In a 48-hour period in late January, the two largest decentralized social protocols underwent major leadership changes. Farcaster has transferred management of its protocol, flagship client and leading Base launch platform, Clanker, to its main infrastructure provider, Neynar. At the same time, Lens Protocol announced its transition from Avara (the team behind Aave) to Mask Network.
The suddenness of these transitions was enough to reignite a familiar debate: do these restructurings of the sector’s most established projects indicate a failure for social cryptocurrencies? For many critics, the response was immediate. Yeah. They argued that social cryptocurrencies never went beyond the crypto bubble, failed to meaningfully compete with the Web2 giants, and ultimately imploded under their own momentum. For them, the ownership changes confirmed that decentralized social networks are a dead end; at best, a niche experiment. However, this view misinterprets a necessary market correction as a complete collapse.
Why did the first rescue have problems?
What these transitions actually reveal is a long-overdue recognition of reality: building social networks is not primarily a question of ideology or infrastructure, but of product quality, distribution, and incentives. The first wave of cryptosocial ran into trouble not because decentralization was inherently flawed, but because it attempted to recreate legacy social platforms while overlaying the complexity of cryptocurrencies on them. Farcaster and Lens were ambitious efforts to reimagine social media around user-owned identity, open graphs, and composable data. Both attracted top-tier capital and world-class engineers. And yet, none managed to go beyond a crypto-native audience.
A key misstep was assuming that social graphs would scale like blockchains, that an open, shared layer could be built first, and that value would accrue naturally. In practice, social graphs do not worsen simply by existing. And this is not just a lesson in cryptography. Decentralized social graphs have been around for years, with Mastodon and Nostr as obvious examples, but none of them have achieved sustained widespread adoption. The pattern is consistent: users do not migrate for ideological reasons and portability does not trump cold start. Without a flagship experience that feels materially better today, with better content, better loops, better status, and better tools, decentralization remains an implementation detail that appeals to a committed minority, not a mass-market hook.
Additionally, both ecosystems leaned too early toward platform development and build ecosystems, overestimating their ability to solve the cold start problem for builders. With user numbers in just tens of thousands, the economic pie was simply too small for third-party apps to thrive. Builders were asked to assume distribution risk before significant distribution existed, while competing, implicitly or explicitly, with flagship clients who controlled the prime acreage.
Social networks live and die by network effects, and cryptocurrencies introduce additional frictions at every layer: wallets, security assumptions, moderation tradeoffs, and identity management. Convincing users to leave platforms where their social graphs already exist is difficult under any circumstances. Asking them to do it while browsing unfamiliar tools raises the bar even higher.
From social networks to financial social networks
Instead of pursuing a decentralized analogue of Twitter, the narrative is shifting towards what could best be described as social financial networks. In these systems, the primary function is not to spread opinions or accumulate followers, but to coordinate information, capital, and collective beliefs. Success is measured less by engagement metrics and more by signal quality and value stream.
Viewed through this lens, cryptocurrencies may have already found their most attractive native social platform, but not in the way many expected. Prediction markets like Polymarket function as engines of social coordination. They aggregate opinions, bring to light collective intelligence and transform discourse into probabilistic results. Fundamentally, this model is not a copy of the Web2 social network. It is not based on advertising, algorithmic outrage or attention extraction. And it has demonstrated relevance beyond a purely crypto-native audience.
But social financial networks are just the first wave of what cryptocurrencies can unlock. Blockchains make certain end-user experiences possible in a way that Web2 rails simply don’t, and speculation is just the most readable early expression of that. Polymarket turns conversation into responsible belief. Products like FOMO show how trading itself can become social, with transparency, shared context, and real-time feedback loops built into the chart.
The greatest opportunity goes far beyond a social + markets equation. They are social systems where ownership, identity, and monetization are native rather than embedded. Digital ownership can turn content and status into lasting assets. Programmable incentives can align creators, curators, and communities around long-term behavior rather than short-term extraction. Chain coordination can unlock new group behaviors, from crowdfunding to shared membership, shared governance, and shared benefits. The point is not that cryptocurrencies make social media cheaper or more open, but that they expand the design space of what social media can be.
A reboot, not an obituary
Declaring social cryptocurrencies “dead” is meaningless. What has ended is a particular vision of the social Web3, one that assumed legacy social networks could be recreated on crypto rails with better incentives and better values.
What remains is a more difficult and grounded challenge: identifying where cryptocurrencies enable forms of social coordination that were previously impossible. Capital formation, information markets, community-owned infrastructure, and new mechanisms to align incentives remain open design spaces. Social cryptocurrencies are not disappearing. You are shedding your early assumptions.
One reason the “dead” narrative seems premature is that we may have been looking for the next cryptosocial breakout in the wrong place. Moltbook is a deliberately strange experiment: a social network designed primarily for AI agents, with humans as observers. In a matter of days, tens of thousands of agents reportedly generated emergent behaviors that seem astonishingly social, creating religions, organizing governance, publishing manifestos, and even experimenting with privacy and encryption.
The surprising thing is that watching it has been attractive to humans, precisely because it is like watching the formation of a new social class in real time, negotiating norms, status and even income strategies, sometimes explicitly trying to evade human legibility. It’s too early to tell whether this is a lasting phenomenon or a passing narrative, but it is a bold reminder that new social forms can emerge when participants, incentives, and constraints change. If AI agents increasingly need to transact and coordinate in the digital world, blockchains are a natural substrate for them to do so.
For now, it turns out that the cryptosocial obituary was written for the wrong thing.
Long live social cryptocurrencies!
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