Tech
Friend.tech is cryptocurrency’s latest obsession, but critics say it won’t end well
The decentralized social media app Friend.tech has exploded in popularity. Part cryptocurrency trading, part Rallywith tufts of Klout AND Empire Avenue mixed, the ex Stealcam it is now the third largest cryptocurrency protocol just ten days after launch. Long enough for May to wonder: how long will this last?
The Twitter-linked crypto app, which allows users to buy and sell shares of their friends’ social media profiles, racked up $1.42 million in commissions in just 24 hours. second at DeFi Llama. Since its launch, the total amount generated in protocol fees is quickly approaching $6 million.
This puts it in third place behind Lido, the decentralized liquid staking platform, and the Ethereum blockchain, the second largest crypto project after Bitcoin.
Built on the Ethereum layer-2 foundation incubated by Coinbase, Friend.tech has attracted so many users that it is struggling with excessive traffic. How could something that seemingly came out of nowhere, other than the announcement of his pivot to a social token platform for creators in May: Are you doing so well?
The mobile-only platform connects to Twitter accounts and tokenizes them. Users who purchase “keys” for another account gain exclusive access to that user’s private chat room and apparently the value of that user’s token, regardless of whether it increases or decreases.
People seem to like the idea. Second According to Dune analytics, the app recorded a total volume of 36,260 Ethereum, or approximately $60.6 million, across 1.4 million transactions.
The speed at which people have signed up to the app shows that there is a demand for a “social token” platform. Friend.tech said 100 million points will be distributed over the next six months and airdrops will occur every Friday.
High-profile users include crypto influencers and even celebrities like NBA star Grayson Allen, eager to rack up points.
But some are publicly skeptical, arguing that the protocol works like a Ponzi scheme and will collapse sooner or later.
The accusation is that when the hype cycle wears off, people might rush to sell stocks and, in turn, cause a mass panic. The pace at which stock prices have soared could also accelerate their decline when the sell-off begins.
“How come Friend.tech isn’t a clear as day Ponzi?” the market analyst asked @ChartGuys. “You buy and if more people buy that group increases: the only way to appreciate it is for more people to arrive, with the inevitability of a load of bag carriers.”
Meanwhile, NFT personality cap She said on Twitter that he’s seen it before and that it “ends in mass carnage.”
“Every couple of years in the cryptocurrency world someone reintroduces an elaborate Ponzi with a bond curve,” he said. “And there’s always some group of influencers who are excited that it’s ‘the new paradigm.’”
Meanwhile, trader Alex Wice She said in a long post that would likely fail because there is no real incentive for users to stick around, unlike other social platforms like OnlyFans, which has a subscriber base that provides recurring revenue.
He said Friend.tech has “a thin veneer of supposed value” and people would soon sell their shares and cash out.
And Bitcoin commentator Yazan pointed out how easy it was for him to make money by “literally doing nothing for less than 10 people” and said it was a “pump and dump.”
Friend.tech did not immediately respond Decipherrequest for comment.
Editor’s Note: An earlier version of this article reported that Friend.tech has generated $3 billion in fees since its launch. It had generated $3 million in commissions. We are sorry for the mistake.