From CeSo to DeSo

3 min readNov 27, 2023

Let’s talk about social media, the problems with centralized (Web2 or CeSo) variants, and the road to successful decentralized (Web3 or DeSo) solutions.

Every few months, a blogger or media outlet does a deep dive on social media algorithms and concludes they tend toward dangerous extremes (the WSJ has a good article on Instagram Reels today). These investigations rightly conclude that whatever safety measures get put into place don’t stand a chance against algos designed to maximize engagement.

This is a fundamental incentive problem, which us crypto folks understand better than anyone. Web2 social platforms don’t exist to “make the world a better place.” They exist to maximize shareholder value, which is almost entirely derived from advertising, which is almost entirely tied to “engagement,” which is just a nicer way of getting users addicted, which requires extreme and polarizing content.

It’s a classic quantity vs quality issue, with disturbing parallels to how opioid makers who started out with a noble mission created a generation of addicts. We can try to shame Big Tech or call for greater regulation, but the best solution to any incentive problem is better incentives, combined with more transparency.

The problem is that no such model exists for Web2 social. Management has a responsibility to shareholders, and their profits must ultimately come at the expense of users. Management also doesn’t want to open source their algo, it’s their secret sauce. They also worry that people would game their algorithms. Perhaps a false belief given how gamed they already are, but that’s the table stakes.

All of this should be a great opening for Web3 social media. But disintermediating successful platforms with network effects measured in the billions (of users) is hard.

If there’s one thing I’ve been consistently wrong about in crypto, it’s the difficulty of moving from the philosophical stage (“it should work”) to the product stage (“here is how”) to the success stage (“it’s working!”). The good news is that these stages are not mutually exclusive.

The more ordinary users (which includes creators and curators) become disenfranchised with the toxicity of Web2 social, the more likely they are to try something different. And the more the owners of these platforms feel the heat, the more likely they are to pivot. More platforms are starting to pay content creators (somewhat aligning incentives) and Twitter is going hard into a subscription model (Sybil resistance). But none feel the heat from a decentralized alternative, so there’s no urgency.

Smart people are trying different approaches to DeSo, which is great. But my first hunch is that none have cracked the code yet, in part because their user experiences are too similar to CeSo. The content might be ownable via NFTs, the algos might be transparent, the social graphs might be composable, and governance might be user-controlled, but the user journey is often familiar.

YouTube bears little resemblance to the network broadcast model it disrupted, so it stands to reason that whatever replaces it looks radically different from YouTube.

One notable exception is Friend.Tech, its UX is different. But it’s mostly different in embracing the pure financialization of content creation.

My other hunch is that giving into this tendency is a mistake for crypto projects — not just in DeSo but for all non-financial applications. So many crypto projects have fallen into the financialization trap, from online communities to gaming to the Metaverse. But the results have been bad: a pump, followed by a dump, and a new class of potential adoptees burned.

Ordinary people don’t want to participate in casinos that happen to be a MMO or social media platform. They want to play fun games and post quality content, then enjoy certain property rights should their value contribution be unique.

So what does all of that look like for DeSo? I unfortunately have no idea. But if history is any guide, someone is building it as we speak. Web2 social has become so dangerous to society that the need for an alternative is arguably existential. That’s the mother of all incentives.