November 30, 2023
Web3
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0xScope

Web3 Data Industry Spotlight: Web3 Social Graphs

This spotlight article on Web3 social graph companies is part of the 0xScope team's ongoing series about the Web3 Data Industry.

Web3 social graph companies collect information on connections built by people on the blockchain, with the added advantage of privacy protections and decentralized incentive systems incorporated for willing participants. The concept of the social graph, popularized by Facebook co-founder Mark Zuckerberg, called for a visual representation of people's relationships and connections. In the hands of a centralized social network, it fuels news feeds and endless scrolling. On Web3, where users have the means to control their data while protecting their privacy, it empowers people to decide who they share their data with.

In the 0xScope Web3 Data Industry Report, we classified Web3 social graph companies under the Raw Data sector. Companies in this sector, which also includes Web3 database and oracle companies, provide data services that are more on the technical side, as the output they generate typically requires developer know-how to properly process and integrate into actionable insights.

Some social graph projects like Friend.tech, Steemit, DeSo, and Mirror.xyz focus on content creation by its community to power further connections. For our purposes, we focused on companies whose main objective is to create social graphs that will be more actionable for Web3 developers. Six of the seven companies listed under this category have a combined venture capital raise of $78.9M.

Back in June 2023, during Lens Protocol's $15M fundraising, Aave Companies CEO Stani Kulechov said this about the future of the Web3 social graph sector: "We’re filling the ecosystem with applications that are familiar to traditional social media, [and] we envision a future where all these applications and algorithms share monetization that comes from different use cases and features."

Web3 Social Graph Companies

We have included six companies in the Social Graph category of the 0xScope Web3 Data Industry Report. Here's a rundown of the basic information about these companies:

1. CyberConnect is a web3 social network that enables developers to create social applications empowering users to own their digital identities, content, connections, and interactions. Created in 2021, CyberConnect has built an ecosystem that comprises three components: CyberAccount for easy multi-chain onboarding, CyberGraph for censorship-resistant social data, and CyberNetwork to reduce transaction costs.

2. Farcaster is a decentralized social network that empowers developers to create innovative social networks. It is an open protocol that can support multiple client apps, just like email. Farcaster makes it easy for both Web3 developers and users to find and organize interest-based groups. It also features a hybrid on-chain and off-chain system that ensures decentralization for social networking apps while scaling to millions of users.

3. KNN3 offers a Web3 Data solution that leverages AI technology to provide sophisticated, user-friendly data services for both individual users and enterprises. KNN3's offerings are designed to enable algorithm-friendly interaction with Web3 data, making it accessible for use in decentralized applications and smart contracts.

4. Lens Protocol is an open-source social graph built using blockchain technology. It is designed to act as an infrastructure layer upon which developers can build their own Web3 social media applications that benefit from Web3 advantages such as follower-portability, censorship resistance, and incentivization mechanisms.

5. Relation builds an innovative decentralized social graph protocol for encoding relations in Web3. It creates a blockchain-native data layer through semantic SBTs (soulbound tokens) and a standard data format for developers, providing a trustless, open, and interoperable infrastructure for social interactions.

6. Releap Protocol is a decentralized social graph running on the Sui blockchain, designed to give creators the freedom to retain ownership over the connections they have built with their audience by creating fully customizable, user-owned social graphs.

Progress and Advantages

Social networking on Web3 is gaining momentum, as shown by the recent popularity of apps such as Friend.tech. This trend bodes well for companies that are building the underlying social graph infrastructure that powers current and upcoming Web3 social networks. Here are some recent updates, statistics, and milestones for each of the companies covered in the Web3 social graph sector:

1. CyberConnect is the company behind Link3, a popular Web3 profile-building website, and CyberWallet, a smart contract wallet that uses the ERC-4337 token standard for creating smart accounts for decentralized social networking. As of today, Link3 connects 1.3M CyberAccounts with about 3,000 verified organizations, while CyberWallet has surpassed 1M users. In addition, CyberConnect is one of the more well-funded Web3 companies in the social graph space, with a total of $29.4M raised from venture capital (VC) firms, as well as a $65.4M market cap (as of November 28) based on its $CYBER crypto token, which debuted in August 2023 through Binance Launchpool.

2. Farcaster currently hosts more than 20 apps and 15,000 users, who have made more than 1 million public posts. The project, which secured $30M in VC seed funding in 2022, revealed plans to migrate from Ethereum to Layer-2 network Optimism, saying that many of its most active users and developers are currently building on Optimism.

3. KNN3 has developed various apps such as TypoGraphy AI, an AI portal for Web3 knowledge and products, MashMesh, a Web3 multidimensional relationship explorer, and TopScore, a platform for managing social reputation, tracking social engagement, and monetizing content. TypoGraphy AI currently has 228,000 total users, 46,000 of which are active on a weekly basis. In addition, the company raised $2.4M in a seed round that was completed in September 2022.

4. Lens Protocol was launched in February 2022 by the team behind major DeFi platform Aave, and it has leveraged this connection to raise $15M in seed capital. It has since gained 100,000 native Web3 users on its platform, while its Lens Protocol Profiles NFT collection for user identity has seen a total volume of more than 3,000 $ETH. The project recently released its V2 upgrade on Polygon's main network, introducing a range of new features including multisig-managed profiles and tipping on "smart posts."

5. Relation has made two major updates this year: an airdrop of its native $REL token in May 2023 to reward its early adopters and the launch of Relation Graph, a social data layer that integrates, connects, and maps social data from both Web2 and Web3 data. In terms of funds raised, the company completed a seed round last year for an undisclosed amount.

6. Releap Protocol is a relatively new project that was introduced in July 2023 with a $2.1M funding round backed by Sui. The project then launched an IDO for its $REAP tokens the following month. As of today, Releap has 20,000 users, with integrations on Arweave and zkSync.

Challenges

The Web3 social graph segment is still in its early days, especially compared to the social media giants of today.

But before the sector reaches the point where it can provide viable competition to today's social media giants, it has to overcome some technical challenges that prevent Web3 social media apps from scaling. The main challenges that Web3 accounts and identities face are due to the unclear definition of wallet, account, and identity in Web3, as well as the current confusion in the concepts used for the implementation of digital identity on Web3. Ideally, there should be a solid identity architecture to help users access Web3 applications in different scenarios: public identity, proxy identity, and master identity.

For instance, CyberConnect relies on smart contract accounts that can be challenging to manage in a multi-chain setup, hence it created a system to generate deterministic account addresses from initial access keys, addressing the multi-chain problem. Another problem that social graph companies face is gas estimation for different blockchains, and this problem will likely persist until companies find a way to make these fees basically negligible.

Other problems in the sector include the likelihood that certain projects will fail after conception and development. For instance, Mem Protocol, a startup building Web3 tools for social networking, closed a $3.1 million funding round led by Andreessen Horowitz in November 2021. This project has since been quiet since 2022, with no major updates.

Despite these challenges, the increasing interest in Web3-built digital identity solutions and the industry's continued efforts to build a better social media paradigm will likely lead to major growth for the Web3 social graph sector in the future. But this growth will only be realized if the segment's companies continue building upon their solutions and eventually develop platforms that are as easy to use as Facebook and Tiktok.

If you think your company or project should be included in this report or our bigger report on the industry, please fill up this form or email us at community@0xscope.com.

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