Bessie Liu

Community-focused layer-3 network DEGEN chain launched last week, stirring interest in the memecoin community.



DEGEN chain is the brainchild of Jacek Trociński. After leaving his job as a data engineer and architect at Hedgehog Technologies in November last year, Trociński began thinking of ways to build his own business. At the time, Farcaster, a decentralized social network, was gaining momentum, and Trociński became more active in the degen channel on the app.



According to Trociński, the degen space on Farcaster was not an extremely popular channel when it first launched and was filled with many builder personas. This began to change in December after someone created a points token.&nbsp;



“All of a sudden, people just started piling into the channel,” Trociński told Blockworks. “That ended up kind of crumbling. Then they created a different token, and it ended up getting hacked, and then someone created a wowow token. I don’t know what happened with that; I think it just kind of fizzled out. But these tokens were just getting astronomic inflows in a very short time span…so I started realizing, well there’s something going on here.”



Read more: <a href="https://blockworks.co/news/social-media-farcaster-interview">Q&amp;A: Dan Romero and Jesse Pollak think this may be Farcaster’s ‘inflection point’</a>



Trociński began working on a token with similar tokenomics to Blur’s token (<a href="https://blockworks.co/price/blur">BLUR</a>) and Uniswap’s token (<a href="https://blockworks.co/price/uni">UNI</a>), eventually launching it on Jan. 8. The idea behind the token would be that users could earn points if they were active in the channel. Points were awarded to users who received likes and comments on their posts or if users held certain <a href="https://blockworks.co/tag/nfts">NFTs</a>.



One point always equated to one DEGEN token, and users were rewarded through an <a href="https://blockworks.co/tag/airdrop">airdrop</a>. With a growing community interest, Trociński noted that more developers began building applications using DEGEN as its native token.



Read more: <a href="https://blockworks.co/news/layer-3-loyalty-points-base">Stack ‘points chain’ layer-3 aims to bring loyalty points to Base</a>



“I think they are using DEGEN as the token for various reasons. One is the community, the other is that it is hard to launch a token. There’s a lot of legal issues around tokens, and there’s also a lot of things like trade and liquidity pools…I think [projects] want to focus on building an app, not a token,” he said.&nbsp;



DEGEN chain itself launched as a layer-3 blockchain to enable community members of DEGEN to enable customization, Trociński explained. He noted that the chain itself is not designed to be able to do anything “technologically different” but act as an “application layer chain.”



“If the community wants, I don’t know, <a href="https://blockworks.co/tag/farcaster">Farcaster</a> pre-compiles, so instead of calling a smart contract, you could have it natively in the blockchain level as a function…we can add that customization,” he said. “I think it makes a lot of sense for us to do some level of customizations, but not necessarily innovate in the way <a href="https://blockworks.co/news/blast-developers-layer-2-liquidity">that say Blast is innovating </a>or OP is innovating.”



Trociński remarks that if the DEGEN chain becomes a <a href="https://blockworks.co/tag/meme-coins">memecoin</a> chain that enables applications to build games and design fun applications, then it will become extremely valuable.&nbsp;



Read more: <a href="https://blockworks.co/news/crypto-leaders-insist-on-memecoin-utility">Web3 Watch: Crypto leaders insist memecoins have a purpose</a>



Although Trociński likes the idea of being part of <a href="https://blockworks.co/news/optimism-bedrock-upgrade-superchain">Optimism’s superchain vision</a>, he noted that the OP stack itself did not offer native gas tokens.



“One of the things I really, really wanted was for DEGEN chain to have DEGEN as the native gas token,” he said. 



For this reason, the DEGEN chain itself is built as an Arbitrum Orbit chain, which settles on <a href="https://blockworks.co/tag/base">Base</a> and uses AnyTrust for data availability.



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What is DEGEN chain? The L3 built for the memecoin community DEGEN

Casey Wagner

Katherine Ross

Michael McSweeney

<h2 class="wp-block-heading">The Fed: Custodia can’t sit with us&nbsp;</h2>



A judge last week sided with the Federal Reserve in the Custodia Bank lawsuit, confirming that the central bank is under no obligation to grant master account access and membership to all eligible institutions.&nbsp;



Wyoming-based Custodia first brought legal action almost two years ago as the Kansas City Fed dragged its feet on making a decision about Custodia’s membership application. Master accounts allow banks instant access to services like clearing and wire transfers directly from the Fed, meaning institutions don’t have to go through intermediaries.&nbsp;



When Custodia’s application was denied in early 2023, Custodia’s legal team pivoted and amended the suit, arguing that the Fed’s board of governors had a hand in the regional bank’s rejection.&nbsp;



Read more: <a href="https://blockworks.co/news/banking-sector-uncertainty-crypto">What banking sector uncertainty could mean for crypto markets</a>



Judge Scott Skavdahl disagreed, stating that there was no evidence that Kansas City officials didn’t reach their decision on their own. Skavdahl said they were completely within their right to reject any application they want, even if the bank does fit the master account requirements.&nbsp;



Custodia’s team said they are considering their “options” and an appeal is not off the table. Sounds like an expensive uphill battle.&nbsp;



The Fed frequently rejects master account applications, and now a federal judge has established a precedent stating that they are allowed to do just that. It’s hard to imagine where Custodia could go from here, but founder and CEO Caitlin Long has never been known to back down from a challenge.&nbsp;



Long didn’t issue any posts on X herself, but she did re-post a series of messages supporting her bank, including one that likened the whole situation to another “Operation Chokepoint” scenario.&nbsp;



The so-called Chokepoint 2.0 — the idea that the federal government is strategically blocking crypto’s access to banking services — has been a conspiracy in the crypto space for years. The narrative especially picked up steam in 2023 when crypto-friendly banks Silvergate and Signature shuttered.&nbsp;



Read more: <a href="https://blockworks.co/news/custodia-banking-bitcoin-custody">Custodia Bank debuts segregated custody accounts service</a>



“What began as a trickle is now a flood: The US government is using the <a href="https://blockworks.co/tag/banking">banking</a> sector to organize a sophisticated, widespread crackdown against the crypto industry,” Nic Carter, a long-time crypto supporter and venture capitalist, wrote in a 2023 <a href="https://www.piratewires.com/p/crypto-choke-point">blog post</a>.



Wyoming Senator and crypto-champion Cynthia Lummis <a href="https://x.com/SenLummis/status/1773836427177955566?s=20">chimed in</a> on the court’s Custodia decision, stating that the <a href="https://blockworks.co/tag/federal-reserve">Fed</a>’s denial is “unacceptable” and Skavdahl’s ruling “goes against clear laws enacted by Congress.”&nbsp;



At this point, Custodia’s best bet is probably a federal law requiring regional Fed branches to approve applications that meet the requirements — perhaps an effort <a href="https://blockworks.co/tag/cynthia-lummis">Lummis</a> will spearhead — although we know bills never move fast in DC, <a href="https://blockworks.co/news/crypto-super-pacs-election-primaries">especially in an election year</a>.&nbsp;



– Casey Wagner



<h2 class="wp-block-heading">Data Center</h2>



<ul>
<li><a href="https://defillama.com/dexs">DeFiLlama</a> reports $261 billion in decentralized exchange volume across all blockchains in March.</li>



<li>Crypto security firm PeckShield <a href="https://twitter.com/PeckShieldAlert/status/1774701695895027920">said</a> that among the more than 30 hacks across the crypto space in March, roughly $188 million was lost — with about $98 million recovered.&nbsp;</li>



<li>NFT marketplace Magic Eden’s volumes grew nearly 200% in the past month, according to<a href="https://dappradar.com/rankings/nft/marketplaces?range=month"> DappRadar</a>.</li>



<li>The major US crypto stocks — COIN and MSTR — are down, 1% and 5% respectively, in pre-market trading.</li>



<li>Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) is <a href="https://www.tradingview.com/chart/?symbol=BITSTAMP%3ABTCUSD">trading</a> just below $70,000 this morning.&nbsp;</li>
</ul>



<h2 class="wp-block-heading">In the eye of the Tornado Cash storm</h2>



The <a href="https://blockworks.co/tag/tornado-cash">Tornado Cash</a> saga continues.



As Roman Storm’s team filed a motion to dismiss, Dutch prosecutors are <a href="https://www.coindesk.com/policy/2024/03/27/dutch-prosecutors-seek-64-month-jail-sentence-for-tornado-cash-dev-alexey-pertsev/">reportedly</a> eyeing a 64-month sentence for the developer.



Storm’s team <a href="https://storage.courtlistener.com/recap/gov.uscourts.nysd.604938/gov.uscourts.nysd.604938.30.0.pdf">argued</a> that Tornado Cash was “immutable and publicly available” and therefore Storm and others who worked on Tornado Cash couldn’t prevent a “sanctioned entity” from using Tornado Cash.&nbsp;



“It is well established that computer code is speech the First Amendment protects. Yet, all three counts here seek to criminalize the development and publication of code and the maintenance of a website that provided open-source software,” Storm’s team wrote.



Pertsev, in the Netherlands, <a href="https://blockworks.co/news/bank-secrecy-act-doj-kucoin">faced lines of questioning</a> from a panel of judges last week about open-source coding and why Pertsev had to make a smart contract’s source code public when deploying the contract, <a href="https://twitter.com/ameensol/status/1772655426171023564">according</a> to Ethereum developer Ameen Soleimani.&nbsp;



Storm was arrested in August of last year, and the motion to dismiss alleges that Storm had met with and tried to work with law enforcement prior to his arrest.&nbsp;



Read more: <a href="https://blockworks.co/news/tornado-cash-fans-appeal">Tornado Cash plaintiffs seek appeals after federal court losses</a>



The Treasury <a href="https://blockworks.co/news/judge-backs-us-treasury-tornado-cash-sanction">announced sanctions against Tornado Cash</a> in 2022, alleging that the service allowed for the laundering of over $7 billion in crypto. Tornado Cash has been used to hide some activity on the blockchain.&nbsp;



The open cases against developers of Tornado Cash are setting the stage for a much larger fight about the future of mixers. The US and Dutch governments are arguing that the service is dangerous, with the US going so far as to declare that it’s a national security issue.&nbsp;



However, the long-standing <a href="https://www.coincenter.org/u-s-treasury-sanction-of-privacy-tools-places-sweeping-restrictions-on-all-americans/">arguments</a> — made since Tornado Cash was sanctioned two years ago — are that the service doesn’t lean towards the bad or the good, and is inherently neutral, like a VPN.&nbsp;



From our oped section: <a href="https://blockworks.co/news/tornado-cash-privacy-prevention">Tornado Cash got wrecked, and we could have prevented it</a>



The May sentencing of Pertsev, and the court’s decision on the motion to dismiss, will bring the back and forth around the service to a head once and for all.



– Katherine Ross



<h2 class="wp-block-heading">The far-seeing unicorn?</h2>



<a href="https://blockworks.co/news/social-media-farcaster-interview">The startup behind Farcaster</a>, the decentralized social media protocol, has reportedly scored a $1 billion valuation in a new funding round.&nbsp;



<a href="https://www.bloomberg.com/news/articles/2024-03-30/crypto-social-media-firm-merkle-sees-1-billion-valuation-in-paradigm-deal?utm_content=crypto&amp;utm_source=twitter&amp;utm_campaign=socialflow-organic&amp;utm_medium=social&amp;embedded-checkout=true">According</a> to Bloomberg, the funding round for Merkle Manufactory is led by Paradigm, the crypto investment firm. It’s not known precisely how much the firm will raise; it garnered a $30 million seed round in 2022, <a href="https://www.crunchbase.com/organization/merkle-manufactory">per</a> Crunchbase data.&nbsp;



By all accounts, <a href="https://blockworks.co/tag/farcaster">Farcaster</a>’s star appears to be rising. The protocol’s bid to become <a href="https://blockworks.co/news/farcaster-just-might-be-the-new-crypto-twitter">a new town square for crypto</a> was buoyed by the launch of Frames in January. Co-founder Dan Romero said yesterday that the platform scored a new high for daily active users. “70K+ DAU yesterday. New record,” he wrote.



Read more: <a href="https://blockworks.co/tag/farcaster">Farcaster is marrying social media and Web3 to onboard the masses</a>



It’s tempting to draw a connection between apparent success and the seeming troubles over at Elon Musk’s X, formerly Twitter. As NBC detailed, one data-tracking service recently claimed that X’s global daily active user count <a href="https://www.nbcnews.com/tech/tech-news/fewer-people-using-elon-musks-x-struggles-keep-users-rcna144115">tumbled</a> in February —&nbsp;174 million, a decline of 15% from a year before. X claimed a different, higher number for DAUs: 250 million globally.&nbsp;&nbsp;



Meanwhile, much ink has been spilled over X’s advertiser exodus, driven in no small part by <a href="https://blockworks.co/tag/elon-musk">Musk</a>’s <a href="https://blockworks.co/news/x-removes-nft-profile-pics">controversial behavior</a> on the site.&nbsp;



As Business Insider reports, Musk’s electric car company, Tesla, recently <a href="https://www.businessinsider.com/elon-musk-x-twitter-advertisers-ad-problems-solution-tesla-2024-3">bought</a> ads on X.&nbsp;



Does Farcaster’s reported unicorn round reflect the blood in the social media water? Perhaps. It could just as easily further signal that the positive vibes are indeed back in the crypto world and investors are once again eager to sign big checks for noteworthy projects. We might gain further insight once additional information about the funding round drops.



Stay tuned.&nbsp;



– Michael McSweeney



<h2 class="wp-block-heading">The Works</h2>



<ul>
<li>Social media platform Telegram is<a href="https://telegram.org/blog/monetization-for-channels?ln=r"> </a>now <a href="https://telegram.org/blog/monetization-for-channels?ln=r">accepting</a> TONcoin for advertising, as part of a revenue sharing announcement over the weekend.</li>



<li>The Wall Street Journal<a href="https://www.wsj.com/finance/currencies/crypto-fuelsrussian-shadow-trade-for-weapons-parts-1bfdc1a1"> reports</a> that middlemen in Russia used USDT to purchase weapons manufacturing components and avoid US sanctions.</li>



<li>BitKub, Thailand’s biggest crypto exchange, is aiming to go public next year,<a href="https://www.bloomberg.com/news/articles/2024-04-01/thailand-s-biggest-crypto-exchange-hiring-advisers-for-2025-ipo?embedded-checkout=true"> according </a>to its CEO.</li>



<li>The Biden administration is<a href="https://www.axios.com/2024/04/01/biden-energy-ai-nuclear-power"> pushing</a> big tech companies to explore new ways to generate electricity as <a href="https://blockworks.co/tag/artificial-intelligence">AI</a> fuels a power consumption surge.&nbsp;</li>
</ul>



<h2 class="wp-block-heading">The Morning Riff</h2>



Stop “poo-pooing” <a href="https://blockworks.co/tag/meme-coins">memecoins</a>, says Arthur Hayes.



The former CEO of BitMEX argued that memecoins add value because “the chains that support this culture are going to be the chains that have value.”



He added that the coins bring “attention and more engineers to the space,” setting up opposition to Vitalik Buterin’s argument that there isn’t anything “new and interesting” about memecoins.



Read more: <a href="https://blockworks.co/news/crypto-leaders-insist-on-memecoin-utility">Web3 Watch: Crypto leaders insist memecoins have a purpose</a>



Check out what Hayes had to say on <a href="https://www.youtube.com/watch?v=VGlCevPdFKU&amp;t=3280s">YouTube</a>:



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/VGlCevPdFKU?si=ieXO1z6KmFkUGMMB&amp;start=3282" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>







– Katherine Ross



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Why Custodia’s loss isn’t the end of its Fed fight

Jack Kubinec

The social media protocol Farcaster generated a lot of buzz this week, driven by the success of its X-like client, Warpcaster.&nbsp;



The standard version of the story goes something like this: In late January, Farcaster released Frames, a feature that lets external sources be natively displayed within the Warpcast feed. This bit of technology allows developers to build cool things, such as in-app Girl Scout cookies order flows. As a result, users have flocked to what might become crypto’s <a href="https://blockworks.co/news/farcaster-just-might-be-the-new-crypto-twitter">new public square</a>.



This is all true, but the app also comes out of crypto, where the potential for profit is often a driver of user interest. Much of the Farcaster coverage this week showed this graph of Farcaster’s parabolic usage growth:



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1192" height="916" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/02/Screenshot-2024-02-11-at-1.33.52-AM.png?w=1024&amp;h=1024" alt="" class="wp-image-79918" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/02/Screenshot-2024-02-11-at-1.33.52-AM.png?w=1192 1192w, https://blockworks-co.imgix.net/wp-content/uploads/2024/02/Screenshot-2024-02-11-at-1.33.52-AM.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/02/Screenshot-2024-02-11-at-1.33.52-AM.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/02/Screenshot-2024-02-11-at-1.33.52-AM.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/02/Screenshot-2024-02-11-at-1.33.52-AM.png?w=334 334w, https://blockworks-co.imgix.net/wp-content/uploads/2024/02/Screenshot-2024-02-11-at-1.33.52-AM.png?w=340 340w, https://blockworks-co.imgix.net/wp-content/uploads/2024/02/Screenshot-2024-02-11-at-1.33.52-AM.png?w=285 285w, https://blockworks-co.imgix.net/wp-content/uploads/2024/02/Screenshot-2024-02-11-at-1.33.52-AM.png?w=80 80w" sizes="(max-width: 1192px) 100vw, 1192px" /></figure>



Data from the same Dune Analytics <a href="https://dune.com/pixelhack/farcaster">dashboard</a> shows that each of the 10 most popular posts (casts) this week used Frames to promote NFTs and other assets. Many of the posts required users to like and recast in exchange for a free mint.&nbsp;



Some Warpcasters have taken notice. A host of the /replyguys channel <a href="https://warpcast.com/tervo/0xb69a610f">complained</a> they saw “channels be inundated with [altcoin references] over [the] past two days.”



In an interview with Blockworks this week, Farcaster co-founder Dan Romero said he wasn’t overly concerned about financialization on Warpcast and other Farcaster clients.



“Distribution is distribution. I think in the case of crypto, obviously, if you have a wallet, there’s naturally going to be probably a bit more financialization for some of the use cases,” Romero said.



“But I want to emphasize this: I think some of the most creative Frames aren’t overly financialized,” Romero continued.



Read more: <a href="https://blockworks.co/news/social-media-farcaster-interview">Q&amp;A: Dan Romero and Jesse Pollak think this may be Farcaster’s ‘inflection point’</a>



<h2 class="wp-block-heading">NBA sued over Mark Cuban’s Voyager deal</h2>



The NBA was “grossly negligent” in not blocking a promotional deal between now-bankrupt crypto firm Voyager Digital and the Dallas Mavericks, a class action suit filed in a Miami district court <a href="https://www.courtlistener.com/docket/68229938/1/karnas-v-mccarter-english-llp/">argues</a>.



The suit alleges the NBA had a responsibility to review all marketing campaigns pertaining to the league, including Voyager’s with the Mavericks and owner Mark Cuban.&nbsp;



The Mavericks announced a five-year exclusive <a href="https://www.mavs.com/mavsvoyager/">partnership</a> with Voyager in 2021, offering fans $100 in crypto for signing up to the platform. Cuban and Voyager CEO Stephen Erlich <a href="https://www.dallasnews.com/sports/mavericks/2021/10/27/mark-cuban-mavs-partner-with-voyager-cryptocurrency-platform-in-teams-first-international-deal/">promoted</a> the deal at a press conference with several Mavericks players. Cuban <a href="https://brownrudnick.com/news_post/firm-defends-mark-cuban-and-mavs-in-voyager-digital-lawsuit/">faces</a> a class action suit of his own for his Voyager promotion.



<a href="https://blockworks.co/news/voyager-files-for-bankruptcy-days-after-freezing-withdrawals">Voyager filed for bankruptcy</a> in mid-2022 during the fallout from the collapse of crypto hedge fund Three Arrows Capital.



Read more: <a href="https://blockworks.co/news/mark-cuban-to-be-deposed-next-month-in-voyager-ponzi-suit">Mark Cuban To Be Deposed Next Month in Voyager ‘Ponzi’ Suit</a>



Voyager’s law firm, McCarter &amp; English, is also named in the suit. It’s the latest in a series of lawsuits athletes, sports teams, and now leagues have faced over ties to crypto firms.



Read more: <a href="https://blockworks.co/news/golden-state-warriors-lawsuit-ftx">Golden State Warriors, Steph Curry face class-action lawsuit from FTX investors</a>



<h2 class="wp-block-heading">One interesting stat:</h2>



<ul>
<li>NFT collection Nobody, which <a href="https://nobody.xyz/">uses</a> generative AI to let owners chat with their NFT characters, <a href="https://defillama.com/nfts">saw</a> 11,208 ether in sales volume this week, according to DeFiLlama. The next-most traded collection did under 3,000 ether in volume.&nbsp;</li>
</ul>



<h2 class="wp-block-heading">Also of note:</h2>



<ul>
<li>Mastercard <a href="https://www.mastercard.com/news/europe/en/newsroom/press-releases/en/2024/mastercard-launches-its-web3-uefa-champions-league-trivia-competition/">announced</a> a “Web3 powered trivia competition” where users can compete for UEFA Champions League match tickets in trivia contests unlocked with an NFT pass.&nbsp;</li>



<li>The NEAR Foundation and D3 Global are applying to <a href="https://blockworks.co/news/near-foundation-top-level-domain">create a .near top-level domain (TLD).</a></li>



<li>The Avalanche-built first-person shooter game Shrapnel launched early access for some users on the Epic Games <a href="https://store.epicgames.com/en-US/p/shrapnel-e59542">store</a>.</li>
</ul>



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Web3 Watch: Farcaster’s most popular posts are NFT and altcoin promos

Molly Jane Zuckerman

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="256" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=1024&amp;h=1024" alt="" class="wp-image-60166" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/06/Off-Topic-with-Molly-Jane_20230616a-1.png?w=80 80w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>



It&#8217;s beginning to feel like there is no escaping Farcaster.



Other decentralized social media platforms are larger. For instance, Mastodon boasts 8.7 million users, and Bluesky is nearing 4 million after opening to the public this week. In contrast, Farcaster lags with just tens of thousands of users, despite having launched back in 2020. Yet, it seems like all of crypto has suddenly discovered this app.



Since Elon Musk bought X (and arguably quite a bit before that), the wider crypto community has been exploring different Web3 platforms that might give them what they want better than X can —&nbsp;namely, a place to talk about crypto without being spammed by fake airdrop bots, or more recently, lewd pictures of a certain Canadian rapper.&nbsp;



But while other social media apps have had some measure of success, it seems that nothing has really stuck. In the non-Web3 world, Instagram’s launch of Threads managed to get a massive number of users incredibly quickly, but the app is now essentially a wasteland, only populated by big brands. Friend.tech, which took the whole Web3 thing quite seriously by monetizing your profile, <a href="https://blockworks.co/news/friendtech-downturn-socialfi">nosedived</a> after its initial popularity. And Bluesky, whose users (including myself) really pushed to make it a thing, just still isn’t really a thing. (I’m purposely leaving out Lens Protocol, as it’s still in beta and I never managed to get an invite code.)



Read more: <a href="https://blockworks.co/news/farcaster-blockchain-onboarding">Farcaster is marrying social media and Web3 to onboard the masses</a>



As a crypto journalist, I’m quite sick of the current version of X myself, though I&#8217;ve been cautiously optimistic about each new social media platform that I’ve tried. In an ideal world, I’d be able to go on this new app, find sources for my journalism job, laugh at jokes that aren’t wildly offensive, and even learn new things from strangers’ posts. With X as it stands, this all isn’t possible.



With <a href="https://blockworks.co/news/farcaster-blockchain-onboarding">Farcaster</a> (so far), it’s looking like it is.&nbsp;



Now, I’m not saying that Farcaster is the app that’s going to replace X for the masses. Far from it. In fact, the Farcaster channels that are not about crypto always somehow seem to sneak crypto in there. The /food channel is active, but people are shilling the $Degen token among recipes. The /books channel has callout for crypto trading advice, /space has a post about a new space token funding a space mission, /fitness has chatter about a workout tracker blockchain app.&nbsp;



Read more from our opinion section: <a href="https://blockworks.co/news/crypto-subculture-x-reliance">If we want crypto to succeed, we’ve got to give X the boot</a>



The crypto draw is undeniably huge — there are barely any users in the /dogs and /cats channels, but tons of people in cat-NFT channels and of course, the DOGE channel. All of this is to say that Farcaster, despite its promise for you to “find your tribe,” does seem to limit those tribes to crypto ones.&nbsp;



But it’s this preponderance of crypto in every channel that might be a sign that Farcaster is actually poised to become the new crypto town square, just like Blueskye and Friend.tech had promised.&nbsp;



As Paul Dylan-Ennis <a href="https://blockworks.co/news/crypto-subculture-x-reliance">wrote back</a> in September of last year, for crypto to succeed in the mainstream, it has to rid itself of its poisonous relationship with X. The only way forward to rehabilitate crypto’s reputation, he noted, is for crypto to shed the bad habits enabled by Web2 platforms like X, and instead return to its subculture roots.&nbsp;



“Then maybe, just maybe, when people come across us again, they’ll find a group of people living according to their values and be able to see the good in those values for themselves.”



This isn’t to say that <a href="http://blockworks.co/tag/farcaster">Farcaster</a> is a utopia of crypto camaraderie. In the few days that I’ve played around on the app, I’ve seen my fair share of meaningless airdrop farming and memecoin shilling. And, I hate to say it, but it is still too early to say with certainty if Farcaster is definitely the one that’s going to stick around — no big news sites are on it yet (Bloomberg still posts daily on Bluesky, for comparison), and while the recently launched Frames are a big draw, they’re such a new addition that people haven’t fully figured out all the ways to experiment with them. 



However, Farcaster’s current success is taking place in a new crypto climate. Unlike the brief fads of other decentralized social media platforms, crypto’s new obsession with the app takes place with Bitcoin at a high, bitcoin ETFs finally approved and the stigma of big court cases like Sam Bankman-Fried and Changpeng “CZ” Zhao having faded from public consciousness.&nbsp;



This combination of factors may be <a href="https://blockworks.co/news/social-media-farcaster-interview">what’s needed for Farcaster to cement its place</a> as crypto’s new favorite stomping ground. Or maybe I’m just caught up in the hype, and crypto will remember Farcaster with the same fondness that we all remember Clubhouse and BeReal. Nothing more than a brief blip in our continual search for new, better ways to entertain ourselves online.



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I don’t care much about tech, I don’t care a whole lot about finance, either. I care about writing stories and watching weird things unfold. And that’s why I’ve ended up in crypto. But because I’m missing that passion for what crypto and blockchain are all about — finance, tech, privacy, yadda yadda — I’m going to write instead about what I am actually interested in. Everything about crypto that has very little to do with crypto. That’s what this column will be about. All the tangential stories that come out of the blockchain and crypto space, what I think about them, and how I navigate it all as a skeptical former Russian literature major. It’s precisely my perch as an outsider that lets me do what I do: Opine on all sides of any crypto issue, no strings attached, no skin in the game. If you want to talk crypto with me, let’s go off topic.



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Farcaster just might be the new Crypto Twitter

Following the launch of Frames, Farcaster, the protocol behind the much-talked-about social network Warpcast, has gained significant attention in the crypto sphere.



Frames is a feature that enables users to embed functionality on Farcaster applications without having to leave the app itself.



This may sound simple at first glance, but is something that was not achievable on previously popular Web2 social media platforms like Facebook.



In an interview with Blockworks, Antonio García Martínez, a former product manager at Facebook and founder of Spindl, noted that in Facebook’s earlier days, the social network wanted to create ways to incorporate ways you could interact with siloed media experiences on its platform.&nbsp;



Read more: <a href="https://blockworks.co/news/social-media-farcaster-interview">Q&amp;A: Dan Romero and Jesse Pollak think this may be Farcaster’s ‘inflection point’</a>



“<a href="https://blockworks.co/tag/facebook">Facebook</a> used to be the one social network that everyone was on, and the idea was you would have, like, a Spotify player with a play button on your feed when your friends share what they are listening to or something like it, but it never quite came together,” Martínez said.



The latest Frames feature is the first step in making this dream a reality. With blockchain technology that incorporates aspects such as <a href="https://blockworks.co/tag/identity">identity</a>, money and payment rails, developers are now able to use it to interact with apps outside of it and create in-context experiences.



“The cool thing about it from a marketer’s perspective, is the typical user funnel — clicking on one thing, going somewhere else, putting in my financial credentials — all of that gets compressed down to just this nexus of the social layer,” Martínez said.



The reason this is possible is that when a user is signing up for a <a href="https://blockworks.co/tag/farcaster">Farcaster</a> application — like Warpcast — Farcaster creates an underlying <a href="https://blockworks.co/tag/wallets">wallet</a> for that account that can be connected or associated with a real wallet.&nbsp;



Although at this point in time on-chain transactions are not yet a functionality on Frames, it is something that Martínez believes will happen in the near future.



<h2 class="wp-block-heading">Biggest consumer app in Web3?</h2>



Martínez notes that in <a href="https://blockworks.co/tag/web3">Web3</a> today there has yet to be a popular consumer app, and mainstream users are unlikely to use a product for its cryptocurrency features.&nbsp;



Read more: <a href="https://blockworks.co/news/crypto-infrastructure-lacking-apps">The crypto infrastructure is here, but where are the apps?</a>



What is important, though, is being able to create products that enable users to interact with experiences that they would not otherwise be able to access on Web2, like group listening through a music provider, Martínez said.



“There’s a lot of excitement, but you know 20,000 new users on Farcaster is pretty small in the scheme of things, it’s not even a rounding error on the Facebook dashboard, but we’ll see, it’s growing pretty fast,” he said.



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Farcaster is marrying social media and Web3 to onboard the masses

Social media protocol Farcaster saw its active users <a href="https://dune.com/pixelhack/farcaster">increase</a> by nearly a factor of ten after it released Frames, a feature allowing apps to run inside of posts on Warpcast.



Frames launched Jan. 26 on Warpcast, an X-like client built atop Farcaster by the Farcaster team. Frames allow small apps to run natively, sometimes with crypto rails, within the Warpcast feed. It spawned a raft of <a href="https://x.com/AlanaDLevin/status/1752017315867083101?s=20">hackathons</a> and in-app Girl Scout cookie <a href="https://warpcast.com/cookie/0x35bbc5a0">orders</a> — alongside <a href="https://warpcast.com/~/channel/degen">speculators</a> hoping for airdrops.



Blockworks spoke with <a href="https://blockworks.co/tag/farcaster">Farcaster</a> co-founder Dan Romero and Base founder Jesse Pollak about Farcaster’s big couple weeks and plans for the future.



Keep reading for excerpts from Blockworks’ interview.&nbsp;



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Blockworks: Let’s start with Frames because that&#8217;s really been the story of the past week and a half. Walk me through the new feature.



Romero: Frames make a cast, our version of a post, interactive. That&#8217;s the simplest way to describe it.&nbsp;



Frames allows you to display an image and then up to four buttons or a text box. That canvas, even though it&#8217;s so simple, allows developers full creative freedom to build whatever they want, and it will natively show up within Farcaster apps like Warpcast.



Blockworks: I want to gauge your thoughts on financialization in consumer crypto apps. Frames let you interact with assets, but there are also polls and other things. So how do you balance the financial and non-financial aspects?&nbsp;



Romero: The way I think about Farcaster is, we wanted to build a credibly neutral social network. That means developers have permissionless access to everything on the network, can permissionless build on the network, and ultimately if it works, it provides distribution. Importantly, that distribution belongs to the person doing the distributing.



And so I think in a world where that works — and you know, it&#8217;s taken us a while to even get kind of on the map, three years of banging your head against the wall in some ways — the usage of that distribution is going to mimic everything that happens on Twitter, right? Distribution is distribution.



I think in the case of crypto, obviously, if you have a wallet, there’s naturally going to be probably a bit more financialization for some of the use cases.&nbsp;



But I want to emphasize this: I think some of the most creative Frames aren&#8217;t overly financialized.&nbsp;



5/9 is a pretty well known anon crypto developer on Twitter. That person <a href="https://warpcast.com/fiveoutofnine.eth/0x5021acbb">built</a> a frame: on-chain chess, and if you beat the computer, you get an NFT. So I don&#8217;t think anyone would look at that and say, ‘Oh, that&#8217;s hyper-financialization.’ It’s more, ‘Oh cool, I can play around with this app, and if I win I get a little marker that says yeah, I’m actually good at chess.’



Read more: <a href="https://blockworks.co/news/a16z-backed-social-dao">Web3 Watch: A16z-backed Scene Infrastructure Company hopes to show crypto is ‘not just money’</a>



If you give developers something to play with, they&#8217;re going to surprise you with their creativity, and I actually think if Farcaster works, it will shift the narrative around crypto from purely this kind of speculative, financialized thing to — it&#8217;s like the internet, you can do anything you want with this new platform and actually emphasize the idea that you as a consumer or user can have real ownership in whatever experience you&#8217;re working with.



Blockworks: Warpcast is a client of the Farcaster protocol, whereas if you look at X, the protocol and the client are collapsed. That&#8217;s a distinction that I can make, but why does that actually matter?&nbsp;



Romero: So to do a little history lesson, Twitter was not always like that. The original Twitter mobile apps were all third party clients. Twitter only had a website and they had an open API and there was a lot of innovation in the early days of Twitter — retweets, quote tweets, hashtags, “@” replies — all not native originally on Twitter, invented by third party developers.



I think it&#8217;s easy to forget that when you actually have a marketplace of ideas and any developer with a good idea can permissionlessly just go and build a new app on top of a protocol, you get way more innovation, better consumer experience, more consumer choice.&nbsp;



Someone was trading messages with me yesterday saying ‘Hey, do you support not safe for work content on Warpcast?’ And I said no, we don&#8217;t. A) we’re 12 people, we don&#8217;t have the team to do that kind of content moderation and B) it&#8217;s probably going to get us in trouble with Apple.&nbsp;



Read more: <a href="https://blockworks.co/news/crypto-subculture-x-reliance">If we want crypto to succeed, we’ve got to give X the boot</a>



The reality is you don&#8217;t have to ask my permission. If you want to go build that type of client, maybe you go build a website that&#8217;s responsible in that sense, like you can get in some pretty gnarly stuff, but no one has to ask to add that to Farcaster.



Warpcast, just like an email client, can decide what content is shown to our users by default in the same way that an email client like Gmail can decide what is spam, but that&#8217;s not a universal policy.&nbsp;



A world where we can get to many different clients that suit many different communities and niches, I think that&#8217;s really powerful.



Blockworks: Ten years down the line, if we&#8217;re living in the Farcaster version of the internet, what does that look like? How&#8217;s it different from today?&nbsp;



Romero: A billion-plus daily active users of the protocol, thousands of apps and services and any interest you have or any quirk in terms of the way you wish something existed.



And I think in a world where Farcaster achieves the kind of vision that we have is that every single one of those Farcaster users is on-chain, so every time someone is coming onto Farcaster, they have an <a href="https://blockworks.co/tag/ethereum">Ethereum</a> wallet created under the hood.



With Frames, I think increasingly you&#8217;re going to see ways for people to have their first on-chain experience in a totally seamless way and the vast majority of those are going to end up on <a href="https://blockworks.co/tag/base">Base</a>.&nbsp;



If Farcaster achieves what we&#8217;re hoping to achieve over the next 10 years, maybe 80% of Americans have some type of crypto, whether they think about it as crypto or not. It could be a Taylor Swift ticket that&#8217;s a collectible, that&#8217;s fine. You don&#8217;t have to know how an ERC-721 works.



Pollak: Yeah, and it&#8217;s happening fast. I feel like we&#8217;ve all been saying for the last few years, ‘Oh, we&#8217;re getting close to the inflection point where we&#8217;re gonna start to see real product growth.’&nbsp;



I really feel and I think a lot of the other people feel like two Fridays ago was that inflection point when Farcaster launched Frames, in that we now finally have all the tools.



We have low-cost layer-2s, managed wallets, better identity like Farcaster, and then the social graph and feed that will get us into viral consumer growth. I think it&#8217;s gonna happen faster than people anticipate and make a massive impact on the world for the better by bringing people on-chain, where they&#8217;re going to have ownership of their creativity.&nbsp;



They can get paid for it, they&#8217;re gonna have a graph that&#8217;s theirs, they can&#8217;t be de-platformed by these large centralized corporations, and everything&#8217;s going to be open source, transparent and decentralized, which is going to be a much stronger platform for enabling developers to build these next-generation applications because they know that they&#8217;ll always have the right to build for these users as well.&nbsp;



Read more: <a href="https://blockworks.co/news/friend-tech-copycats">Friend.tech copycats eager to capitalize on social finance craze</a>



Romero: Yeah, I think that&#8217;s really important. The last 10-15 years, there was this initial gold rush with mobile and it was this totally new paradigm for developers. As that S-curve adoption curve has matured, there&#8217;s been a lot more value extraction from the platforms themselves, whether that&#8217;s cutting off the access for APIs at both Meta and and Twitter or the app stores.



I&#8217;m optimistic that in a world where the platform is, at its root, a transparent permissionless public blockchain, developers actually have a lot more freedom and that means consumers have a lot more choice.&nbsp;



I think it&#8217;s a huge net positive for the world, but I think to reverse a trend of centralization is actually a pretty rare thing. I don&#8217;t even know if I can think of a historical example. There&#8217;s a great book called The Master Switch that talks about every new communications technology that comes out start[ing as] decentralized and ends up very, very centralized.&nbsp;



I&#8217;d like to think that crypto could be the exception to the rule, where by pushing the core of these big networks to a credibly neutral decentralized platform like Farcaster, you actually remove the ‘don&#8217;t be evil’ thing that the companies say and you move to something like ‘can&#8217;t be evil.’



This interview was edited for brevity and clarity.



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