ArkStream Capital Overview of Lens Protocol’s Trends, How to Break Through and Compete with FT and Telegram Ecosystem?

ArkStream Capital's Lens Protocol Trends, Breakthroughs, and Competition with FT and Telegram Ecosystem

Original author: Larissa

After the Ethereum Community Conference (ETHCC), Lens Protocol made headlines with the announcement of its latest upgrade, Lens V2. This highly anticipated release includes two revolutionary upgrades. The first upgrade is “Open Actions,” which introduces a groundbreaking feature that allows users and developers to seamlessly integrate external smart contract actions into Lens publications. The second enhancement is a major integration with ERC 6551, which allows users to bind all account activities within the Lens ecosystem using NFTs as their unique identities, completely changing the way identity management is done. Multiple wallet addresses can now be associated with a single NFT, simplifying the user experience.

Lens and its Competitors

Lens Protocol has established itself as a leading SocialFi platform on Ethereum. Compared to its competitors, Lens has shown impressive growth and user engagement. A social contract concept similar to a social graph, Fracaster, currently has 17,286 active accounts, while Lens Protocol has an astonishing 119,241 active accounts, clearly surpassing its competitors.

Although another competitor, Cyberconnect, has over 296,342 accounts, Lens Protocol has implemented access control measures, so direct comparison is not meaningful. Despite having a larger user base, Lens Protocol performs exceptionally well in terms of total transaction volume, with a total of 21,931,943 transactions, compared to Cyberconnect’s total of 16,249,274 transactions.

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The Lens Protocol ecosystem not only attracts a larger user base but also demonstrates higher levels of user activity compared to other social contract platforms, reflecting the effectiveness of Lens Protocol in creating a vibrant and thriving community within its decentralized ecosystem. However, Lens Protocol is not satisfied with the status quo and continues to upgrade to the next stage.

Ambitious Moves by Lens

1) Momoka: Lens’ L3

In April, Lens introduced MOMOKA, an innovative Optimistic L3 scaling solution aimed at off-chain processing of Polygon transactions for unparalleled scalability and reduced transaction costs. Unlike the traditional Rollup process where L2 sends transactions to L1, Momoka takes a different approach. It creates transactions and obtains signatures from wallets, but instead of directly broadcasting these transactions on the blockchain, it utilizes transaction signatures and typed data to generate Data Availability (DA) metadata, treating it as the transaction itself. This metadata transaction is then sent to a dedicated DA layer.

In addition, Momoka provides indexing support, enabling node operators to seamlessly stream and index Lens data without relying on third-party infrastructure. The launch of Momoka gives users the option to store data on Polygon and publications that do not require a powerful trustless execution layer can choose not to use EVM state. As a result, Momoka offers users the flexibility to customize their transaction approach based on their specific needs within the Lens ecosystem. The launch of Momoka potentially reduces the reliance on Polygon services to some extent, which could lead Lens to turn to Layer 1 chains and become part of a modular blockchain approach.

2) Integration with ERC 6551

ERC 6551 allows for the creation of Token Bound Accounts (TBA) for NFTs, which means that NFTs can function as wallet addresses or on-chain accounts, truly realizing the functionality of NFTs as wallets. In addition, ERC-6551 will support the creation of smart contract wallet accounts for current ERC-721 NFTs, using NFTs as on-chain identity wallets. Under this NFT account, multiple wallet addresses, held NFTs, and ERC-20 tokens can be included, making NFTs a true representation of on-chain identity accounts.

From the perspective of Lens, integrating with ERC-6551 and establishing rules for using Lens NFTs is a strategic move. Currently, Lens requires users to own Lens NFTs in order to access its services, and trading Lens NFTs would result in the loss of all associated account activities and transactions. By implementing ERC-6551, Lens simplifies the use of its NFTs and adds an element of identity, creating a sense of belonging for users.

Lens believes that the current integration with ERC-6551 not only simplifies the use of NFTs but also introduces the concept of identity, enhancing the overall user experience. This innovative approach of integrating identity into NFTs creates a deeper connection between users and the platform.

In the closed beta version of Lens, users have already created and accumulated over 3.4 million NFTs, which are not just simple profile pictures or digital assets. Now, these NFTs have the potential to generate new uses in the identity field, providing a fresh and exciting perspective that may attract interest in the market.

Star Projects of the Lens Protocol

Currently, there are over 134 verified and showcased applications thriving in the Lens ecosystem. This diverse range of successful applications has garnered great interest and support from various communities and developers, and there is high anticipation for the future of the Lens Protocol.

1) Orb

Orb is a decentralized social media platform that supports mobile and desktop. Among all applications, we believe in Orb. Orb is a decentralized social application that not only excels in UI/UX on Lens but also stands out in emphasizing community engagement. We believe that an engaging and unique community will be the most distinctive feature of Web3 social applications and will help attract Web2 users from platforms like Twitter. Orb not only focuses on attracting diverse communities from Web3 but also makes efforts in creating a unique user experience.

2) Lenster

Lenster, as an innovative and groundbreaking decentralized social media application, firmly adheres to the principles of permissionless interaction. With the strong support of the Lens Protocol, Lenster redefines the digital social field by introducing a completely new paradigm of user participation. On this innovative platform, users have the unprecedented ability to create and be rewarded for posts that resonate deeply with the wider community.

3) Phaver

Phaver is a pioneer in the decentralized social media platform field, utilizing the cutting-edge capabilities of Lens technology. As an early adopter of this revolutionary paradigm, Phaver not only redefines the way users interact with digital communities, but also introduces innovative incentive dimensions through its unique reward token system.

Limitations of the Lens Protocol

The submitter is responsible for verifying transaction data and constructing data submissions to Arweave, similar to L2 sequencers. However, it is not decentralized, as the decision-making power of the submitter belongs to the Lens official team.

Lens chose not to follow traditional L2 solutions, but instead rolled up and sent data to the DA layer. This decision is because as a large-scale application, Lens data will continue to grow and become complex, unlike financial data that only requires the final result. Sending data to the DA layer is a temporary solution handled by Arweave and is not a long-term scaling solution.

Although Lens is considered one of the most mature protocols with a thriving ecosystem and a dedicated team committed to building and improving user experience, it currently mainly attracts blockchain users. Lens struggles to attract new users. However, some non-blockchain social contracts have successfully attracted a large number of new users through low entry barriers and smooth user experiences.

In conclusion, the Lens protocol stands out in competition with its inherent technological advantages, rooted in a steadfast commitment to decentralization. While well-known social protocols like Nostr and Mastodon have accumulated a large number of users without relying on blockchain technology, the uniqueness of the Lens protocol lies in its genuine support for decentralization. The case of Nostr emphasizes the importance of decentralized architecture, eliminating the need for users to deal with complex blockchain concepts. Nostr’s elegant system, including clients and relays, provides users with an environment that facilitates easy access to private and public keys, creating conditions for scalability and the creation of diverse applications.

However, the recent wave of innovation created by visionary leaders like Vitalik and Elon on Twitter may reshape the preferences of local Web3 users and prompt them to explore alternative promising social protocols. In this ever-changing landscape, the Lens protocol faces the challenge of how to maintain its relevance and attractiveness in a competitive environment.

We look forward to witnessing Lens stand out in the competitive social track!

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