In the span of 48 hours in late January, the two largest decentralized social protocols underwent significant leadership changes. Farcaster has transferred management of its flagship protocol client and main foundational launchpad, Clanker, to its main infrastructure provider, Neynar. Meanwhile, 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 signal a failure for social cryptos? For many critics, the response was immediate Yes. They argued that social crypto never outgrew the crypto bubble, failed to meaningfully compete with Web2 giants, and ultimately imploded under its own steam. For them, the ownership changes have confirmed that decentralized social media is a dead end – at best, a niche experiment. However, this view misinterprets a necessary market correction as a complete collapse.
Why the first save was difficult
What these transitions actually reveal is a long-overdue recognition of the reality that building social networks is not primarily about ideology or infrastructure, but about product quality, distribution, and incentives. The first wave of crypto-social struggled not because decentralization is inherently flawed, but because it attempted to recreate old social platforms while layering the complexity of crypto on top of them. Farcaster and Lens have made ambitious efforts to reinvent social media around user-owned identity, open graphs, and composable data. Both have attracted top-tier capital and world-class engineers. And yet neither has managed to significantly overtake the crypto-native audience.
A major misstep was to assume that social graphs would scale like blockchains, that you could first create a shared, open layer, and that value would accumulate naturally. In practice, social graphs are not composed simply by their existence. And it’s not just a lesson in cryptography. Decentralized social graphs have been around for years, with Mastodon and Nostr as obvious examples, but none have yet achieved lasting mainstream adoption. The pattern is consistent: users do not migrate for ideological reasons and portability does not overcome 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 an engaged minority, not a mass market hook.
Additionally, both ecosystems leaned too early into platform building and developer ecosystems, overestimating their ability to solve the cold start problem for builders. With user numbers in the 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 anchor customers who controlled the primary space.
Social media lives and dies by network effects, and crypto introduces additional frictions at every level: wallets, security assumptions, moderation trade-offs, and identity management. Convincing users to abandon platforms where their social graphics already exist is difficult under any circumstances. Asking them to do it while navigating unfamiliar tools sets the bar even higher.
From social media to financial social networks
Rather than seeking a decentralized analogue of Twitter, the conversation is moving towards what might best be described as financial social networks. In these systems, the primary function is not to disseminate opinions or accumulate followers, but to coordinate information, capital, and collective belief. Success is measured less by engagement metrics and more by signal quality and value flow.
Seen in this light, crypto may have already found its most compelling native social platform, but not in the form many expected. Prediction markets such as Polymarket function as engines of social coordination. They group opinions, reveal collective intelligence and transform discourse into probabilistic results. Above all, this template is not a copy of Web2 social media. It doesn’t rely on advertising, algorithmic outrage, or attention extraction. And it demonstrated its relevance beyond a purely crypto-native audience.
But financial social media is just the first wave of what crypto can unlock. Blockchains make certain end-user experiences possible, whereas Web2 rails do not, and speculation is only the first, most readable expression of this. Polymarket transforms the conversation into responsible conviction. Products like FOMO show how trading itself can become social, with transparency, shared context, and real-time feedback loops built into the chart.
The biggest opportunity goes well beyond a social + markets equation. These are social systems in which ownership, identity, and monetization are native rather than locked in. Digital ownership can transform content and status into lasting assets. Programmable incentives can align creators, curators, and communities with long-term behavior rather than short-term extraction. On-chain coordination can unlock new group behaviors, from collective financing and shared membership to shared governance and shared benefits. The point is not that crypto makes social media cheaper or more open, but rather that it expands the design space of what social media can be.
A reset, not an obituary
Declaring crypto-social “dead” misses the point. What ended was a particular vision of Web3 Social, one that assumed that traditional social media could be recreated on crypto rails with better incentives and better values.
A more difficult and concrete challenge remains: identifying where cryptography enables forms of social coordination that were previously impossible. Capital formation, information markets, community-owned infrastructure, and new incentive alignment mechanisms all remain open design spaces. Social crypto is not disappearing. He abandons his first hypotheses.
One reason the “death” narrative seems premature is that we may be looking for the next crypto social 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 would have created emergent behaviors that seem strangely social, creating religions, organizing governance, issuing manifestos, and even experimenting with privacy and encryption.
What’s surprising is that watching it has been captivating for humans, precisely because it feels like watching a new social class form in real time, negotiating norms, statuses, and even income strategies, sometimes explicitly trying to escape human readability. It is too early to know whether this is an enduring phenomenon or a fleeting narrative, but it is a bold reminder that new forms of society can emerge when participants, incentives and constraints change. If AI agents increasingly need to transact and coordinate in the digital world, blockchains provide a natural substrate for them to do so.
For now, it appears that the crypto social obituary was written for the wrong reason.
Long live social cryptos!
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