Tech
Friend.tech’s hype is sky high, but will it really reach the stars?
Since Friend.tech opened its invite-only beta test 11 days ago, the decentralized social-focused app has quickly attracted many users, while also attracting the attention of major cryptocurrency influencers, NBA players and OnlyFans creators. But can it convert all the initial hype into significant, lasting traction?
The app, built on Coinbase’s layer-2 blockchain Basic, allows users to tokenize their image by selling “shares” of themselves to their followers, who then become shareholders and can send messages directly to users. The app was quickly adopted and popularized by “Crypto Twitter” personalities such as Frank DeGods AND gazy222commercial influencer RookieXBTand NBA player Grayson Allento name a few.
Since its launch, Friend.tech has seen total volume of 33,596 ether, or about $55.5 million, in 1.29 million transactions, according to Dune Analytics data by Michael Silberling, data analyst at OP Labs. (Disclosure: Silberling is a brother of Amanda Silberling, a TechCrunch reporter.)
In the last 24 hours, the platform has collected $1.42 million in fees and $709,839 in revenue, making it the third largest fee and revenue generator in the entire cryptocurrency industry over this time frame, behind only the blockchain itself. Ethereum and the Lido staking service. , according to Defillama data. The platform charges a total of 10% commissions per transaction, of which 5% goes to Friend.tech and the remaining 5% goes to the account holder.
But despite the app’s significant initial success, many people are skeptical of its viability due to the lack of a privacy policy, the requirement to deposit ether when signing up, a rule slow interface and an unclear roadmap. While the app allows those who profit from stocks to cash out, there is little clarity on the security measures in place, the liquidity structure and other aspects of its operations.
Friend.tech is also arguably a newer version of a slightly more controversial attempt at BitClout (later renamed DeSo). A crypto social network that allows people to buy and sell tokens based on people’s reputations, DeSo launched in 2021 to great fanfare. But eventually the traction faded and the app entered legal problems to preload users onto its platform without their permission.
Skeptics, driven by concerns about price manipulation and pump-and-dump schemes, believe Friend.tech’s fate will be similar to that of DeSo. “The way [Friend.tech’s] the prices are ridiculous and you can easily take advantage of it,” YazanXBT, a self-proclaimed “on-chain investigator,” tweeted.
Most of the psyop here thinks that friendstech is about token access to a private chat with an influencer, but it’s actually about betting on which account will manipulate their stock price. Not everyone is willing to cross that line. But it’s easy and profitable to do so.
— Beanie (@beaniemaxi) August 21, 2023
It makes sense for a big name influencer to use this platform. Not only does their likeness generate revenue, but it also gives them a way to monetize directly (although Friend.tech takes a cut). But each user is given a limited number of shares to sell, and the app incentivizes users to bring in more people in the hope that fans and friends will bid to buy their shares and increase their value.
If this sounds like Ponzi to you, never ask a Bitcoin maxi the cryptocurrency’s maximum limit.
Indeed, Friend.tech presents potential obstacles to mass adoption. The service requires you to deposit ether before you start using it, which is a huge obstacle for those who don’t have ether readily available (or don’t want to deposit capital immediately). It’s also probably a red flag. Imagine walking into a restaurant and having to pay before you can even see the menu. Additionally, users must use a Base Bridge to deposit Aether, which adds even more friction to the experience.
The company is also founded by a rather anonymous team, and while this is more common in the web3 space than elsewhere, it’s still not a popular decision, given that you have to pay to even access the app. The co-founders use their usernames X.com (formerly Twitter)”0xRacer” AND “shrimppepper“, according to one of their investors, a general partner of Paradigm Charlie No yes. But that’s not much to go on, since you can no longer rely on X’s verification system to find out whether someone is actually who they claim to be, verify their background, or whether they can be trusted with your money .
Time will tell if this app can transform into a web3 social network, providing a use case not only for the crypto community but also for traditional users.
As it stands, Friend.tech has a number of hurdles to overcome. However, the rapid growth is proof that there is a market for a decentralized social media platform and that this iteration – or perhaps the next – could grow the industry both internally and externally.