Social media is a cornerstone of contemporary life; it connects us and permits seamless data sharing throughout societies and industries, together with crypto. But, it’s suffering from complexities, together with knowledge breaches, opaque algorithms, censorship, prioritizing earnings over person expertise, and a scarcity of person management. Most of those points stem from its centralized mannequin of operations.
Enter FriendTech, an try to handle these points by leveraging blockchain know-how. Its daring proposition – what if customers actually owned their social capital and creators might straight monetize their affect?
On this article, we discover FriendTech’s story, its rise and fall, and new makes an attempt at getting it proper and making a comeback. We look at whether or not it has the potential to realize widespread acceptance and change into the brand new regular within the social media house.
What’s FriendTech and How Does It Work
FriendTech is a decentralized social media platform constructed on Coinbase’s Layer 2 community, Base. Its distinctive strategy lies in tokenizing social affect and enabling creators to monetize their affect straight. The platform was created by a pseudonymous duo, Racer and Shrimp, who’ve labored on related tasks within the previous.
The platform permits creators to situation tradable “Keys” representing their affect. Followers should purchase these Keys for entry to unique content material or personal chats. Creators, in the meantime, have a brand new strategy to monetize their viewers by providing their followers a extra direct and customized expertise.
FriendTech operates as a Progressive Internet App (PWA) accessible by means of a browser-enabled cellular app. Customers handle profiles and a non-custodial pockets, holding the personal keys to their “FriendTech” belongings. Every person has a set of Keys, which others in search of entry and interplay can buy. They interact with creators whose Keys they possess, both by means of chat interactions or by exploring widespread creators
As soon as a person completes their account setup and funds their wallets, a set of Keys is generated inside their account. These keys might be bought by different customers in search of entry to the account creator. It’s essential to notice that each person account on FriendTech is supplied with these Keys. Nonetheless, the worth of those account Keys is intricately linked to the account proprietor’s stage of affect and the demand for them throughout the group.
The Rise of FriendTech: Early Traction and Buzz
Inside weeks of its launch in August 2023, FriendTech noticed staggering adoption. NBA gamers, esports personalities, and Crypto influencers flocked to the platform, attracted by the potential for monetization and a brand new social media expertise.
Within the first two weeks after its launch, the platform reportedly gained greater than 100,000 customers and made about $25 million. Crypto influencers Jordan Fish (Cobie) and Hsaka Merchants reportedly earned $158,600 and $107,600 respectively, throughout the first month of its public launch. Racer, one of many platform’s co-founders, made greater than $117,300 throughout the identical interval.
The preliminary utilization statistics from the platform’s early weeks of launch go away no room for doubt – FriendTech managed to create a major buzz throughout the Crypto Twitter group. With this in thoughts, let’s delve into the explanations behind FriendTech’s on the spot reputation.
What Makes FriendTech Completely different and Why It Was Profitable at First
This meteoric development might be attributed to some key elements:
1. Tokenization enchantment:
This preliminary success highlights the platform’s capacity to faucet into the “consideration economic system” and incentivize person participation. FriendTech shouldn’t be the one social media platform constructed on a decentralized community. By tokenizing affect, the platform goals (and was ready) to incentivize the creation of significant communities and allow seamless monetization of social interactions. Creators can lastly monetize their followings with out counting on advertisements or model offers. By promoting restricted entry keys, they earn straight from their most devoted followers.
In essence, it leveraged the attract of cryptocurrency and tokenization to enchantment to these in search of monetary acquire.
2. True Possession of Social Capital
On FriendTech, every person controls their keys. When their keys change into extra precious, customers can probably earn. This technique advantages influencers and creators as a result of it permits them to personalize their interactions with their followers and monetize their content material in new methods. Moreover, followers can interact with their favorite creators by buying particular tokens for interactions; creators also can management entry ranges for key holders.
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3. Base and Twitter Integration
One other key issue contributing to FriendTech’s preliminary reputation is its affiliation with Coinbase’s Layer 2 community and the simple onboarding course of it supplied for established customers of X (previously Twitter). Coinbase’s connection lent credibility to the mission and attracted vital consideration from traders, together with the famend enterprise capital agency Paradigm. FriendTech is the ninth-largest protocol on Base, with a complete worth locked of about $30 million, based on DeFiLlama.
4. Factors System and Potential Sources of Income for Person.
Additionally, past the social facet of FriendTech, the platform launched some extent system and gave factors to customers based mostly on their interactions each Friday. At the moment, these factors had been mentioned to be helpful sooner or later. This acquired the eye of airdrop hunters, who wished to be among the many first to get in and have an opportunity at future rewards.
The Pitfalls – Privateness Breach and Elementary Challenges
FriendTech’s meteoric rise was minimize brief by a vital failing: a privateness breach on August 26, 2023, that uncovered the delicate knowledge of over 101,000 customers. This occasion had a right away affect, with every day revenues plummeting by 87% from a peak of $1.7 million on August 21 to a mere $215,000 simply 5 days later. Transaction volumes adopted an identical trajectory; it declined by 90% from almost 525,000 on August 21 to solely 51,000 by August 27. This dramatic decline prompted some business specialists to outrightly predict the platform’s demise.
Nonetheless, FriendTech’s woes prolong past this privateness failure. A number of basic points increase purple flags across the platform’s long-term viability and skill to attain sustainable development:
1. Privateness and Censorship Resistance Issues
Whereas decentralization is a core tenet, FriendTech’s mannequin of accumulating and storing private knowledge and personal chat histories straight contradicts ideas of privateness and censorship resistance which are foundational to Web3.
2. Social Graph Centralization Bottlenecks
By porting follower graphs from centralized platforms like Twitter, FriendTech recreates most of the identical pitfalls of centralized social media it goals to disrupt, such because the perpetuation of present energy imbalances and social inequities.
3. Dangers of Financializing Social Interactions
FriendTech’s pioneering strategy to tokenize on-line affect and monetize social capital is modern, however explicitly commodifying friendships and creator-fan relationships raises moral issues round potential toxicity if not fastidiously balanced.
4. Pricing Integrity and Manipulation Dangers
Issues exist in regards to the transparency and integrity of FriendTech’s pricing mechanisms, with claims of sudden, irrational worth spikes adopted by steep declines. This volatility opens the door for potential manipulation by automated buying and selling bots making the most of arbitrage alternatives.
5. Doubts Round Creator Monetization
On-chain analysts like Yazan questioned customers’ willingness to pay premium charges for restricted entry to non-public group chats, particularly given reported performance points. The flexibility of creators to genuinely monetize their affect on the platform continues to be very fuzzy.
6. Lengthy-Time period Sustainability Challenges
Compounding these points, Coinbase’s Lisandro Rodríguez recognized FriendTech’s mixture of unchecked person greed and lack of a cohesive scaling technique as the foundation trigger behind its preliminary public downfall. Unaddressed, these shortcomings round development planning and aligning incentives might derail FriendTech’s long-term sustainability.
Adapting After the Pitfalls: FriendTech 2.0. New Hope on the Horizon?
Regardless of its preliminary stumbles, the FriendTech group has doubled down with an bold v2 aiming to handle critiques and obtain sustainable development. In April 2024, FriendTech v2 was unveiled in an try to handle a few of the challenges it confronted and reignite person engagement. A number of the key new options embody:
Native Token and DEX Integration
FriendTech now has a local token, $FRIEND, that can be used for all platform transactions and costs. This transition from ETH funds might assist streamline the person expertise. As well as, the platform now hosts a DEX, which permits customers to commerce this new token, “keys,” and different numerous digital belongings. There may be, nonetheless, a 1.5% payment on all trades performed by way of the platfrom. This transfer is predicted to inject a brand new layer of utility and probably incentivize person participation.
Golf equipment – Group-Owned Social Areas
Transferring past simply private affect tokens, FriendTech v2 introduces “Golf equipment” – collective group areas the place key holders can be part of collectively to personal and function a shared social hub. This permits passionate fan teams to self-organize round shared pursuits, with their very own governance and membership management. Keys to those Golf equipment can be transacted in FRIEND tokens, creating an inner economic system throughout the platform.
Person Adoption Incentives
To bootstrap its new token economic system, FriendTech performed an airdrop program rewarding early customers with FRIEND tokens. This goals to foster an energetic group and entice new customers in search of to take part within the platform’s development
The Path to Crucial Adoption: Can FriendTech Survive?
Whereas FriendTech’s model 2 overhaul guarantees promising new options, the lingering query stays: will it’s sufficient for FriendTech to attain self-sustaining, vital adoption?
For that to be a actuality, the platform should overcome its rocky beginnings and the basic challenges mentioned earlier, significantly regaining person belief after the devastating privateness breach and demonstrating a viable long-term worth proposition. Past that, it should additionally want to handle sure points that popped up as a consequence of its new route.
FriendTech’s community-owned “Golf equipment” unlock a brand new frontier of decentralized social dynamics. Nonetheless, additionally they introduce unprecedented complexities round governance, content material moderation, and avoiding the creation of unmoderated poisonous environments – points that centralized incumbents have already struggled with at scale. Plus, the authorized frameworks round monetizing on-line personas, managing decentralized creator funds, and governance of decentralized communities stay extremely ambiguous
Whereas transaction charges assist bootstrap liquidity, FriendTech should guarantee its $FRIEND token has substantial use instances and community demand to evolve right into a wholesome, self-sustaining economic system long-term. A complete token utility roadmap bridging hypothesis and tangible utility can be vital.
Whereas FriendTech was an early pioneer, it now faces stiff competitors from each entrenched centralized platforms and rising upstarts like Lens are additionally vying to change into the conference for decentralized social media.
Remaining Ideas
FriendTech isn’t the primary social media platform constructed on blockchain to face challenges. BitClout, one other platform with backing from main enterprise capitalists, encountered related points with privateness and authorized hurdles.
Nonetheless, the FriendTech idea is a daring one because it questions the true worth of “social capital” and what the way forward for on-line interactions ought to appear like. Its success or failure will supply invaluable insights into the feasibility of decentralizing our digital social lives.
The FriendTech Model 2 is a major comeback try; the FRIEND token, Golf equipment, and airdrop program supply intriguing prospects. Nonetheless, solely time will inform if FriendTech can overcome previous points, entice a vital mass of customers, and carve out a distinct segment within the ever-evolving social media panorama.
Disclaimer: This text is meant solely for informational functions and shouldn’t be thought-about buying and selling or funding recommendation. Nothing herein ought to be construed as monetary, authorized, or tax recommendation. Buying and selling or investing in cryptocurrencies carries a substantial threat of monetary loss. At all times conduct due diligence.
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