 X increase in users and downtime has been pretty minimal. Um So I think we're, we're really focused on, you know, kind of keeping the site up. And then I think the, the second focus right now is also just quality, right, like you have a surge of new users, uh tons of really interesting accounts showing up and then naturally you have some ones that are lower effort kind of spammy. And so team is relentlessly just kind of going through and, and trying to figure out the right changes to the product to kind of keep quality really high, I think uh prior to two weeks ago, the main way to describe forecaster is, yeah, it's cool, not that many people using it a lot of developers, but really high quality. And so I think that that that core level of quality is something that we're really focused on, on scaling. And so I think you can, you can do that through product and it just requires uh focus. What do you think it's gonna take for a mainstream audience to adopt a new social platform? And I ask that because we've seen a few decentralized social platforms pop up. We've seen a few competitors to X pop up threads of course, launched last year. Uh but none have really taken off. What's what's driving you, what do you think is going to bring that mainstream audience to your platform? So I want to start off by saying, I think anyone building a decentralized alternative to web two social admirable, like we need 10 more attempts at doing that because I think ultimately the world will be a better place if, if the primary ways we communicate over the internet are protocols, not, not platforms. I think what forecaster is doing differently. And I so just kind of speaking from our own strategy and experience is we've been really focused on developers. Our initial early community, mostly developers. Uh Again, people would even critique us in saying that, oh, it's, it's too nerdy, it's too developer centric. Like never, never gonna have an ability to kind of replace a web two social network. And our our belief is by focusing on developers, if you, you can kind of get a flywheel going of developers, building interesting apps which attract users, which then attract more developers, more interesting apps. You can actually build a a vibrant ecosystem that it's not just one type of social media experience, right? When you use our app today, it feels like Twitter, but there's nothing stopping someone from going and building something that looks more like tiktok or uh a completely new social network that, that someone even hasn't invented yet. And so I think that is to me that going to be the winning strategy, whether that's Forca or someone else. I hope it's FORCA is you crack the code to actually attract developers who are building the next generation of new social apps uh on top of your protocol. And I think if your your strategy is clone Twitter and try to provide a different graph on Twitter or a different version of Twitter, I don't think, I don't think that that's gonna work because Twitter's network effect, despite all of the hemming and Hawing over the last year and a half is pretty significant. And I, and I think that the, the best example of this is uh threads meta all of the resources that they have um hasn't been able to make a dent, right? There's some small group of people who have left, but for the most part, the main stage is still Twitter. And so I think by playing a different game, a game where we are focused on attracting developers who are building that next generation, a set of social networks that are completely new, right? Think about when snap comes out originally that that was different than Instagram, which was different than Facebook um or something like be real, right? So those those kind of new uh next gen social networks that that's the focus and the only way to get that is actually attracting developers, Dan, I was having a conversation with someone else this week that was saying uh something similar to what you're saying that um V CS should focus more on companies that are focused on drawing developers. And I I guess my question to you is do you think that web three companies are focusing too much on the user and not enough on the developer? And that could be a hindrance to this mainstream adoption that we're always talking about? Well, it's a bit of chicken in the egg because you can't just focus on developers if you don't have users. And I, and I think that's actually a, a lot of crypto protocols. Um They focus way too much on, on building technical stuff and, and documentation and then they kind of have a field of dreams mentality where if you build it, they will come when the reality is, the technical stuff is necessary but not sufficient. Like you, you actually have to have it work obviously. But the the thing that's actually going to get developers to show up. And and I think frames is is uh you know, validation of the strategy is you have to have users, you have to have engaged users, you have to have high quality users. And if you get to some baseline, then you can actually have a flywheel of new apps pull in more users which create, you know, more developers who want to create apps. That, that that flywheel only happens if you've done the work to get users. And so I would, I would say that frames launched two years ago, doesn't matter, frames launched two weeks ago, 10 X is the user base, right? So that, that, that I think is the sequencing is important. It's focus on getting users. And then um you you you have an opportunity with developers just so happens that our early users were developers. So maybe, maybe that's one way to do it on that point, I guess how are you thinking about uh keeping the users that have all joined forecast or to experience frames in the last few week? You know, I I don't want to compare the platform to a web two social platform, but I'm going to. So just forgive me, it reminds me when threads came out, everyone jumped onto the platform, but then kind of tapered off and never used it again. How are you hoping uh to solve that problem on forecaster? Keep these users coming back? So I think two things. Um one, I wake up every day and think about this, right? Like it's like how many people are gonna be still using the app? 30 days from now, you know, great to have the sign ups, but 30 days from now, that's when you really want to talk to me. I think the first is quality. So you have a surge of new people on the app. Uh People are trying to figure it out and, and you have to make that experience great and otherwise people are going to churn and then you run the risk of actually alienating your early users and, and, and having them say, oh, you know, this is too overwhelming, it's too chaotic. And so team is really focused outside of keeping the the website up is really focused on quality right now. And I think that the second thing and I think this is where it, it is great to be a small start up is we just have to keep the shipping velocity of new product development really, really high. Um So if people feel the energy of the the social network, in terms of it is making progress, there are new exciting features, developers have new ways to interact with users via kind of new functionality for frames. That is to me the the single best strategy for for kind of keeping people interested. I think a lot of times what happens is people get a lot of growth and then they get so overwhelmed with just like basic blocking and tackling on their infrastructure. They they lose the kind of that velocity of what makes the the kind of thing special to begin with. And so from our standpoint, we're, we're fortunate, you know, you, you asked me last year, maybe I wouldn't have said the same thing, but we've been building for three years. So we have three years of infrastructure under our belt. Um And, and so a lot of the kind of like core things that in a sudden viral app, you have to go tackle. We, we've already, we've already built out still a lot of work to do, but I'm optimistic that if we we nail quality um and there will be some bumpiness, but I think I think the team can really deliver on it and we can keep the the pace of new feature development and, and kind of momentum there then I think we can create a kind of retained and and durable user base, which that, that's exciting because more developers are going to show up because now, you know, instead of having uh 5000 daily active users, you have 50,000 or 100,000 daily active users, right? And those are all potential users for that developers. You know, next, next thing I think it's important that you brought up the fact that you've been building for three years. Uh because you've launched in a time where people are generally frustrated with the traditional social platforms out there. I want to take this opportunity to ask you what are some features on X or Twitter or whatever it's called? Now that some folks are frustrated with that might cause them to look to Far Caster. There's one big one links. So you post a link. If you post a link to this interview on X the Algo nerves, you and you don't get any distribution. So you have all these people putting, you know, videos or uh photos just because it's it's OK. I need to make sure I get the distribution links are not nerfed on forecaster. We love links frames are actually just a link that, that that's the beauty of it. You can actually take a forecaster frame and tweet it out on Twitter and it doesn't have the interactive functionality, but the link still kind of like just works. So you can think of it as a green bubble, blue bubble. If you use an iphone, the green bubble shows up on Twitter, but the blue bubble, the fun one shows up when you use forecaster. And so I think our our view is links are uh freedom in terms of whether you're a content creator sending you to a video or a substack um or you're a developer and you want to build a frame. Let let the links go wild basically. Do you anticipate X coming out with their own version of frames? Maybe I I I'm I'm not sure. I think it would be a huge validation for what we're doing. And that goes back to my point is focus on quality and focus on speed uh of feature development because if you get complacent, other people will copy you and you and you'll lose that momentum and very quickly before we go, how decentralized is forecaster. So forecaster at protocol level is decentralized. Anyone can go sign up, they don't have to use any app, they can do it themselves, they can, you know, build an app that sits on top of forecaster and provides the sign up. So system works. It's not coming soon that that went live in October and I think where we are going to see more is right now, I think work casts our app is, is the biggest one. We've been building it for three years. But as the, the number of daily active users in the protocol increases, you are going to get more and more sophisticated teams looking at that saying, hey, I I can go build an app just as good as this or, or even better. And I think that's a great thing, right? That that is how far caster the protocol will succeed. And so I think from a, from a technical standpoint protocol is decentralized like that part of the perk of working on it for the last three years. And I think now we're moving up to the point where getting to a sufficient number of daily active users means the uh the kind of the the sophistication of the developers coming into the ecosystem is going to increase, which means you're going to have more diversity of kind of apps that use forecast, which which I think is very healthy for the protocol. Dan, thanks so much for joining the show. Thanks for having me. That was forecaster co-founder Dan Romero. It's time now for chart of the day, the chart of the day is presented by crypto.com, the leading crypto platform trusted by over 80 million users worldwide. It's been a stellar week for chain links. Native token link is the only member of the coin desk 20 to return positively week on week when looking at market capitalization link also now ranks eighth amongst the coin desk 20. As a reminder, the coin desk 20 index measures the performance of top digital assets. Meanwhile, other smaller cap oracle networks have moved higher along with link, including the native tokens for P network band protocol and dia this comes as most crypto assets are down this week. All six members of the coin desk large cap select index are in the red week on week. It's time now for open forum on this segment, we take your questions from social media on any particular topic we go out into the world and we find answers for you. Remember, there are no dumb questions here. So if you have a question and you want us to find an answer for you, send me ad M on X and we'll try to sort you out for this segment. We wanna thank Drear Blockchain, research analyst Sarah Galis for helping us answer these questions. Let's get right into it. All of the questions on today's segment are about NFTS. The first one comes from walk in the clouds. They said I want to know more about how NFTS are applied to real world assets instead of pixel images walk in the clouds. NFTS definitely became popular through several PFP collections. But there are so many more sticky use cases for NFTS that folks are exploring right now. You hear us do interviews about them on the show all the time. Sarah told us that the applications of NFTS to real world assets represents a shift in how we tokenize and trade physical goods and rights. Let's take a look at a few examples to help us understand this just a little bit more and let's start with physical art. OK. Artists and galleries are using NFTS to certify the authenticity and ownership of physical art works. In these use cases. NFTS are linked to the piece and can provide details about the artworks origin previous owners and verify its authenticity. The same principle can be applied to any luxury item or collectible. The next use case we're going to look at here is property titles and transactions. Yes, you heard me right. Even your house can be tokenized and that's your physical house in the real world, not your digital house in the metaverse. Although that can also be tokenized. Sarah tells us that when real estate is tokenized, it can help simplify the process of buying selling and transferring property titles. The method even promises to reduce fraud and make property ownership more accessible. Now you might be asking how could it be more accessible? Well, if a home is tokenized, you can now own part of a home or a fractional share in a piece of real estate, making it more accessible to folks with different incomes, music and media rights is the last use case. We're going to take a look at here. Musicians and content creators can use NFTS to sell rights to their work including songs, videos or other media. Let's take Rihanna, for example, if she creates an NFT that represents ownership in one of her songs. Every holder of that NFT could participate in the profits from that song over time. And now I told you that was the last example we were going to take a look at. But I couldn't this one out tokenized securities, even stocks bonds and other traditional financial instruments can be represented as NFTS, mixing the old world with the new, this is similar to real estate and could potentially open up new markets and make these types of assets more accessible to a broader range of investors. I hope that answered your question. Walk in the clouds. Let's move now to our next question. Sirpa Burt asks, can ts be freely transferred between different digital platforms without any restrictions or limitations? All right, NFTS can theoretically be transferred between different platforms, but the process is not always straightforward and can depend on a few things like compatibility between different blockchains platform or marketplace policies, smart contract stipulations and technical infrastructure to support the transfer. Sarah tells us that TS are typically created and bound to a specific Blockchain. So that means a Blockchain like Ethereum or Solana. If an NFT is created there, sometimes they can be bound to that ecosystem for the NFT to be transferable. Your NFT platform must support the same Blockchain network. Now, some platforms might have their own policies or limitations that restrict the transfer of the NFT outside of that ecosystem. Some reasons for this could be that there's proprietary technology licensing agreements, intellectual property or a desire to maintain control over the assets traded within their platform and smart contracts come into play. Now, the ability to transfer an NFT can also be limited by the parameters set by the smart contract that governs the NFT. A smart contract is something that lives on a Blockchain and sets the rules and parameters in which you can interact with an asset. Some NFTS could be designed with restrictions on transferability or might be only transferable when certain conditions are met. Sir. For, I hope that helped you. I hope you have a little bit of a better understanding on how when and if an NFT can be transferred. Let's take a look at our next question. It's from Barons Audrey. They asked, can someone explain how NFTS are created and what makes them unique and valuable compared to other digital assets? Ok. Let's break this down. NFTS are created through a process called minting. This is where digital art or digital file is published on a Blockchain. As you recall. A Blockchain is the decentralized ledger that records all of the transactions of cryptocurrencies and other digital assets. Here's how the process works. First, you select the Blockchain and ensure that it supports NFTS. Some examples include Ethereum Tasos or flow. Next, you prepare your digital file so you get your photo, your video, your file, maybe your digital art ready. Then you choose the NFT marketplace that you want to mint your NFT on. So an example of an NFT marketplace is open sea minting. The NFT involves uploading the file setting up the sales process. So this means deciding whether the sale is going to be at a fixed price or an auction and then you define the smart contract parameters. So for example, if you want to receive a royalty, every time the file is traded, you can stipulate that in your smart contract during the minting process, a unique smart contract is generated which makes the NFT distinguishable and provides information like ownership royalties and metadata. So what sets these tokens apart from other digital assets? It's their non fung fung il is when something can be exchanged for something else that is exactly the same. So for example, if I have a $5 bill and I trade it for your $5 bill, I still have $5 with NFTS. They are one of a kind or distinguishable, making them non fungible. This non fungible piece is then guaranteed by a Blockchain which provides proof of ownership, Blockchain entries, certify the ownership and makes it verifiable. And blockchains also provide providence, meaning that the history of the NFT is permanently recorded. The last part of this question, where does NFT value come from? Sarah tells us that unlocking tradition, digital files that can be copied without loss of quality NFTS ensure that there is one original version enhancing collectible value value also comes from the fact that Nfts can confer ownership rights and other digital assets can't including revenue from future sales. And the market for NFTS is driven by collectors demand uniqueness and reputation. Unlike other digital assets that might be more fungible. We received so many great questions about Nfts that we couldn't fit them on this show today. We just covered three of them. I think there's about 10, but don't worry, we're going to be incorporating them into future segments of open forum. So if your question wasn't answered today, it will be answered. Just hang in there and keep watching the show and we'll get those answers for you. Thank you everyone who sent their questions in and keep them coming. Remember, there are no dumb questions here. We're here to help you understand this crazy digital world that we are living in one step at a time. Once again, thank you to d our Blockchain research analyst Sarah Galis for helping us with the answers to those questions. That is a wrap for first mover today. Thank you so much for watching and thank you to our guest, Dan Romero. As a note, we sometimes edit interviews on first mover for clarity and for length. As you know, we are on a journey to make this show the apps best show that it can be. So if you have any feedback for us, hit me up on X, send me ad M and we'll be sure to incorporate it in the show. And if you just can't get enough of the crypto news, check out all the latest headlines on crypto.com. I'm Jen San Nay. This is first mover and we'll see you tomorrow.

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