Friend.tech, a recently unveiled decentralized social (DeSo) network, achieved a remarkable feat by accumulating more than $1 million in fees within a 24-hour span on August 19. This performance outshone that of well-established players within the cryptocurrency ecosystem, including Uniswap and the Bitcoin network.
Introduced in its beta version on August 11, the platform empowers users to tokenize their social networks by trading “shares” of their connections. This facilitates the purchase of another user’s share, enabling the exchange of private messages between individuals. Notably, the protocol imposes a 5% transaction fee, while the profit for the owner is generated from the spread resulting from trades.
Leveraging Coinbase’s layer-2 Base, the platform has experienced significant engagement. Data sourced from DefiLlama reveals that Friend.tech garnered $1.12 million in fees during a 24-hour period and accumulated $2.8 million since its initial launch. As of now, the aggregate project revenue stands at $818,620, encompassing over 650,000 transactions executed on the social platform by more than 60,000 distinct traders.
Believed to be the driving force behind the project is the pseudonymous developer known as Racer. A senior software engineer from Coinbase has indicated that Racer has previously spearheaded the creation of social media networks such as TweetDAO and Stealcam, both of which were structured around nonfungible tokens. With Friend.tech, Racer’s focus is twofold: catering to crypto influencers who boast substantial fan followings, enabling them to accrue royalties through trading fees, and providing a platform for Web3 projects aiming to fortify connections with venture capitalists and influential figures within the cryptocurrency realm.
The buzz surrounding Friend.tech has also incited discussions that delve into the social platform’s revenue model, potential risks, and its outlook. A pseudonymous researcher in the decentralized finance field, Ignas, noted that under the current business model of Friend.tech, revenue stems exclusively from trading fees rather than expanding the pool of shareholders. In a post on X (formerly Twitter), Ignas remarked, “Controversial personalities might earn more or even creating FUD will be used as a strategy to earn fees.”
Lux Moreau, founder of Talk.Markets, further highlighted that as shares are exchanged, their prices see substantial escalations. This phenomenon could potentially foster the emergence of smaller groups within the platform or even lead to the creation of alternative groups.
2/6 Potential issue with this approach:
As shares get sold, the prices also significantly increase. For example, the 500th member pays around 15.6Ξ, the 250th member pays 3.9Ξ, and the 100th member pays 0.625Ξ.
This encourages smaller groups or alt group creations. pic.twitter.com/WVAjxFh0ee
— Lux Moreau ✨ (@MentionLux) August 12, 2023
