Come Build the Future of Web3

Hi Everyone!

Long time no see. In fact, it's been close to 1 year since my last edition of this newsletter ??Some of you have reached out to me through LinkedIn DMs and asked me what happened. Well the short answer is, A LOT has happened. Among many other changes in my life the following events occurred since my last post:

• I left my product job at LinkedIn
• I moved out of California to Austin, TX
• I advised/consulted for DeFi protocols on Ethereum that were over 8 figures in market cap
• I joined the DeSo Foundation as Head of Strategy & Operations

While each of these events is probably worthy of a blog post in and of itself, I wanted to devote this article to this last bullet point, as my passion for DeSo has grown exponentially and I wanted to share my experience with this audience.

The awesome part is that I expect this post to spark interest in many readers of this post, so I have also included a number of call to actions for anyone who wants to get involved*.

*Note: This is a massive divergence from previous jobs of mine. I couldn't invite people to come help build Intuit or LinkedIn, since these are closed ecosystems. As you will soon see, DeSo is an open ecosystem & represents the future of the web.

The Fundamentals of Web3

Let's start with the basics...

First came Bitcoin

On October 31st, 2008 an anonymous actor by the name of Satoshi Nakamoto published the Bitcoin white paper. Effectively what Satoshi did was combine a number of existing technologies (distributed databases, ledgers, cryptography) into an elegant solution for a previously impossible problem to solve: How do you create a digital financial system that does not rely on trusted 3rd party intermediaries?

The way Bitcoin accomplished this was that it took the existing concept of a ledger and instead of having that ledger be maintained by a central party (i.e. a bank), it allowed ANYONE to spin up a piece of hardware and participate in the network by storing a shared copy of the ledger + offering computational resources to keep this ledger secure/updated.

The way in which updates to this distributed ledger are made is via blocks of transactions that are approved by the network collectively at a specific rate (for details of how this consensus is reached see the white paper above).

When a new block is confirmed by the network, it is appended to the existing confirmed blocks (hence the name Blockchain). And to incentivize participants (aka "miners") to offer computational energy to help reach consensus, a native cryptocurrency called "Bitcoin" was created and is distributed to these miners and used by the other participants in the network.

What Bitcoin created was a new paradigm in which there was now a completely digital financial system that did not rely on trusted central 3rd parties & anyone could participate in.

Then came Ethereum

As revolutionary as the introduction of Bitcoin was, it still had major limitations. Namely, because the Bitcoin network was designed to be to be as secure and decentralized as possible, it was inherently not very flexible. For instance, while Bitcoin is good for storing assets and creating transactions between addresses, you can't easily build other types of apps on top of it.

Vitalik Buterin, realized the shortcomings of Bitcoin and decided to launch a new blockchain that had a programming layer built on top of it. This programming layer is built with a turing-complete programming language called Solidity, and allows developers to create smart contracts.

Smart contracts + Ethereum opened the door to a host of new applications and crypto primitives. For instance, the ERC-20 "fungible token" standard opened the door for the ICO craze of 2017. Then came the famous Decentralized Finance or "DeFi" summer of 2020 that helped give accelerate the growth of projects like Uniswap and Compound. And most recently has been the meteoric rise of NFTs (non-fungible tokens) in 2021.

Similar to how Bitcoin's shortcomings gave rise to Ethereum, other layer 1 blockchains have since popped up to try to improve in areas where Ethereum falls short, such as scalability*.

*Note: These other blockchains always have some level of trade-off in another area in order to deliver this benefit. This is known as the blockchain trilemma.

So what is Web3?

While the above was a great refresher, you may still be wondering, what the hell does Web3 actually mean? In very simple terms:

Web3 describes a future in which the majority of the applications used by people on the internet are not centralized applications run by big tech companies; but rather, decentralized protocols built on top of blockchains and collectively owned/governed by the user base.

I personally believe that this future is not only possible, but actually inevitable. However, if you consider what decentralized apps exist today you'll quickly pick up on a trend... they're all financial based applications.

The Future of Web3

If you were to stop and consider the apps you used the most today, which ones would they be? Chances are there would be a number of social media apps in that list such as: Facebook, Twitter, Instagram, Tik Tok, and LinkedIn.

Yet, despite the prevalence of social media apps in everyone's lives, there have been virtually no Web3 social media apps built that have reached any level of mainstream appeal.

This in a nutshell, is the single biggest factor that has held the masses back from adoption of Web3. The reality is that decentralized finance apps only have so much demand. If we ever want to bring Web3 to billions of people around the world, we need decentralized social media apps as well.

So why aren't there any popular Web3 social media apps?

The next natural question is: Well why haven't there been any successful Web3 social media apps?

The answer to this question is actually a very simple one:

Existing layer 1 blockchains (like Bitcoin, Ethereum, Solana, etc.) are not built to handle the storage requirements of social media applications.

That is because these other blockchains are "general purpose" and don't implement any custom indexing or storage optimizations for the content/data stored on-chain. This in turn, makes them great for Decentralized Finance apps but terrible for Decentralized Social apps since it is prohibitively expensive to launch social apps on top of them (see image below).

I'll spare you the deep technical analysis, but if you want to learn the details of why this is, and to check the math yourself, I encourage you to read this blog post.

Introducing DeSo

Our founder, Nader Al-Naji, recognized this issue with other blockchains and decided to fix it. DeSo, is the first layer 1 blockchain that is custom-built to scale decentralized social media applications to billions of users.

Unlike these other blockchains, our blockchain has a true technical edge for social apps, which means that it costs less than a fraction of a penny to do things like transfer funds, mint an NFT, send a DM or make a social post. In contrast, it can costs anywhere from a few dollars (to hundreds of dollars) on other blockchains to do this.

To put this into even more tangible terms, I've spent less than 7 cents during my 6 months of using DeSo every day, whereas, I've spent over $150+ just to do one transaction on Ethereum!

But wait, why put social on a blockchain?

Assuming you have processed everything I have written above, your next question might be, well why does social even belong on a blockchain?

I like to frame my answer from the perspective of different audiences.

For users, putting your social graph + content on a distributed database allows for data portability (imagine if your Instagram followers could be ported to Twitter with the click of a button) and censorship resistance (no single company can own your data and de-platform you).

For creators, it offers an opportunity to own your audience and directly monetize your content. Despite creating a lot of value for LinkedIn as a creator with posts like these, I have NEVER seen a $ from LinkedIn for my content.

For developers, it offers an opportunity for any developer or team around the world to build on top of the DeSo blockchain and instantly have access to every user (and their content) who has ever used a DeSo app at any point in time.

How to get involved with DeSo

Decentralized social media represents the future of Web3, and is without a doubt one of the biggest opportunities in the next few decades across all areas of society.

The DeSo Foundation is extremely well positioned to capitalize on this opportunity. In the 10 months since our inception we have already raised $200 Million from big names including: Coinbase Ventures, Winklevoss Capital, a16z, and more.

Furthermore, we have already seen 200+ apps launched on the DeSo blockchain, over 400K creator accounts created to use the apps, and over 60M confirmed transactions.

If you have been intrigued by what you have read so far, here are some ways to get involved:

• Join the DeSo Foundation: We are actively hiring for roles across many functions. Come and join one of the most innovative & hard-working teams in the Web3 space. We also pay top of the market for every role.
• Build an app on top of DeSo: It's easy to launch an app on DeSo (you don't need to learn Solidity or Rust). Check out our documentation to learn more.
• Apply for funding: We launched our $50M Octane Fund, to invest in teams building companies on top of DeSo. Apply today -- we already allocated $11M in our first cohort.
• Try a Web3 app: If you've never been interested in DeFi apps, then try a social app on DeSo. I recommend Diamondapp.com or Entre (LinkedIn alternative) for a taste of the DeSo ecosystem.

Conclusion

While I haven't been active on LinkedIn as much lately, I can say that this is the most motivated and fulfilled I have ever felt in my career.

If you've ever wished you could have been early to Facebook, Google, Bitcoin or Ethereum, well this me telling you that the opportunity is staring you in the eyes right now.

Join me and hundreds of thousands of others on the DeSo blockchain.

Join me in building the future of Web3.

-Alex Valaitis