• by Colin Kirkland , Staff Writer, April 23, 2025

It's becoming easier to picture what the future of advertising will look like in decentralized social media environments.

Despite Bluesky CEO Jay Graber's insistence that her platform -- a decentralized open-source X alternative -- won’t become “enshittified” with loads of ads, it looks like one startup is bringing advertising-adjacent monetization opportunities to the platform, with funding to boot.

Some minor background: Bluesky operates like X, but instead of one algorithmic main content feed, the network allows users to follow different custom feeds and cycle between them (for example, I use one feed wholly dedicated to “Tech Journalists” and others focus on niche topics like “Moss”).

Graze -- a startup that powers the creation of the majority of these custom Bluesky feeds through easy-to-use templates and tools -- just landed $1 million in pre-seed capital and is in the process of helping feed developers monetize through advertising, ultimately becoming the first company to introduce ads to the protocol on which Bluesky and other decentralized apps run.

In Bluesky's infancy, Graber said the future of advertising on the platform “would be much more user intent-driven” than other social media apps, avoiding “turning into a model where the user's attention is the product.”

Which seems to be what Graze is attempting. Instead of collecting user data for ad-targeting, advertisers on Graze select the specific feeds in which they want their ads to appear, allowing the feed operators to choose which ads appear in their feeds, how often and at what cost to the brand.

According to TechCrunch, which recently spoke with the Graze founders, this approach to advertising provides users, developers and brands with more freedom and power to reach their goals.

“Advertisers have very little control over where their content is seen and the quality of how that is rendered to people,” Graze co-founder and CTO Devin Gaffney said. “They don't have any real relationship with the audience. And the decision as to how [the ad] gets shown to people is systematically against their favor.”

By tapping into custom feeds on Bluesky, advertisers can target specific audiences through niche topics, or a wider audience on more general/populated feeds.

Once approached by an advertiser, a feed operator -- which is effectively an everyday Bluesky user -- has the ability to control which ads run, while also giving the feed's users the choice to opt out of ads by blocking sponsored hashtags.

Blocking ads, the co-founders argue, is a good thing -- as it will prevent feeds from being overrun by ads. In other words, the “enshittification” that Graber and current users fear most.

“There is a self-regulatory aspect that is not present in other platforms that will make operators behave in a much more pro-social way,” Gaffney told TechCrunch.

Logistically, Graze takes a 30% cut of the ad dollars made on its feeds. Right now, the company is running ads at a cost of $1 per 1,000 impressions on 200 custom feeds, but Graze plans to expand ads to its 4,500 Bluesky feeds, which have been created by around 3,000 users.

The company also wants to eventually run a revenue share with Bluesky and other apps built on the AT Protocol (ATProto), including emerging notables like Flashes (the decentralized Instagram app) and Skylight, a TikTok alternative that recently received funding from Mark Cuban.

For Graze to scale, the company needs Bluesky to scale.

Right now, the X alternative has about 35 million active users, receiving intermittent user and engagement boosts often in response to political upheaval and/or X CEO Elon Musk's chaotic antics.

Bluesky is competing not only with X but with Meta's own “open-source” X alternative Threads. What sets Bluesky apart from Threads, however, is its truly decentralized model.

Threads is technically built on an open-source protocol, but it is still controlled by Meta, while Bluesky is built on a protocol that is not controlled by billionaires, and is promoting the creation of apps that allow users to easily move in and out of with the same digital identity.

In line with Graber’s vision for a scalable decentralized social media -- a whole new paradigm -- to emerge, it's important to understand that Bluesky the app is much less important than the protocol it is built on. ATProto allows anyone to publish an app to a built-in audience, putting the power back in the hands of the users and not tech moguls or politicians.

Once users understand this, companies like Graze might multiply, providing brands with a whole new paradigm as well.