The Funding: Is decentralized social ‘dead’ — or is a revival coming?

Decentralized social (DeSoc) or SocialFi is at a crossroads following the recent transfers of stewardship for Farcaster to Neynar and Lens Protocol to Mask Network. Farcaster's parent company, Merkle Manufactory, is returning its $180 million in funding to investors, clarifying the deal was not an acquisition. Both protocols built strong infrastructure but failed to gain traction beyond crypto-native users, leading some investors to shift focus back to DeFi.

Experts cite several reasons for DeSoc's struggles, including onboarding friction, fragmented user experiences, limited distribution, and the overwhelming network effects of Web2 giants like TikTok and Instagram. A recurring pitfall has been over-financialization, where speculative incentives failed to create durable social loops or compete with established platforms.

Looking ahead, views are divided. Optimists believe a revival requires a more product-driven approach with seamless execution, while others suggest a breakthrough depends on fundamentally rethinking monetization, perhaps through protocol-level ad auctions. Even Ethereum co-founder Vitalik Buterin expressed renewed interest in DeSoc, though skeptics remain unconvinced that DeSoc can overcome the dominance of Web2.

(Source：The Block)