Executives shed light on user retention issues in decentralized social networks

Executives shed light on user retention issues in decentralized social networks

Despite the rapid ascent of decentralized social network Friend tech, industry executives emphasize that decentralized social media apps are grappling with persistent onboarding and retention challenges.

Executives in the decentralized social (DeSo) media sphere have revealed that a staggering 99% of users venturing into DeSo for the first time end up disengaging, primarily due to cumbersome onboarding processes or a lack of connections.

Ed Moss, the head of growth at layer-1 blockchain firm DeSo, highlights that the process of transitioning from a cryptocurrency exchange to setting up a wallet with a Chrome extension and incurring high gas fees for on-chain or cross-chain transactions is both tedious and expensive for newcomers. He notes, “We’ve found that 99% of mainstream users will drop off at that first step, so simplifying this flow is mission critical.”

However, the hurdles start even earlier, as users must acquaint themselves with blockchain technology, smart contracts, and wallets before even signing up, deterring many from taking the initial step.

Suhail Kakar, the creator of DeSo app Onboard, likens the challenge to attending a party where you know no one. He believes DeSo apps must invest more effort in building their communities, likening the process to joining a party without acquaintances. Kakar anticipates that as more top-tier creators and influencers transition to blockchain platforms, a tipping point may be reached, enticing users to follow the trail of high-quality content.

It’s a steep climb, considering that established web2 social platforms like Facebook, Instagram, and Twitter boast billions of monthly active users, while decentralized social networks like Odysee struggle to reach a fraction of that audience.

Moss contends that another reason decentralized social media hasn’t gained widespread adoption is that Ethereum and similar smart contract platforms aren’t inherently designed to support social media applications at scale. He suggests the need for a “storage-heavy” or “infinite-state” blockchain capable of storing vast amounts of data cost-effectively.

Friend tech, a Base-powered social platform, has recently gained significant traction. It enables creators to engage with their audience using tokenized attention, where a creator’s influence is represented by tradable shares or keys that provide access to exclusive private chat rooms. Friend tech has attracted over 85,000 users from more than 127,000 wallets, with over 630,000 network requests since its launch.

Nevertheless, some industry experts speculate that this model could be a short-lived trend, while others believe Friend tech may already be losing momentum. Despite these challenges, sales revenue from decentralized social media networks is projected to grow substantially, reaching $12.1 billion in 2023 and exceeding $101 billion by 2033, with a compound annual growth rate of 23.6%, according to Future Markets Insights. Other contenders in the decentralized social media landscape include Jack Dorsey’s Bluesky, Mastodon, and Lens Protocol.