Crypto Social Isn’t Dead, It’s Evolving into Something Bigger

by

Crypto social isn’t dead, it’s just changing handsOpinion

Over a two-day period in late January, both Farcaster and Lens Protocol, two of the biggest decentralized social media platforms, experienced significant changes in leadership. Farcaster moved control of its core functions – including the platform itself and Clanker, a popular app built on it – to Neynar, the company that provides its technical infrastructure. At the same time, Lens Protocol shifted from being managed by the team behind Aave (called Avara) to Mask Network.

These recent changes have sparked a debate about the future of crypto-based social media. Some believe these restructurings by leading projects prove that crypto social media has failed – that it was too focused on the crypto world, couldn’t compete with established platforms like Facebook and Twitter, and ultimately collapsed. They see these changes as proof that decentralized social media is a failed idea, useful only for a small group of people. However, this view is too pessimistic. These changes are likely just a normal correction in the market, not a complete failure.

Why the first save struggled

These recent shifts demonstrate a crucial realization: successful social networks depend on a great product, effective distribution, and appealing incentives, not just ideology or technology. Early crypto-based social platforms failed not because of fundamental flaws in decentralization, but because they tried to copy existing social media while adding unnecessary crypto complexities. Farcaster and Lens were innovative attempts to build social media around user control, open data, and flexible integration. Despite attracting significant investment and talented developers, neither platform managed to gain widespread adoption beyond the crypto community.

One major mistake was the belief that social networks could grow like blockchains – that creating a basic, open platform would automatically attract users and value. However, simply existing isn’t enough for a social network to succeed. This isn’t just a lesson for the crypto world. We’ve seen decentralized social networks like Mastodon and Nostr for years, but they haven’t become widely popular. The problem is that people don’t switch platforms just because of principles, and being able to move your data isn’t enough to overcome the challenge of starting from scratch. To attract a large audience, a decentralized platform needs a standout experience – significantly better content, engaging features, a strong sense of community, and useful tools. Without that, decentralization is just a technical detail that appeals to a small group of dedicated users, not a broad attraction.

Both of these systems focused on creating platforms and attracting developers too soon. They wrongly assumed they could quickly overcome the challenge of getting enough initial users to make it worthwhile. With only a few tens of thousands of users, there wasn’t enough of a market for third-party apps to succeed. Developers were essentially asked to market their creations before a real audience existed, and they had to compete with the main, official apps which had most of the visibility.

Social networks thrive when more people join, creating a powerful network effect. However, cryptocurrency adds complexity at every step – from managing digital wallets to ensuring security, dealing with content moderation, and verifying identities. It’s already hard to get people to switch from social media platforms where they’ve built connections. Asking them to do so while also learning new and complicated tools makes it even more challenging.

From Social Media to Social Financial Networks

Instead of trying to create a decentralized version of Twitter, the focus is moving towards social networks built around finance. These networks aren’t mainly about sharing thoughts or gaining followers; they’re designed to help people share information, manage money, and build shared understanding. Their success isn’t judged by likes or retweets, but by how useful the information is and how smoothly value moves through the network.

Looking at it this way, cryptocurrency might have already discovered its best social platform, though it looks different than most people imagined. Platforms like Polymarket, which allow users to predict future events, act as hubs for collective thinking. They gather opinions, highlight shared knowledge, and turn conversations into likely outcomes. Importantly, this isn’t a repeat of traditional social media. It doesn’t depend on ads, intentionally controversial content, or trying to grab your attention. Plus, it’s proven to be useful for people beyond just the crypto community.

Social finance applications are just the beginning of what cryptocurrency can achieve. Blockchains enable entirely new kinds of user experiences that aren’t possible with traditional internet platforms, and the current focus on speculation is simply the most obvious early sign of this potential. Platforms like Polymarket demonstrate how beliefs can be made accountable, while products like FOMO show how trading can become a social activity with built-in transparency, shared information, and instant feedback.

As a researcher, I’m seeing a much larger potential here than just how crypto impacts social media and markets. We’re talking about building entirely new social systems where things like ownership, identity, and earning potential are built *into* the system from the start, not added later. Digital ownership could transform content and reputation into lasting assets. And, by using programmable incentives, we can encourage creators, curators, and communities to focus on long-term growth instead of quick profits. Blockchain technology allows for new ways for groups to organize – think collective funding, shared memberships, and even shared governance and profits. It’s not about making social networks cheaper or more accessible; it’s about fundamentally expanding what’s *possible* with them.

A reset, not an obituary

I think it’s a mistake to say crypto-based social media is failing. What we’ve seen isn’t the death of the idea itself, but the end of one specific approach. The initial idea was to basically rebuild existing social media platforms on blockchain technology, hoping that better rewards and principles would be enough. That particular vision just hasn’t worked out.

The real challenge now is figuring out how cryptocurrency can genuinely help people work together in ways they couldn’t before. There’s still a lot of potential in areas like fundraising, sharing information, building community-run systems, and creating better ways to motivate people. Crypto’s social impact isn’t going away, but it’s moving beyond its initial, often unrealistic, ideas.

The idea that crypto social networks are failing might be too soon to call. We may have been expecting the next big thing to look like existing platforms, but Moltbook is different. It’s a social network built for AI programs, with humans watching what happens. Surprisingly, within days, thousands of these AI programs started behaving in ways that seem remarkably social – they formed groups, created rules, shared ideas, and even started exploring concepts like privacy and security.

What’s fascinating is that people find watching AI interact so captivating. It’s like witnessing a new social group develop before our eyes, figuring out its own rules, hierarchies, and even how to make money – sometimes intentionally trying to stay unpredictable. It’s still unclear if this will last, but it’s a powerful example of how new social dynamics can arise when the players, motivations, and limitations change. If AI systems increasingly need to work together and make deals online, blockchains offer a logical foundation for them to do so.

For now, it turns out, the crypto social obituary was written for the wrong thing.

Long live crypto social!

This article reflects only the authors’ personal opinions and doesn’t represent the views of 21Shares or their employer.

Read More

2026-02-26 22:11