New users come to Farcaster for two reasons: a) they find Warpcast a great social product and see their friends there and b) because of products built on the Farcaster protocol they want to use (like clanker, or super).

The main driver for (a) is the good work of Dan, Varun and the Merkle factory team. Not much to say here besides noting their remarkable execution and prompt recovery from actions that arguably adversely impacted (b).

(b) is the more interesting factor because it's the driver for Farcaster's long-term growth and a flywheel. Adoption looks like this:

devs come to build new experiences that can only exist on an open social graph →some of these experiments (like degen, supercast, clanker) work out and attract people beyond the Farcaster ecosystem → Farcaster becomes more attractive for more devs to come

The critical assumption is that devs want to build on Farcaster. An encouraging anecdotal data point is that in the past 12 months I've met hundreds of teams building full time in the ecosystem, without a sliver of inorganic financial incentives. I emphasise inorganic, because founders are economically motivated. They want to build on Farcaster because their products can become great businesses and generate organic revenue.

Developers and founders come because a) they can build products that can't exist anywhere else or b) because they can tap into a growing, high-quality user base. Farcaster users are eager to try new products and willing to spend more than typical X or Threads users (great potential Average Revenue per User). They can make a killing by building net new things and tapping into this great distribution channel.

And that's how Farcaster wins: by being a flourishing economy. Where good products turn into revenue. Where the most ambitious founders in crypto and beyond bet the house. Where early adopters turn to find the next brilliant app or the next 1000x. And where the next 10m users in crypto get onboarded.

One way to check this thesis is to treat revenue from Farcaster companies as a leading indicator for user influx. You can find these indicators on the farconomy dashboard we built with Woj.

One of my favorite crypto use cases is borrowing for one-off expenses.

I recently paid a large deposit. Instead of selling my savings account assets, I borrowed stables on Morpho to offramp via Coinbase. Et voilà.

In a few minutes, a crypto loan replenishes my bank account. This is a more seamless experience than anything outside of crypto. I realised it was so good because it was instantaneous because it did not require any human verification.

In crypto, loans are secured by assets worth more than the loan, similar to the mechanics of a mortgage. As long as I remain solvent, meaning my collateral’s value exceeds the loan value by a margin of security, my credit score or risk doesn’t matter. When I borrow, I don’t need permission to someone who’d verify my claims - everything is in a smart contract that will enforce those rules. There is no need for verification and the operation is thus instant.

A major cost in lending is verifying borrower information. The industry relies on underwriting models that use personal information (age, salary, employment, etc.) to make risk assessments and lending decisions. For the model to be accurate, the information must be verified - self reporting isn’t enough. Every additional user has a high marginal cost due to verification.

I argue that crypto and zero-knowledge proofs bring verification costs to zero.

This mini-series examines if the decentralization trend in energy networks makes crypto and DePin good for these markets.

The grid is becoming more decentralized. Households and companies can generate and store energy with inexpensive investments, sometimes below the 5-figure mark.

This is good; it increases the renewable energy share in the overall mix and adds independent resources to adjust grid capacity. When most homes have batteries, it smoothens consumption and reduces peak loads.

The assumption is that grid operators are able to tap into this unused and flexible capacity. They need to 1) know available capacity and 2) control the energy resource.

The difficulty is that individual participants own different hardware, are spread geographically, and have varying grid connections.

The most elegant mechanism to address the issue is Virtual Power Plants (VPPs). They aggregate distributed energy resources like rooftop solar panels, home batteries, and electric vehicles into a single, controllable entity.

They offer 1) products for better usage control and 2) financial incentives, like reduced rates, cash payments for energy contributions, or credits towards future energy bills.

In practice, this is an offer available to users who own DERs. The typical contract includes financial rewards over time for giving control of resources during periods of instability, like summer afternoons from 4pm to 9pm.

New users come to Farcaster for two reasons: a) they find Warpcast a great social product and see their friends there and b) because of products built on the Farcaster protocol they want to use (like clanker, or super).

The main driver for (a) is the good work of Dan, Varun and the Merkle factory team. Not much to say here besides noting their remarkable execution and prompt recovery from actions that arguably adversely impacted (b).

(b) is the more interesting factor because it's the driver for Farcaster's long-term growth and a flywheel. Adoption looks like this:

devs come to build new experiences that can only exist on an open social graph →some of these experiments (like degen, supercast, clanker) work out and attract people beyond the Farcaster ecosystem → Farcaster becomes more attractive for more devs to come

The critical assumption is that devs want to build on Farcaster. An encouraging anecdotal data point is that in the past 12 months I've met hundreds of teams building full time in the ecosystem, without a sliver of inorganic financial incentives. I emphasise inorganic, because founders are economically motivated. They want to build on Farcaster because their products can become great businesses and generate organic revenue.

Developers and founders come because a) they can build products that can't exist anywhere else or b) because they can tap into a growing, high-quality user base. Farcaster users are eager to try new products and willing to spend more than typical X or Threads users (great potential Average Revenue per User). They can make a killing by building net new things and tapping into this great distribution channel.

And that's how Farcaster wins: by being a flourishing economy. Where good products turn into revenue. Where the most ambitious founders in crypto and beyond bet the house. Where early adopters turn to find the next brilliant app or the next 1000x. And where the next 10m users in crypto get onboarded.

One way to check this thesis is to treat revenue from Farcaster companies as a leading indicator for user influx. You can find these indicators on the farconomy dashboard we built with Woj.

One of my favorite crypto use cases is borrowing for one-off expenses.

I recently paid a large deposit. Instead of selling my savings account assets, I borrowed stables on Morpho to offramp via Coinbase. Et voilà.

In a few minutes, a crypto loan replenishes my bank account. This is a more seamless experience than anything outside of crypto. I realised it was so good because it was instantaneous because it did not require any human verification.

In crypto, loans are secured by assets worth more than the loan, similar to the mechanics of a mortgage. As long as I remain solvent, meaning my collateral’s value exceeds the loan value by a margin of security, my credit score or risk doesn’t matter. When I borrow, I don’t need permission to someone who’d verify my claims - everything is in a smart contract that will enforce those rules. There is no need for verification and the operation is thus instant.

A major cost in lending is verifying borrower information. The industry relies on underwriting models that use personal information (age, salary, employment, etc.) to make risk assessments and lending decisions. For the model to be accurate, the information must be verified - self reporting isn’t enough. Every additional user has a high marginal cost due to verification.

I argue that crypto and zero-knowledge proofs bring verification costs to zero.

This mini-series examines if the decentralization trend in energy networks makes crypto and DePin good for these markets.

The grid is becoming more decentralized. Households and companies can generate and store energy with inexpensive investments, sometimes below the 5-figure mark.

This is good; it increases the renewable energy share in the overall mix and adds independent resources to adjust grid capacity. When most homes have batteries, it smoothens consumption and reduces peak loads.

The assumption is that grid operators are able to tap into this unused and flexible capacity. They need to 1) know available capacity and 2) control the energy resource.

The difficulty is that individual participants own different hardware, are spread geographically, and have varying grid connections.

The most elegant mechanism to address the issue is Virtual Power Plants (VPPs). They aggregate distributed energy resources like rooftop solar panels, home batteries, and electric vehicles into a single, controllable entity.

They offer 1) products for better usage control and 2) financial incentives, like reduced rates, cash payments for energy contributions, or credits towards future energy bills.

In practice, this is an offer available to users who own DERs. The typical contract includes financial rewards over time for giving control of resources during periods of instability, like summer afternoons from 4pm to 9pm.