Social media is a cornerstone of recent life; it connects us and permits seamless data sharing throughout societies and industries, together with crypto. But, it’s affected by complexities, together with information breaches, opaque algorithms, censorship, prioritizing income over consumer expertise, and an absence of consumer management. Most of those points stem from its centralized mannequin of operations.
Enter FriendTech, an try to deal with these points by leveraging blockchain know-how. Its daring proposition – what if customers really owned their social capital and creators might instantly 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 study whether or not it has the potential to achieve widespread acceptance and develop 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 influence instantly. The platform was created by a pseudonymous duo, Racer and Shrimp, who’ve labored on comparable tasks within the previous.
The platform permits creators to situation tradable “Keys” representing their affect. Followers can purchase these Keys for entry to unique content material or personal chats. Creators, in the meantime, have a brand new option 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 consumer has a set of Keys, which others in search of entry and interplay should purchase. They have interaction with creators whose Keys they possess, both by means of chat interactions or by exploring fashionable creators
As soon as a consumer completes their account setup and funds their wallets, a set of Keys is generated inside their account. These keys could be bought by different customers in search of entry to the account creator. It’s essential to notice that each consumer 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 big buzz throughout the Crypto Twitter group. With this in thoughts, let’s delve into the explanations behind FriendTech’s prompt reputation.
What Makes FriendTech Completely different and Why It Was Profitable at First
This meteoric progress could be attributed to a couple key elements:
1. Tokenization enchantment:
This preliminary success highlights the platform’s capability to faucet into the “consideration financial system” and incentivize consumer participation. FriendTech just isn’t 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 instantly 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 consumer controls their keys. When their keys develop into extra precious, customers can doubtlessly 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 have interaction with their favorite creators by buying particular tokens for interactions; creators can even 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 undertaking and attracted important consideration from buyers, 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, in line with DeFiLlama.
4. Factors System and Potential Sources of Income for Consumer.
Additionally, past the social facet of FriendTech, the platform launched a degree system and gave factors to customers primarily based on their interactions each Friday. At the moment, these factors have been stated to be helpful sooner or later. This acquired the eye of airdrop hunters, who needed 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 information of over 101,000 customers. This occasion had a direct influence, with day by 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 analogous trajectory; it declined by 90% from practically 525,000 on August 21 to solely 51,000 by August 27. This dramatic decline prompted some trade specialists to outrightly predict the platform’s demise.
Nonetheless, FriendTech’s woes prolong past this privateness failure. A number of elementary points elevate crimson flags across the platform’s long-term viability and talent to realize sustainable progress:
1. Privateness and Censorship Resistance Issues
Whereas decentralization is a core tenet, FriendTech’s mannequin of accumulating and storing private information and personal chat histories instantly contradicts ideas of privateness and censorship resistance which might be foundational to Web3.
2. Social Graph Centralization Bottlenecks
By porting follower graphs from centralized platforms like Twitter, FriendTech recreates most of the similar pitfalls of centralized social media it goals to disrupt, such because the perpetuation of current 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 progressive, however explicitly commodifying friendships and creator-fan relationships raises moral considerations round potential toxicity if not rigorously balanced.
4. Pricing Integrity and Manipulation Dangers
Issues exist concerning the transparency and integrity of FriendTech’s pricing mechanisms, with claims of sudden, irrational value spikes adopted by steep declines. This volatility opens the door for potential manipulation by automated buying and selling bots profiting from 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 power of creators to genuinely monetize their affect on the platform remains to be very fuzzy.
6. Lengthy-Time period Sustainability Challenges
Compounding these points, Coinbase’s Lisandro Rodríguez recognized FriendTech’s mixture of unchecked consumer greed and lack of a cohesive scaling technique as the foundation trigger behind its preliminary public downfall. Unaddressed, these shortcomings round progress 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 workforce has doubled down with an formidable v2 aiming to deal with critiques and obtain sustainable progress. In April 2024, FriendTech v2 was unveiled in an try to deal with among the challenges it confronted and reignite consumer engagement. Among 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 consumer expertise. As well as, the platform now hosts a DEX, which permits customers to commerce this new token, “keys,” and different varied digital belongings. There may be, nevertheless, a 1.5% price on all trades performed through the platfrom. This transfer is anticipated to inject a brand new layer of utility and doubtlessly incentivize consumer participation.
Golf equipment – Neighborhood-Owned Social Areas
Shifting 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 enables 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 inside financial system throughout the platform.
Consumer Adoption Incentives
To bootstrap its new token financial system, FriendTech performed an airdrop program rewarding early customers with FRIEND tokens. This goals to foster an energetic group and appeal to new customers in search of to take part within the platform’s progress
The Path to Essential Adoption: Can FriendTech Survive?
Whereas FriendTech’s model 2 overhaul guarantees promising new options, the lingering query stays: will or not it’s sufficient for FriendTech to realize self-sustaining, vital adoption?
For that to be a actuality, the platform should overcome its rocky beginnings and the basic challenges mentioned earlier, notably regaining consumer belief after the devastating privateness breach and demonstrating a viable long-term worth proposition. Past that, it’ll additionally want to deal with sure points that popped up because 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 financial 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 develop into the conference for decentralized social media.
Ultimate 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 comparable 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 to be. Its success or failure will provide invaluable insights into the feasibility of decentralizing our digital social lives.
The FriendTech Model 2 is a big comeback try; the FRIEND token, Golf equipment, and airdrop program provide intriguing potentialities. Nonetheless, solely time will inform if FriendTech can overcome previous points, appeal to 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 needs to be construed as monetary, authorized, or tax recommendation. Buying and selling or investing in cryptocurrencies carries a substantial threat of economic loss. At all times conduct due diligence.
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