The End of Engagement Farming? How Bluesky is Changing the Rules of the Game

Abstract

The early 2020s marked a pivotal moment in the evolution of social media, characterized by the fracturing of centralized platforms and a renewed interest in decentralized protocols. This research report examines the rise of Bluesky as a primary competitor to X (formerly Twitter), distinguishing it not merely as a product alternative but as a structural paradigm shift. By analyzing the underlying Authenticated Transfer (AT) Protocol, this report elucidates how Bluesky decouples identity, data, and curation, thereby introducing "algorithmic choice" as a core utility. Drawing on technical specifications and recent sociological studies by researchers such as Dorian Quelle and Alexandre Bovet, we explore how this architecture mitigates the engagement-farming incentives of traditional platforms, fosters tight-knit community topologies, and offers a sustainable "public benefit" business model. The findings suggest that Bluesky’s significance lies in its "big world" federation strategy, which prioritizes user agency and portability over platform lock-in.

1. Introduction: The Centralized Crisis and the Protocol Solution

For over a decade, the social web has been defined by the "walled garden" model, where a single entity controls the database, the user identity, and the curation algorithms. This centralization created massive network effects but introduced systemic fragilities. The acquisition of Twitter by Elon Musk in 2022, and its subsequent rebranding to X, exposed these vulnerabilities, creating a "validity crisis" for the platform's role as a global public square.¹ Users faced volatile moderation policies, the removal of verification safeguards, and a shift in algorithmic prioritization toward paid accounts, alienating the journalistic and academic communities that had formed the platform's intellectual core.³

Enter Bluesky. Originally incubated within Twitter in 2019 under Jack Dorsey, Bluesky was spun out as an independent Public Benefit Corporation (PBC) in 2021.⁴ Its mission was not to build a better Twitter clone, but to develop the "AT Protocol"—a decentralized standard for public conversation. Unlike its federated predecessor Mastodon (based on ActivityPub), which relies on a model similar to email servers, Bluesky’s AT Protocol is designed for global scale and portability, allowing users to own their digital presence independent of any server admin.⁵

This report argues that Bluesky represents a transition from "platforms" to "protocols." By analyzing its technical architecture—specifically Merkle Search Trees and Decentralized Identifiers—and its implementation of algorithmic marketplaces, we demonstrate how Bluesky creates a structural resistance to the "enshittification" cycles that plague ad-supported networks.

2. Institutional Origins and the Public Benefit Pivot Through Bluesky

The genesis of Bluesky lies in a 2019 strategic realization by Twitter leadership that centralized policing of global conversation was becoming operationally impossible. Jack Dorsey commissioned a small team, led by decentralized web researcher Jay Graber, to develop a standard that Twitter could eventually adopt as a client.⁴ This initiative was named "Bluesky," evoking the open potential of a fresh start.

Crucially, Bluesky was established as a separate legal entity before Musk’s acquisition of Twitter. In late 2021, it incorporated as a Public Benefit Corporation (PBC).⁶ This distinction is vital: unlike a standard C-Corp obligated solely to maximize shareholder value, a PBC has a fiduciary duty to a specific public benefit—in this case, the development of open and decentralized technologies.⁷

When Twitter (now X) severed ties and funding in late 2022, Bluesky was forced to accelerate its independence. It transitioned from a pure research group to a consumer software company, launching a private beta in February 2023.⁶ This serendipitous decoupling saved the project; had it remained a division of Twitter, it likely would have been dissolved. Instead, it became a lifeboat for users fleeing the instability of X, growing from a few thousand beta testers to over 27 million users by early 2025.²

3. The AT Protocol: Re-architecting the Social Graph

The foundation of Bluesky is the Authenticated Transfer (AT) Protocol. While it shares the goal of decentralization with ActivityPub (the protocol powering Mastodon), its architectural philosophy is distinct. ActivityPub functions like a web of distinct neighborhoods (servers) passing messages to each other; the AT Protocol functions more like the web itself—a single global space where data is self-authenticating and portable.⁵

3.1 The "Big World" Design and Portability

The AT Protocol is designed for "big world" scaling. In traditional federation, if a user on Server A follows a user on Server B, the servers must constantly "push" updates to each other. At scale, this creates massive overhead (the "fan-out" problem). The AT Protocol solves this by separating the roles of Personal Data Servers (PDS), which host data, from Relays, which aggregate it, and AppViews, which display it.⁹

This separation is enabled by Self-Authenticating Data. In the AT Protocol, user data (posts, likes, follows) is stored in a Repository structured as a Merkle Search Tree (MST).¹¹

• Merkle Search Trees: Instead of a standard database row, every record is hashed, and these hashes are organized into a tree structure. The root of this tree is signed by the user's cryptographic private key.

• Implication: When a user moves their account from one PDS to another, they simply move this signed tree. The new host cannot tamper with the history because they lack the user's private key to generate a valid signature for the modified tree. This guarantees data integrity and portability without relying on the host's benevolence.¹³

3.2 Decentralized Identifiers (DIDs)

Identity is handled via Decentralized Identifiers (DIDs). Unlike X (where your identity is a database entry owned by the company) or Mastodon (where your identity is tied to a server, e.g., @user@server.social), a DID is a permanent, unique identifier that resolves to the user's current location.¹⁰

Bluesky supports did:plc (a high-availability directory) and did:web (domain-based identity). The latter allows users to use a website they own as their handle (e.g., @nytimes.com or @whitehouse.gov). This effectively effectively outsources verification to the Domain Name System (DNS), eliminating the need for a centralized "blue check" authority.¹⁴

Table 1: Comparative Architecture of Social Protocols

Feature	Centralized (X/Twitter)	Federated (ActivityPub/Mastodon)	AT Protocol (Bluesky)
Data Ownership	Platform owns data.	Server admin owns data.	User owns data (Signed MST).
Identity	Proprietary Handle.	Server-tied (user@instance).	Portable DID (did:plc/did:web).
Curation	Opaque, engagement-driven.	Chronological / Server-local.	Algorithmic Choice (Marketplace).
Verification	Paid Subscription.	Admin vetting.	DNS-based (Domain handles).
Moderation	Centralized Enforcement.	Server-level ("Fiefdoms").	Composable (Layered/Stackable).

4. Algorithmic Choice: The End of the "Black Box"

The most significant user-facing innovation of Bluesky is the implementation of Algorithmic Choice. On platforms like X and Instagram, "The Algorithm" is a singular, proprietary mechanism optimized for retention and ad revenue. Users have no visibility into why they see certain content, nor can they alter the core logic.¹⁶

4.1 The Feed Generator Architecture

Bluesky decouples the hosting of content from the curation of content. It achieves this through Feed Generators—third-party services that index the network and produce custom feeds.¹⁷

The technical workflow relies on a "Skeleton" and "Hydration" model:

1. Request: A user selects a feed (e.g., "Science Sky"). Their client queries the Feed Generator via the API endpoint app.bsky.feed.getFeedSkeleton.¹⁹

2. Skeleton Response: The Generator returns a lightweight JSON list of Post URIs (unique resource identifiers). It does not return the text or images, saving bandwidth.²⁰

3. Hydration: The user's client takes this list and fetches the actual content from the AppView to display it.¹⁸

This architecture allows developers to build feeds using any logic—from simple regex filters (e.g., "only posts with cat photos") to complex machine learning models—without incurring the cost of hosting the media files.

4.2 Sociological Impact: From Broadcasting to Clustering

This "marketplace of algorithms" fundamentally alters the sociology of the platform. Recent research by Dorian Quelle and Alexandre Bovet titled "Network Topology and Community Structure of the Decentralized Social Network Bluesky" highlights this shift. Their study found that Bluesky's network topology encourages "tight-knit, topic-specific communities" with high clustering coefficients.²¹

While X remains a "center stage" for broad, conflict-heavy broadcast, Bluesky functions as a federation of overlapping communities. Users can "opt-in" to their desired context. For instance, the Starter Pack feature, introduced in mid-2024, allows users to curate lists of accounts and feeds for new users.²³ A new user might scan a QR code from a climate scientist and instantly follow 50 expert accounts and subscribe to a "Climate News" feed. This creates a "warm start" to the social graph, bypassing the algorithmic engagement bait that typically greets new users on centralized platforms.²⁴

5. Composable Moderation and the "Ozone" Layer

If algorithms are the accelerator of social media, moderation is the brake. Bluesky introduces Composable Moderation, unbundling trust and safety into stackable layers.

The base layer is the Infrastructure, where illegal content (CSAM, malware) is removed universally by PDSs and Relays.²⁵ Above this sits the Labeling layer. A "Labeler" is a service that emits metadata tags about content (e.g., "spam," "nsfw," "rude").

Through the open-source tool Ozone, communities can run their own moderation services.²⁶ For example, a "Spider Shield" labeler could be created to tag arachnid imagery. A user with phobias can subscribe to this labeler, causing such images to be blurred in their feed.²⁷ This allows for a pluralistic moderation environment where users can subscribe to strict safety filters or permissive ones, without imposing a single cultural standard on the entire globe.²⁵

6. Business Model: Sustainability Without Surveillance

The history of social media suggests a grim inevitability: platforms eventually exploit user data to survive. Bluesky attempts to break this cycle through a Services-Led Business Model that treats the user as the customer rather than the product.

Bluesky has explicitly rejected the advertising model.⁷ Instead, it generates revenue through:

1. Domain Names: Integrated directly into the onboarding, users can purchase custom domains (via partners like Namecheap) to use as their handle. This serves a dual purpose of revenue and identity verification.²⁸

2. Paid Subscriptions (Planned for 2025): The roadmap includes premium features such as higher-quality video uploads and profile customizations (colors, avatar frames).²⁹ Crucially, Bluesky has stated that paying subscribers will not receive algorithmic boosting. This prevents the "pay-to-win" discourse environment seen on X Premium.²⁸

This model aligns the company’s incentives with user utility. To increase revenue, Bluesky must build better tools that users are willing to pay for, rather than increasing "time on site" to sell more ad impressions.

7. Conclusion: The Future of the Open Social Web

Bluesky represents a maturation of the decentralized web. By solving the usability hurdles that plagued earlier protocols and offering a seamless migration path via features like Starter Packs and custom domains, it has established itself as a viable competitor to X. The upcoming integration of OAuth and Bridgy Fed (a bridge connecting Bluesky to the ActivityPub/Mastodon ecosystem) signals a future where the social graph is truly interoperable.³⁰

The shift from "The Algorithm" to "Algorithmic Choice" is not merely a technical feature; it is a restoration of agency. As the research of Quelle and Bovet suggests, this architecture fosters a social graph defined by community cohesion rather than polarized engagement. While challenges remain in achieving mass-market adoption, Bluesky’s existence proves that social media need not be a black box. It can be a transparent, user-controlled protocol—a blue sky where the clouds are of our own choosing.

References & Technical Specifications

Core Lexicon Definitions:

• Post: app.bsky.feed.post - The schema defining the structure of a text post, timestamps, and embed references (images, external links).³²

• Feed Skeleton: app.bsky.feed.getFeedSkeleton - The API endpoint used by custom algorithms to return a list of post URIs to the client for hydration.¹⁹

• Preferences: app.bsky.actor.putPreferences - The method used to save user settings, such as pinned feeds (savedFeedsPref) and muted words, ensuring these settings persist across devices.³³

• Labeler Service: app.bsky.labeler.service - The record type that designates an account as a moderation service, enabling it to publish labels like "spam" or "misleading" that other users can subscribe to.³⁵

Key Research Study:

• Title: "Network Topology and Community Structure of the Decentralized Social Network Bluesky"

• Authors: Dorian Quelle and Alexandre Bovet.

• Key Findings: The study characterizes Bluesky as having a high modularity in its network structure, facilitating "tight-knit" topic-specific communities. This contrasts with the centralized "broadcast" nature of X, suggesting that Bluesky's architecture naturally dampens global polarization in favor of community-level alignment.²¹

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