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So I’ve always found it pretty funny that the primary modes of communication in web3 are all reliant on centralised services. Discord, Telegram, and Twitter all rely on you having an account with each service, voluntarily giving up your personal data to use the product.

Indeed, some people adopt a pseudonymous identity or identities to abstract away their real persona. Others avoid the hassle and dox themselves because it’s simply easier to do so. As a result, we are left in a state of fragmentation. We’re spread thin across multiple apps and it’s frankly too hard to keep up.

It’d be so much easier if we were able to communicate on-chain. Developers would be able to notify their users about updates without having to send the same canned message on 10 different platforms. NFT enthusiasts would be able to contact the holders of NFTs that they want to purchase easily without needing to know them personally. DAOs wouldn’t need to use discord or google calendar invites to host events or send out information.

For web3 to become the next paradigm of the internet, the communication problem needs to be solved.

Fortunately, many teams are working on this problem as we speak.

WalletConnect

Logically, the best place to host a web3 messaging service is within a wallet app. WalletConnect recently unveiled its Chat API and its feature set is basically everything you’d want in a messaging service.

Chat between wallets cross-chain: By far the most annoying thing about web3 is having to deal with different wallets and chains. At the moment, many solutions in the space such as XMTP (see below) and Dialect have focused on either EVM or Solana compatibility to begin, with a view to expand to other chains over time. However, with WalletConnect, they’ve already built out the cross-chain infrastructure internally and are able to offer cross-chain messaging from the start
Opt-in mechanism: Users are forced to opt-in to the chat service to be contactable. To prevent unsolicited messages and spam, users can restrict their discoverability and only share details via link/QR code.
Self-custody of data: Users own their chat history and all messages are encrypted. Whilst encrypted chat services are nothing new, being able to own your own history makes it both privacy-preserving and censorship-resistant.

Whilst these features are not yet released, it’ll be interesting to see if WalletConnect are able to gain further wallet market share, and dominate on the messaging side.

XMTP

Whilst WalletConnect is integrating messaging functionality with wallets, XMTP is approaching the problem in a similar but different way.

Imagine if you could consolidate all your app notifications in one spot. Instead of having red bubbles pop up across 10 different apps, everything was aggregated into one app making it more accessible, more efficient and less stressful to keep up with everything going on.

XMTP is building this infrastructure for web3.

Developers can integrate XMTP within their DeFi dApp to send updates and notifications direct to their users wallets. NFT marketplaces that use XMTP can enable wallet-to-wallet DMs and NFT collections can send out announcements direct to everyone in their community without needing Discord.

And the best part of it all is that XMTP messages are persistent and portable. What this means is that messages are tied directly to a wallet rather than a specific client and can be accessed through any app built with XMTP.

XMTP is working towards being a fully decentralised messaging protocol. Decentralised Nodes host the network and allow different messaging apps to interact with each other.

At the moment, XMTP is restricted to just EVM chains, however, the hope is to expand this across all chains.

Status

Status is by far one of the more built-out messaging applications in web3. The team have been building since 2016 and even ran an ICO in 2018, raising over $100M in funding. Since then the team have effectively created a WeChat clone for ETH with chat functionality, a wallet and a web3 mobile browser.

The UX is smooth. Onboarding takes under 2 minutes. And the web browser works as promised.

All of this is rare in web3 where UX can be clunky, and things break due to various functional problems.

So does this mean the messaging problem is solved?

Well, not exactly.

It seems like the Status team hasn’t gotten distribution and retention right at all. As of July 2022, the app had 11,000 DAU despite having over 80K SNT token holders and over 1M YTD app downloads on Apple and Android combined. Clearly, the token strategy hasn’t worked.

Given the composability and portability of web3, I expect most messaging apps to have smaller user bases compared to the monolithic social media giants that exist in web2. Switching costs are low in web3 when someone can just take their wallet and move to another app.

On the infrastructure side, protocols are more likely to be sticky. Networks such as XMTP can embed themselves within the ecosystem to be the ‘go-to’ messaging protocol for people to build on. Rather than the apps, the infrastructure layer will benefit from the network effects. users will likely stick to apps that are built on the same infrastructure rather than jump to something different that their friends might not be on.

Indeed, this will create a certain level of fragmentation, but it’s likely that the infrastructure layer is a winner takes all market. The biggest challenge builders in the space will face is distribution and maintaining a sticky product. It’ll be interesting to see how the market shifts and develops, and whether builders will implement incentivisation mechanisms to lock users in.

If the current web2 messaging market is anything to go by, the opportunity is large in web3. If you’re building in the space, I’d love to chat with you! Feel free to DM on Twitter, or reach out on Linkedin 🙂

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Abhi

Superfluid

Do we really need another messaging app?