Web3 social media platforms (SocialFi) based on blockchain technology are evolving in a direction that directly attributes data ownership and revenue generation structures, which were previously monopolized by large tech companies, to creators and users1. As an environment is established where creators can break away from centralized censorship and opaque algorithmic control, tokenize their digital identities and content on-chain, and generate revenue directly without intermediaries, the ecosystem is expanding rapidly1. Amidst this historical trend, the Hive blockchain is regarded as a first-generation decentralized social network that has pioneered fee-free fast transactions and an inflation-based content reward system through its proprietary Delegated Proof of Stake (DPoS) consensus algorithm, 'Proof of Brain (PoB),' since its hard fork from Steem in 2020.5
The Hive ecosystem operates based on a dual-token system consisting of HIVE Coin, which is the core of governance and rewards, and HBD (Hive Backed Dollar), an algorithmic stablecoin offering a high annual interest rate (APR) of 20%. It has successfully produced powerful second-layer applications with strong community foundations, such as InLeo, PeakD, and Splinterlands.7 While HIVE’s achievements in rejecting the control of a single entity and realizing true community-led decentralization are remarkable, the blockchain industry is currently threatening HIVE’s leading position as new SocialFi platforms—centered around the Ethereum (EVM) and Solana ecosystems—are growing explosively. These platforms feature innovative reward mechanisms combining modularity, interoperability, and sophisticated game theory.
This report identifies successful altcoin projects within other blockchain ecosystems that boast the most active communities and outstanding reward scale and innovation, and conducts an in-depth analysis of their technical and economic success factors. It also explores specific methodologies for users to maximize rewards within these ecosystems. Ultimately, based on these analysis results, this report presents specific and strategic development directions for the HIVE blockchain (HIVE, HBD) and the InLeo community—a core social platform of the second layer—to regain leadership in the next-generation Web3 social ecosystem and achieve sustainable growth.
To accurately understand the competitive landscape facing Hive, it is necessary to grasp the structures of the leading protocols currently dominating the Web3 Social Pie market. In particular, Lens Protocol, based on Polygon and zkSync, and Discover (DSCVR), based on Solana and ICP, present entirely new approaches in terms of community rewards and interaction.
Lens Protocol is a social graph infrastructure that provides complete data ownership and composability by recording user profiles, follower relationships, and content posts on-chain in the form of Non-Fungible Tokens (NFTs).12 It guarantees powerful mobility, allowing users to carry their social graphs intact to other applications even if they leave a specific platform (client).14 Recently, Lens Protocol introduced an innovative feature called 'Open Actions' along with its V3 upgrade.12 Open Actions is a feature that allows external smart contract calls to be directly embedded within content on social media feeds, providing an environment where users can instantly swap tokens, join a DAO, and mint NFTs without needing to navigate to an external site while reading a post12. Furthermore, by combining with Chainlink Functions to enable complex marketing promotions that link Web2 data (e.g., Meta, Twitter) with Web3 on-chain events, it is transforming simple text-based social media into a multidimensional DeFi and commerce hub17.
Meanwhile, DSCVR is a Web3 community building platform with over 200,000 active users based on the Solana and Internet Computing (ICP) blockchains11. While providing an intuitive user experience (UX) similar to existing Web2 social media, it integrates full on-chain governance and crypto-native features on the backend19. In particular, DSCVR has fostered explosive reward-driven community growth by collaborating with various projects within the Solana ecosystem (e.g., Magic Eden, MonkeDAO) to provide the ability to trade NFTs and receive airdrops directly within the community feed, and by supporting Bitcoin (BTC) tipping and airdrop functions without the need for a bridge.11 The mechanism of awarding points to users who log in and are active daily, thereby creating anticipation for future token airdrops, has dramatically increased user retention.22
| Protocol | Underlying Blockchain | Core Architecture and Reward Mechanism | Key Features and Strengths |
| :---- | :---- | :---- | :---- |
| Lens Protocol | Polygon, zkSync | On-chain social graph NFTization, 'Open Action' smart contract invocation | Perfect guarantee of data mobility, direct DeFi interaction and monetization within posts.12. |
| DSCVR | Solana, ICP | Portal-based community, Token-gating, Point-based airdrop | Bridgeless P2P Bitcoin tipping, an overwhelming user pool of over 200,000, and Web2-friendly UX11. |
| Hive / InLeo | Hive (DPoS) | Inflation-based Proof of Brain (PoB), HIVE/HBD reward pool distribution | Fee-free 3-second block generation, censorship resistance, and a strong financial foundation through HBD's 20% interest rate6. |
Despite Lens Protocol and DSCVR providing excellent infrastructure, the protocols currently in the cryptocurrency market with the most explosively active communities and the largest movement of substantial rewards and capital are Farcaster, which has grown around the Base network, and DEGEN, a core altcoin within its ecosystem23.
Farcaster is a decentralized social protocol designed by combining Ethereum smart contracts with an off-chain Hubs architecture25. To overcome the inherent problems of blockchain, such as data storage costs and processing speed limitations, Farcaster adopts a structure where only users' on-chain identities (FIDs) and key registries are recorded on the Ethereum mainnet, while the vast amount of social data actually generated (posts, likes, recasts, etc.) is verified and synchronized on Hubs, an off-chain P2P network25. This dual-system architecture achieves Web2-level fast response speeds while maintaining complete decentralization. Warpcast, Farcaster's official client (app), achieved a valuation of $1 billion (Unicorn) by attracting an astronomical investment of $150 million (approximately 200 billion KRW) from top-tier venture capital firms such as Andreessen Horowitz (a16z) and Paradigm.12 In early 2024, when the 'Frames' feature—which allows users to run mini-applications directly within their feeds—was launched, the Daily Active Users (DAU) exploded by over 400% in just 14 days, rising from 2,200 to over 61,500.23 Although there are critical views regarding true decentralization because the Warpcast client holds the absolute majority of the total network share, it is undeniable that the powerful dominance of a single client played a decisive role in the explosive expansion of the early ecosystem.26
The DEGEN Token was launched in January 2024 as a community-driven meme coin intended to reward participants of the '/degen' channel within Farcaster.24 It began as a purely decentralized community asset, with 15% of the initial supply air-dropped for free to active users.30 However, DEGEN did not remain merely a speculative asset; it secured explosive utility by combining with a unique 'Tipping mechanism' that facilitates interaction between content creators and users within the Farcaster platform.23
As this utility was proven, it attracted 490.5 ETH (approximately $1.47 million) in seed funding from sources including 1confirmation within a few months of its launch. Its market capitalization once surpassed $700 million, establishing it as a core asset leading the Base ecosystem.24 Furthermore, by utilizing Syndicate infrastructure and Arbitrum Orbit technology, 'Degen Chain' was launched, a Layer 3 (L3) blockchain that uses the DEGEN token itself as a gas fee.24 Various DeFi protocols, such as the decentralized exchange DegenSwap and Launchpad DegenPad, are built on top of Degen Chain to facilitate a virtuous cycle of community capital.28 By allocating 70% of the total supply of approximately 37 billion DEGEN tokens to community airdrops and rewards, the DEGEN token has established an economic model that prioritizes the growth of the community over the interests of a centralized team.28
The reason DEGEN tokens and Farcaster were able to generate such explosive user engagement and economic value lies in a sophisticated behavioral economics and technical design that overcomes the limitations experienced by traditional blockchain social platforms (e.g., early Steemit, Hive).
Most existing decentralized social networks (DOSNs) have used a single token issued directly by the platform (Single-Tokenomics) as a reward medium. While this system is advantageous for initial bootstrapping, it entails serious risks over time, such as collusion among early miners or large capitalists (whales), excessive reliance on inflation, and the potential collapse of the entire ecosystem in the event of a single token's price crash.
In contrast, Farcaster implemented the world's first 'pluralistic incentive ecosystem' that does not issue or enforce specific official reward tokens on the platform itself.34 Farcaster's architecture allows individual users or third-party developers to freely issue their own tokens and design reward systems according to their own standards.34 Thanks to this openness, community-driven third-party tokens such as DEGEN have emerged organically without central intervention and have come to serve as the platform's base currency.
According to empirical data analysis, this pluralistic P2P (Peer-to-Peer) tipping model within Farcaster has had a powerful effect in breaking down boundaries between communities. 51% to 75% of all tips occurred between different communities, and notably, the frequency of tip exchanges between asymmetric users who do not follow each other was found to be 1.3 to 2 times higher than on existing platforms.34 This is analyzed as a key factor that significantly mitigates the 'Echo Chamber' phenomenon—a chronic ailment of blockchain social networks—and enhances the quality of interaction through direct and organic value exchange between users, rather than through uniform algorithms set by the platform34.
The most innovative mechanism that has made the DEGEN ecosystem addictively engage users in the platform is the 'Virtual Tip Allowance' system29. Traditional crypto tipping required senders to consume actual assets in their wallets, resulting in significant psychological resistance to financial loss. However, DEGEN grants users a daily 'virtual limit to give to others' in proportion to their activity and deposit amounts29.
This quota does not deduct from the sender's wallet balance and accumulates into the recipient's claimable balance only when specified in a comment on another person's post (e.g., 420 $DEGEN).29 The most important point is that if this quota is not used up by midnight of the day, it does not carry over to the next day but expires permanently (Use-it-or-lose-it).29 This behavioral economics design served as a powerful incentive for users to access the platform daily to browse quality content and give tips. As a result, the activity of using up tip quotas formed a mutually beneficial feedback loop, dramatically increasing the platform's daily retention and content production frequency.29 Thousands of users exchange DEGEN tips every day, and this culture, combined with the unique cheerfulness of memes, became a sustainable driving force for the ecosystem.29
Another key factor driving Farcaster's technological leap is the introduction of the 'Frames' architecture, which allows users to interact directly within social feeds.23 In the existing Web3 environment, there was significant user friction where users had to leave the social media platform, navigate to a separate dApp website, and reconnect their wallets to mint NFTs or perform DeFi swaps.
However, Farcaster Frames enable users to securely complete complex on-chain interactions using EdDSA cryptographic keys on the backend simply by clicking a button created within a post.25 Frames are directly linked to the user's Farcaster ID (FID), fundamentally blocking the risk of wallet drain while allowing crypto transactions to be performed while maintaining the social context intact.25 This is a perfect example of the fusion of social activity and decentralized finance (SocialFi), attracting a large influx of not only speculative meme coin traders but also new developers and users seeking innovative on-chain experiences into the Farcaster ecosystem23.
A key success factor for Farcaster is its bold elimination of the complex wallet creation process, which is the biggest barrier to Web3 popularization. Users can complete onboarding in just 4 minutes using only their mobile device's payment system (Apple/Google Pay) and email or phone number verification, without the need to back up a seed phrase13. Additionally, an annual subscription fee of $5 was imposed to prevent bots or abusive multi-account (Sybil Attack)13. While this could act as a barrier to entry, it ultimately played a decisive role in building a network of high-quality, active, genuine users free from bots39.
In addition, Farcaster supports the flexible connection of external wallets across various blockchains, such as the Ethereum Mainnet, Base, and Solana, to a single user social account through 'Modular Wallet Binding'13. This allows users to easily link their assets and proof of on-chain activity to their Farcaster profiles in a cross-chain environment, enabling seamless participation in various reward programs (such as airdrops).
To secure the highest level of DEGEN rewards within the Farcaster community as a general user or content creator, one must deeply understand the platform's tokenomics and algorithmic characteristics and act strategically.
In the initial airdrop season, tip allocations were granted based solely on activity levels (writing posts, liking, etc.). However, to enhance the sustainability of the system and prevent abuse (Farming), a 'Staking' model has been introduced starting from the most recent season29. To be granted a daily tip quota that users can give to others, they must mandatorily lock up at least 10,000 DEGEN in the 'Degen Vault' smart contract for a minimum of three months (90 days).29
The size of one's daily tip quota is dynamically determined based on the proportion of the tokens one has deposited within the total staking pool.29 Therefore, to maximize Tipping Power, one must demonstrate long-term trust in the ecosystem by depositing a substantial amount of capital into the Vault. However, caution is required regarding liquidity management. This is because if even a single additional DEGEN is deposited while already staking, the 90-day lock-up period for the entire deposit is reset from that point onward.29 This staking model functions as a core economic mechanism that prevents surplus assets from being left idle in users' wallets and drives the increase in DEGEN's value by dramatically reducing the circulating supply of tokens within the ecosystem.
The daily tip quota (up to 10,000 DEGEN) granted through Vault staking is a virtual point that does not deduct from your actual wallet assets, so it is strategically advantageous to use it 100% unconditionally before it expires at midnight on the same day29. To send a tip, simply enter it in the format $DEGEN (e.g., 420 $DEGEN) in the comments of a valuable post from the other party29.
If you actively perform altruistic tipping every day, your Social Capital and reputation within the community accumulate. This forms a network of reciprocal tipping where tips are exchanged for each other's high-quality content, and as a result, the probability and frequency of you receiving tips from others increase exponentially. Since only tips received from others become real assets that can be claimed into one's wallet after the season ends, the altruistic game theory holds true, where actively giving yields the greatest return.29
You can strategically utilize the built-in 'Raindrops' feature to explosively increase user engagement with your posts.29 If a user includes the command rain \<amount\> $degen in the body of a post, it has the effect of pledging to the system that they will share the specified amount of DEGEN with other users who leave meaningful comments on that post.
The important point is that this amount is not distributed indiscriminately, but is distributed evenly only to high-quality commenters who read the post and clicked 'Like'.29 This allows you to block meaningless spam comments or macro bots while encouraging in-depth and beneficial thread discussions. Posts with active discussions appear in more feeds via Farcaster's exposure algorithm, creating a synergy that ultimately attracts a massive volume of voluntary tips from more external users.
The tier that generates the most immense wealth within the ecosystem is not simply content
To apply the success mechanisms of the Farcaster ecosystem to HIVE and InLeo, it is necessary to objectively compare and analyze the fundamental differences in the philosophies and technological structures of the two ecosystems.
| Comparative Analysis Items | HIVE and InLeo | Farcaster and DEGEN | Strategic Implications and Evaluation |
| :---- | :---- | :---- | :---- |
| Key Reward Structure | Rewards based on protocol inflation, distribution of voting pools for whales based on Proof of Brain (PoB) | Virtual quota-based P2P direct tipping mechanism (Use-it-or-lose-it) | While PoB is a structure (oligarchy) where power is concentrated in the hands of a few in proportion to capital (Hive Power), the DEGEN model promotes wealth distribution by manipulating active networking and rapid currency circulation. |
| Tokenomics Philosophy | Centered on a platform-fixed (single) system, with HIVE and HBD forming the backbone of the economy | Pluralistic system, allowing all third-party tokens and L3 chain economies within the platform | Farcaster has demonstrated the effect of mitigating the eco-chamber and accelerating the pace of innovation by inducing the voluntary activation of various third-party economies within the ecosystem34. |
| Content Interaction | Text/image-centric; token swaps or DeFi require movement to separate apps (LeoDex, etc.) | Direct support for dynamic on-chain interactions via 'Frames' within the feed | The introduction of technology (Smart Post) that embeds Web3 behaviors (swap, minting, etc.) into InLeo Threads is urgent for improving user experience. |
| Onboarding and Account Management | Direct management of cryptographic keys is mandatory; microresources (RC) or invitation fees are required upon account creation | Mobile/Web2 payment-based onboarding, integration with external Ethereum wallets (modular binding support) | While HIVE's security layer is excellent, it acts as the biggest barrier to entry for mass adoption. An interface that allows external wallet users to operate without complexity is urgently needed. |
| Anti-spam Mechanism | Utilization of staked stake and user reputation systems | Evaluation of integrated on-chain data, paid sign-up fee ($5), Vault deposit for reward rights ($10k) | The DEGEN approach, which significantly lowers initial sign-up barriers while imposing strong lock-up conditions on reward rights (Tipping), is much more effective for blocking bots. |
Based on the in-depth data and success story analysis above, we present five key strategic directions that the HIVE blockchain and InLeo platform must pursue to leap beyond their current maturity stage and become a major global Web3 social network.
Whive's 자랑하는 Proof of Brain (PoB) mechanism was a brilliant innovation that broke the exploitative structures of past centralized platforms; however, it is currently facing a structural limitation (Oligarchy) where the authority to distribute rewards is concentrated among a tiny minority of whales holding large amounts of Hive Power (HP)5. This structural inequality deprives new creators of opportunities and is prone to causing a decline in content quality by forming meaningless mutual voting cartels among a small vested interest group. Research has also pointed out that algorithm-based single-token rewards (such as the Steemit case) cause a free-rider problem where, while they may increase the quantity of content, they fail to guarantee quality improvement or actually undermine it34.
** Therefore, to complement the PoB of the Hive base layer, InLeo must independently introduce a 'Daily LEO Tipping Allowance' system at the secondary layer, benchmarking Farcaster's DEGEN quota method.
Simple text and image-centric microblogging alone cannot meet the high expectations of modern Web3 users who desire immediate revenue generation and dynamic interaction. As demonstrated by Lens Protocol's V3 Open Actions and Farcaster's Frames, building an in-feed interface that allows users to complete on-chain interactions without leaving the feed is not an option, but a necessity14.
Strategic Action Plan: The InLeo development team must unveil an architecture tentatively named 'Smart Threads,' a standard for mini-apps that third-party developers can embed directly into InLeo feeds, by fully leveraging the Hive blockchain's overwhelming block generation speed of less than 3 seconds and the benefits of being fee-free7.
Application Scenario: For example, when a user of Splinterlands, the largest game in the Hive ecosystem, posts a review of a rare card NFT on InLeo, the card metadata and payment contract are embedded into the thread9. Then, other users scrolling through the feed can instantly purchase or rent the card with HBD or LEO by pressing a single button within the post, without needing to navigate to an exchange or game site. This means that the social feed itself functions as a powerful e-commerce and DeFi marketplace.
The greatest, yet underrated, weapon of the Hive ecosystem is the algorithmic stablecoin HBD (Hive Backed Dollar), which consistently offers an exceptional risk-free savings interest rate of 20% per year8. Nevertheless, due to the inherent isolation and entry barriers of the Hive blockchain, this attractive financial value has not been able to spread to major capital markets such as Ethereum or Solana.
To overcome this problem, the InLeo community has already successfully launched LeoDex by utilizing the infrastructure of THORChain and Maya Protocol, implementing permissionless P2P swaps with DASH and other heterogeneous assets43. This is a groundbreaking milestone that demonstrates the potential of the Hive ecosystem.
** * Strategic Action Plan (Connectivity Over Constructs Strategy): Rather than attempting to forcibly rebuild new and complex DeFi infrastructure from the ground up within Hive, capabilities should be concentrated on the role of a 'bridge and gateway' to smoothly bring massive external capital (Ethereum, Solana, Base, etc.) into the Hive ecosystem via LeoDex46. Ideally, LeoDex's Quick Swap module should be embedded in-feed form within the previously proposed 'Smart Thread' function.
The most serious barrier to entry for Hive, which hinders the popularization of Web3, is its sign-up process, which strictly requires the storage of multiple private keys, including Active, Posting, and Owner keys.6 This stands in stark contrast to Farcaster, which attracted 60,000 users in just four minutes using only email and mobile payments.27 Inleo has recently made a significant impact by introducing a simplified 'Lite Accounts' model that hides this complex process behind the scenes through X (Twitter) and Google social logins,6 but this needs to be further developed.
Advancing Web2-Friendly Onboarding and Establishing Modular Identity
Hive's most serious barrier to entry, which hinders the popularization of Web3, is its sign-up process, which is a major factor in this. * Strategic Action Plan: Just as Farcaster adopted a method of flexible integration (Modular Wallet Binding) by linking external Ethereum wallets (EVM) to Farcaster accounts,13 InLeo must also fully implement a modular identity system that binds users' Web2 social accounts (X, Google), EVM/Solana wallets, and the underlying Hive wallet into a single integrated profile (InLeo Identity).
