Vision
Moving from DeFi to DeSo
In this paper, we introduce DeSo, short for "decentralized social," the first and only blockchain custom-built from the ground up to power and scale a new category of decentralized social applications to one billion users.
While much research has been dedicated to scaling "decentralized finance" or "DeFi" applications, relatively little has been invested in building blockchains that can scale social media applications, even though the latter category is arguably just as large, if not larger, and holds just as much promise for value creation.
Moreover, while several general-purpose blockchains (Ethereum, Solana, Polygon, etc.) tout their ability to scale to tens of thousands of "transactions per second" — scaling up "posts per second" is a very different problem.
Todays blockchains are not currently equipped to handle the storage and indexing requirements of social media applications at scale.
To use an analogy from the centralized world, the infrastructure that powers the New York Stock Exchange today is vastly different from that which powers Facebook, Instagram, or Twitter — they have completely different architectures tailored to support their respective applications at a massive scale.
Similarly, our thesis with DeSo is that a blockchain that can scale decentralized social applications to one billion users will likely look vastly different than a blockchain that can scale DeFi apps to the same level.
Thus, we believe the future of crypto does not consist of a single general-purpose blockchain that rules them all, but rather a series of dominant, specialized blockchains, each tailored to a particular category of applications.
Centralization of Social Media
DeSo represents a more than three-year effort to create a blockchain capable of decentralizing the social media category, and we believe it presents the first clear path to solving the existing problems that plague social media today.
Today, social media is even more centralized than the financial industry was prior to the creation of Bitcoin. A handful of private companies effectively control public discourse, and earn monopoly profits off of content that they don't even create.
Meanwhile, the creators who actually produce this content are underpaid, under-engaged, and under-monetized thanks to an outdated ads-driven business model.
In addition to all of this, the ads-driven business model also forces social media companies to keep a walled garden around content created on their platforms, preventing external developers from innovating or building apps on top of it, and giving users and creators no choice but to continue using apps that solely they control.
These problems stem from the fact that the data and content created by users today is privately owned by a handful of companies, rather than publicly accessible as an open utility.
Because only a handful of companies have access to the content, only these companies can curate competitive feeds, only these companies can build competitive new features and apps, and only these companies can monetize this content — content that isn't even created by these companies in the first place.
We're stuck in a loop:
- Users have to use these companies' apps because they have a monopoly on the content
- This forces creators into continuing to give their content up to them in order to get reach
This results in a vicious cycle that continues to empower these companies at the expense of creators and society as a whole.
These companies have managed to create a global network effect around a private pool of content that they solely monopolize.
Moreover, this centralization of content seems unavoidable: There's value in combining all of the content into a single pool, since it allows for curation at a global scale, but whoever we put in charge of maintaining the pool is ultimately going to become a centralized gatekeeper like what we have today.
A solution would arise if we had a way to shift the network effect to a public pool of content that no individual entity controls — but can it be done?
We believe all of these problems can be solved by decentralizing social media in the same way Bitcoin and Ethereum are decentralizing the financial system.
In particular, Bitcoin created a way to store transactions on a public ledger that no individual entity can monopolize, which has led to the disruption of the financial industry, and we believe this technology can now be extended, for the first time, to run a social network without needing to rely on a centralized gatekeeper.
Bitcoin and Ethereum have shown that dominant platforms can be built around open code and open data, rather than around private companies that monopolize their data and benefit shareholders at the expense of everyone else.
Bitcoin and Ethereum don't have data moats to protect.
In fact, the more open they are and the more people that build on top of them, the more value accrues to Bitcoin and Ethereum holders.
This open model for software is already disrupting financial institutions all over the world, from banks to exchanges, and we think, for the first time, this model can be extended to disrupt the social media giants and their outdated ads-driven business models.
If we can start putting social media content into a public blockchain, rather than giving it to a handful of private companies to monopolize, we believe we can create an economy of scale around that blockchain that is powerful enough to rival, and ultimately surpass, what the traditional social media giants have created.
In some sense, we can solve a collective action problem among independent publishers by making it individually rational for them to contribute their content to a new globally-shared pool that they can never be di-intermediated from and that, for the first time, isn't controlled by a single company.
The Ultimate Vision
Today, a post submitted to Instagram, TikTok, or Twitter belongs to these corporations, rather than the creator who posted it. And the monetization goes predominantly to these corporations as a result.
In contrast, DeSo stores all of its data on a public blockchain, which means that anyone in the world can run a node that exposes their own curated feed.
Today, there are over 100 other projects running nodes and building apps on DeSo as well.
The Future "Curator" Economy
Moreover, there is no reason why other "verticalized" players can't enter the market to create feeds that they're uniquely suited toward curating. For example, imagine if ESPN ran a node that curated a feed of the best sports content.
Or if Politico ran a node that curated a feed of the best political content. Additionally, since DeSo is fully open-source, these players could even customize their UI and build custom algorithms to rank the influencers and posts in a way that serves their specific target customer.
We think this will quickly move us from a world in which a handful of juggernauts control the dominant feeds to one in which consumers will have thousands of feeds to choose from, each with its own specific focus.
On top of that, storing all of the data on a public blockchain makes it so that, with one engineer, anyone can build a social media experience that's competitive with the existing incumbents. It cannot be overstated the extent to which this lowers the barrier to entry for creating new social media products.
It becomes possible for existing publishers to trivially spin up social apps and experiences as direct adjacencies to their core business, and allows upstarts to innovate on a relatively even footing with megacorps for the first time. Compare this to today where building a competitive social app generally requires building a billion-user data moat first.
The best part is that anyone who runs a node to curate their own feed also contributes data back to the public pool of profiles, posts, follows, etc... that's stored on the public blockchain.
A post or a like on ESPN's node can be surfaced on Politico's feed.
A post made in China can be surfaced on a feed running on a node in America and vice versa.
And with every node that runs, more content gets contributed back to the global data pool stored on the blockchain, making every other node on the network more powerful and more engaging to users.
In some sense, DeSo can solve a collective action problem among independent publishers: Instead of being forced to contribute to a privately-owned data pool controlled by a megacorp who's not aligned with them, publishers can now contribute to a public data pool that nobody controls and that they'll never be dis-intermediated from.
Thus we can move from a world in which data is a heavily guarded, privately-owned resource to one in which it is more like a globally accessible utility that anyone can build on.
Importantly, there is a strong incentive for publishers to contribute data back to the blockchain because not doing so would deter the top creators from wanting to publish on them.
After all, why would you publish solely on a closed platform that exclusively owns your data when you could additionally publish to the blockchain and have your post instantly available to every node/feed that's running on the internet?
We think all of the above can give the creators unprecedented reach, and a more direct relationship with their followers than has been afforded to them with existing platforms. But reach is only one side of the coin — the other side is monetization.
The Future "Creator" Economy
Social tokens, social NFTs, and social tipping, three categories of products pioneered by DeSo, are already changing the game in terms of how creators monetize on the internet, but they're only the beginning. Because DeSo is money-native and open-source, anyone in the world can start to experiment with new ways for creators to monetize by building an app on top of DeSo.
For example, imagine a major creator who wants to start offering premium content in exchange for a monthly subscription. All it takes is for one person on the internet to build this feature, and the entire ecosystem of DeSo applications gets access to it instantly.
The same goes for other features like an inbox where creators can be paid to repost content, or paid to answer messages from their followers.
And this goes for other things like detecting harmful content or weeding out spam, where the best machine learning researchers in the world can build solutions, with access to the full firehose of data, without asking for permission, no matter where they are.
The Future of Open Standards
The DeSo blockchain is fundamentally an open protocol that the entire world can build on collaboratively, which we believe will ultimately create even more ways to unlock creators' true potential, and which will bring competition and innovation back to social media.
Moreover, because DeSo is money-native, new signals emerge that can be used to rank content more effectively. For example, the first experiment that was launched by the bitclout.com app was ranking comments by the social token price of the commenter.
Amazingly, this extremely simple ranking mechanism has already produced results that are competitive with centralized platforms. Ranking messages by coin price has also significantly reduced spam for influencers in a way that's truly unique to DeSo apps, and this is still just the beginning.
Imagine what else will be built off of the "$DESO Signal" once the entire world starts building on and contributing to DeSo.
Finally, it's important to mention that we designed DeSo from the ground up so that the incentives of the system keep it decentralized, even in the long run. Creators have a strong incentive to post directly to the blockchain, rather than to a centralized app that withholds their content from the blockchain.
And there's virtually no possibility for developers to lose access to data or APIs because all the data is publicly available on the blockchain, and they already have all the data when they run a node.
Compare this to traditional social media companies, which start open to build a network effect and then shut off access after they've built a winning data moat.
With your help, we hope to build the DeSo blockchain into an enduring positive force for humanity that can bring competition and innovation back to the internet. The internet started as a fundamentally decentralized ecosystem, but we’re at a point in history where things have concentrated and where innovating is harder than it used to be.
After much thought over the past several years, we are convinced that the pendulum will swing back toward decentralization, perhaps permanently, and we all have an opportunity to be a part of that.
A new generation of applications that the entire world can build collaboratively, unlocking the full potential of human ingenuity.