Friend.tech: The Explosive Rise of a Decentralized Social Media App Shaking the Crypto World
Friend.tech, a newly launched decentralized social media (DeSo) app, has emerged as a focal point of both excitement and skepticism. Since its beta version launch on August 11, the app has witnessed a surge in popularity, garnering over 64,000 new users and facilitating more than 24,000 ETH in trading volume. While hailed by some as a revolutionary leap towards decentralized social networking, the app has sparked debates about its sustainability and potential pitfalls.
Friend.tech is built on Coinbase’s layer-2 network Base, introducing a unique concept to the world of social media. The platform allows users to purchase shares of their friends and influencers, which grants them exclusive access to private chats with those users. This innovative approach has attracted attention not only from crypto enthusiasts but also from prominent figures outside the crypto space, such as gaming YouTuber Faze Banks and the Russian protest group Pussy Riot. These non-traditional sign-ups have added to the platform’s allure and fuelled its initial growth.
Let me tell you one thing.
Something isn’t right about @friendtech.
🚩 Creators making money from a group chat that doesn’t even work when you can’t even reply directly to people?
🚩 The way pricing works is ridiculous and can be easily taken advantage of.
🚩 Pumps and dumps. pic.twitter.com/TJqcktEM6P
— Yazan (@YazanXBT) August 20, 2023
However, amidst the accolades, voices of caution have emerged. Crypto commentator Yazan, in an interview with Cointelegraph, expressed concerns about the sustainability of Friend.tech’s growth trajectory. He pointed to several troubling factors that might precipitate a burnout within the app. Central among these concerns was the rapid rise in share prices, which Yazan argued was unsustainable. He criticized the market making mechanisms that appeared to benefit the platform and creators disproportionately, leading to a rapid inflation of share prices.
“How come there’s 100 holders and the price is 1 ETH — 1 ETH to be able to see a private chat?” Yazan questioned, highlighting the disparity between share prices and the actual value being offered.
Adding to the chorus of skepticism was pseudonymous software engineer Cygaar, who posted on an August 20 thread about Friend.tech’s pricing mechanism. Cygaar pointed out that share prices were directly proportional to the square of the outstanding supply. This exponential increase in price as the supply grows drew parallels to the fate of BitClout, a similar DeSo app from 2021. Web3 marketer Legendary, using his pseudonym, voiced pessimism about Friend.tech’s longevity, suggesting a potential collapse akin to BitClout’s fate.
“Absolutely not. I think the platform will collapse as BitClout did. We are in a bear market, and there’s nothing to do. Everyone jumps on an opportunity to make money, but I think the platform will be done within the next weeks to months,” Legendary predicted.
Despite these concerns, Friend.tech has showcased impressive financial figures. Data from DefiLlama reveals that the app has generated $1.42 million in fees in the past 24 hours, amassing $4.2 million since its public launch. The project’s total revenue stands at $1.88 million, backed by a staggering 724,000 transactions from over 64,500 unique traders.
The trajectory of Friend.tech remains a subject of intense speculation. As it continues to attract attention from the crypto community and beyond, the coming weeks and months will serve as a litmus test for its viability in the fast-paced world of decentralized social media. The balance between innovation, sustainability, and user engagement will be key factors in determining the ultimate fate of this burgeoning platform.
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