Head over to X, formerly Twitter, and the first post you’ll see is likely to be about Friend.tech, the latest gamified social media offering powered by Coinbase and Paradigm.
Opinions and comments on the app are vast in their approach, with some touting the app as a paradigm shift, others unsure whether to join, and still others still calling it the next BitClout doomed to fail.
Given the early stage of the app, each of these perspectives carries weight and may reflect the true trajectory of the latest craze.
Paradigm shift or doomed to fail?
With the hype for the new social platform appearing to be at an all-time high, there’s no doubt there are early adopters and supporters out there who will benefit from the shares they’ve been buying and selling. These same individuals are also likely to share testimonials about how great and innovative the app is, in that it brings value back to the community – with euphoria fueled by significant amounts of volume.
Absolutely insane.
FT has accrued more fees than Tron, Uniswap, and BTC in the past 24 hours. It’s not far from Lido, where 13.8 billion ETH has been staked!
While the initial airdrop hype may be fading, FT gives us a glimpse of what crypto’s mass adoption feels like. pic.twitter.com/PXKuuNARmk
– Ignas | DeFi Research (@DefiIgnas) August 20, 2023
However, the underlying concept behind Friend.tech is not entirely new. In fact, it is very similar to BitClout from 2021 and while that application is now getting a lot of flack, it once raised over $200 million USD at its peak and was championed by highly regarded social influencers and celebrities.
X user Alex Valaitis, who mentioned working with DeSo, the project behind BitClout, shared why he doesn’t think Friend.tech will last. He has largely attributed this to the mechanism of the platform’s bonding curve, which simply accelerates the price rapidly. However, Valaitis outlines that this is where the “back pull” comes from, as someone will cash out early in the bond curve, leading to a falling price.
The controversial Web3 personality cap further illustrates this, calling the platform a “high-stakes musical chairs” where the only retailers to make it out with any profit are the first to get out first as well. He further shared that influencers, Coinbase and Paradigm will of course come out on top and marks this in line with the nature of the game, saying “this is how things are done and there is nothing new to see here”, but that retail users should proceed with ‘extreme caution’.
Insecurity & Skepticism
The uncertainty surrounding Friend.tech lies in a few different areas, namely the privacy policy or lack thereof, potential regulatory issues, and the public release of data from 100,000 accounts reported as leaked by some outlets.
However, the latter has since been refuted by Friend.tech, who said it was just someone scrapping their public API and that “it’s like saying someone hacked you by looking at your public Twitter feed.” In addition, information such as wallet addresses are already publicly available, as is the nature of the blockchain.
The other concerns, however, remain valid: when you navigate to the app’s privacy policy, a pop-up appears saying “coming soon.” This was understandably off-putting for a large number of users, as financial systems are linked to the app.
Additionally, reports of regulatory attention have surfaced following a weekend that saw the app generate more than $1 million USD in fees in a 24-hour period. Attention is likely a direct result of the profit expectation as creators can share the fees with their ‘shareholders’. While these tokens were originally called stocks, Friend.tech has since been called that changed the name of these tokens to Keys – presumably to prevent unwanted scrutiny.
We’ve renamed Shares to ????????????????. The original name was a placeholder during development and we think Keys better illustrates their purpose as in-app items used to unlock your friends’ chat rooms pic.twitter.com/phkZky13VL
— friend.tech (@friendtech) August 21, 2023
Things to consider
While only time can tell the outcome of Friend.tech, there are a number of opportunities and considerations to keep in mind. The first is that it is more likely than not that the platform will suffer the same fate as BitClout, that private users or “major” investors are undoubtedly in the riskiest position financially, and that creators who choose to use this platform should decide to provide exclusive value to their holders or risk potential reputational damage.
An example of the latter can be seen in the popular X personality, Cozomo de’ Medici’s hesitation by joining the platform. When they asked his followers if he should join, some said why not, while others like artist Bryan Brinkman said expressed that it could detract from the value of Medici’s other initiatives. Nevertheless, Medici has shared that he is “trying it out.”
Numerous artists and prominent community figures have expressed their reluctance to join Friend.tech. The platform, despite its buzz, has failed to captivate the interest of these key players. Their hesitation raises questions about the platform’s potential for mainstream adoption or simply feels exhausted by the amount of other decentralized platforms like BitClout, Mastodon, and Bluesky, which were short-lived in the CT community.
While this is a simple statement, it is important that creators trying out the new platform make the expectations clear to their community and that the community proceed with caution, as there is also a chance of loss along with the chance of profit.