Recently raised $7 million in funding, what is the magic of Phaver, the largest mobile social app on Lens?

Author: Zen, PANews

In recent months, the primary market of the cryptocurrency industry has become increasingly quiet. Research firm PitchBook's data shows that global venture capital investment in cryptocurrency startups fell to its lowest level since 2020 in the third quarter, down 63% compared to the same period last year. Amidst the scattered fundraising news, we occasionally see projects in the vertical field of Web3 social receiving significant investments from crypto VCs, even in the context of a deep bear market.

Recently, the Web3 social application Phaver announced that it has completed a $7 million seed round of financing, with investors including Polygon Ventures, Nomad Capital, Symbolic Capital, dao5, Foresight Ventures, Alphanonce, f.actor, Superhero Capital, and SwissBorg. To date, Phaver has raised over $8 million, with a valuation of approximately $80 million. This funding will be used for product development, expanding the team, and other partnerships. As the largest mobile application on the Lens Protocol, Phaver has shown stable linear growth since its official launch and currently has about 250,000 users.

Opening the Crypto Traffic Gateway with Web 2.5

Social media has always been a battleground for internet technology companies. With years of development of Web2 social platforms, the user services of these applications have become increasingly mature and refined, and user experience continues to be optimized and upgraded. According to a report released by consulting firm Kepios in mid-year, there are now nearly 5 billion people (4.88 billion) active on social networks globally, a year-on-year increase of 3.7%, accounting for 60.6% of the world's population. However, regardless of how Web2 social media updates and innovates, issues such as user information and data leaks, as well as platforms selling data without consent, continue to make headlines year after year, while the contributions of massive users to the platform's influence are often overlooked and forgotten.

These issues are difficult to resolve in the Web2 context, but with the development of decentralized social protocols based on blockchain technology, the new paradigm of Web3 social offers a solution.

At its inception, Phaver followed the path of a Web2 social platform, with its name inspired by the word "Favorite." The early application aimed to allow users to share their favorite things, such as restaurants, shoes, and more. However, the team behind Phaver quickly realized that Web2 is not the trend of the future, and allowing people to truly own their social graphs would create a greater paradigm shift. Nevertheless, Web3 social is still in a very early stage, and the experience of accessing on-chain content still has a significant gap compared to the needs of ordinary mainstream users. Therefore, with experience in Web2 social software, Phaver defines itself as a gateway to Web3, attempting to bridge this gap and establish a Web2.5 application between the two.

The internet giants of Web2 often operate independently, and an ordinary user must start from scratch to create content and accumulate experience when using different social products. For example, our identity on Facebook is unrelated to our personal image on Twitter, which is also vastly different from the content and digital identity on TikTok. In contrast, Phaver's philosophy is that users only need one application to access everything their friends publish across various protocols, enabling cross-Dapp and cross-ecosystem collaboration and data interoperability at the product level. Currently, Phaver has integrated its social graph with Lens Protocol and CyberConnect. This allows everyone who creates a profile on Lenster and posts on Lenster to actually have followers on Phaver, with all this content being published in real-time on Phaver.

Content Staking Screening Mechanism: Providing Users with Data Monetization Opportunities

Currently, Web3 social cannot directly compete with Web2 social in terms of user experience; to succeed, it must offer unique and innovative functionalities. Phaver's approach is to provide users with more value capture and growth incentives through an honor system, allowing users to truly feel the sovereign experience of Web3 social.

Phaver's co-founder and CEO Joonatan once stated that if he needed to introduce Phaver to someone who has never encountered Web3 in one minute, he believes the simplest answer is, "It allows you as a user to essentially control your online social life. You can fully monetize your data, and the control is now in your hands." This will primarily be achieved through Phaver's core—content staking screening mechanism. If users choose to like and stake high-quality content that is well-received, they will also be rewarded for helping to discover and spread quality content.

On the well-known video barrage website bilibili, users typically express their love and support for content creators through likes and "coins." In the early days, viewers who discovered quality video content often sent "火钳刘明" (a popular internet phrase that sounds like "leave a name before the fire," originating from Baidu Tieba) to express their pride in discovering quality works. Phaver offers users a new way of liking + staking, where "staking" can be seen as a new mode of "tipping." By staking valuable content, users can not only encourage creators but also earn rewards when this quality content becomes popular later on, specifically by earning Phaver points.

Just like bilibili distributes a coin for free to active users above level 1 daily, Phaver allocates at least 5 free stakes to users of level 2 and above after daily login. If the posts that users choose to stake early become popular content of the day, they will receive rewards. This gamified content discovery helps provide higher quality input for Phaver's upcoming feed algorithm. According to official information, staking on posts is currently free, but in the future, a small amount of Phaver utility tokens may be required for users to "participate."

Phaver's Token Economics

Currently, Phaver points can be earned within the application, and in the future, services will be launched for in-app purchases. The main ways to earn points in the Phaver application include user invitations, the aforementioned content staking rewards, and content creation rewards. Within Phaver, users cannot directly earn tokens, but for users of level 2 and above, Phaver points can be exchanged for tokens at a certain exchange rate (the exchange rate between points and tokens is not necessarily 1:1, as it depends on various factors and is dynamically modeled to maximize the value for current and future users of the platform).

According to official information, the number of tokens held in the wallets of Phaver token holders will directly affect their credit score, Phaver Cred, which in turn affects the user's level. The more tokens exchanged and accumulated each month, the higher the level. Cred points can also be obtained by connecting NFTs, and currently, Phaver has connected over 100,000 NFTs. Additionally, holding Phaver tokens now and in the future will qualify users for various other benefits, such as VIP support, priority recommendations, and early access to features or whitelists. Finally, Phaver token holders also have the right to participate in governance voting, and in any future referendums or elections held in the application or DAO organization, their share will determine the corresponding weight of their vote.

The total supply of Phaver tokens is currently capped at 10 billion, but there are plans to use revenue generated from native tokens or other liquid tokens/fiat currencies to initiate a token burn plan each quarter.

The largest share (28%) of the tokens is allocated for user rewards, which will be distributed over several years and may also be supplemented by other liquid tokens from advertising and other revenue streams (subscriptions, native utility NFTs, etc.).

The second largest share (27.7%) is for the ecosystem treasury, which can be used for the development and improvement of the application and partially allocated to users or burned.

The third largest share is for team allocation (18%), which includes a 1-year cliff and vests over the next 4 years to ensure the team has sufficient motivation to build a long-term sustainable token ecosystem.

In addition to the 28% user rewards pool, 3% is reserved for rewarding early users who joined before the token issuance. The distribution of this pool is primarily based on levels and points but may also grant special allocations to particularly helpful users.

Phaver's cumulative downloads have currently exceeded 250,000, and the project team continues to strengthen its brand and IP collaborations, including but not limited to well-known crypto brands like Mocaverse, YogaPetz, and Otherdeed. However, after browsing the information content within the application, it is not difficult to find that it is still primarily focused on news and project dynamics within the crypto industry, with the gathered users mostly being crypto natives. According to the project's roadmap, Phaver's next steps, in addition to optimizing functional services and supporting more digital assets, also include plans to provide localized special versions of the application for users in China, Japan, South Korea, and Turkey.

As a bridge connecting Web2 and Web3, Phaver has gained significant attention within a small number of Web3 communities. However, to attract traditional users on the other end and truly "open the door" for the Web3 industry, there is undoubtedly a long way to go.