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Is Friend.Tech The Next Big Thing?
Research on Friend.tech and Social-Fi as a narrative
Friend.Tech Is Extremely Profitable
Friend.tech is a on-chain Social-Fi app built on Base, Coinbase’s Layer 2. The model is simple: Users sign up, and can purchase “keys” (i.e shares) of other users. The shares can be bought or sold, and like any speculative asset, the more that people buy your shares, the higher price goes.
Users gain a fee of all trading volume of their own shares, and the platform takes a cut as well.
Considering the fact that it’s less than one month old yet has made the equivalent of OpenSea in fees in the past 30 days, friend.tech has seen tremendous growth. $84.6 million of inflows in under a month with over 125,000 unique accounts makes friend.tech one of crypto’s most successful projects in this bear market so far.
Friend.tech has also onboarded notable influencers, such as 100 Thieves Nadeshot, Faze Rain, and other OnlyFans’ influencers. While growth and transactions seemed to have slowed down, onboarding a famous influencer will probably re-ignite the ecosystem again.
Friend.Tech’s Offerings For Users
Looking at Friend.tech’s top earners makes it clear how it attracts influencers. With just 423 trades, Cobie has earned $167.3k USD from the platform - the revenue share back to influencers is pretty hefty.
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It’s a virtuous cycle - the more that influencers see the potential of making money, the more come onboard ; and this begets more speculation in the system - users come in with the aim of making money from “flipping” these influencers.
And So.. Will Social-Fi Take Off?
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The Market Has The Say
Friend.tech is not the first time we’ve had Social-Fi. Chiliz, a project launched in 2018 that recently launched their own blockchain, is currently building a fan-token exchange, where users can bet on world-famous football players and clubs. DeSo, a 2019 project, launched a Layer-1 blockchain built to decentralize social media.
Social-Fi has existed before, yet hasn’t actually taken off. Why? Whether something can take off depends heavily on timing. NFTs existed in 2015 - 2017, yet really only took off in 2020 - 2021.
And so, the market is a signal - it rewards those who are right, and punishes those who are wrong. Too early? No one cares. Too late? Everyone’s fixated on something else. Just nice? Everyone loves you. The success of friend.tech could very much be an blaring green light for what is to come.
That being said, I don’t think friend.tech is the product that will rule over Social-Fi. It’s more of a litmus test of future narratives that could influence the crypto markets.
But Remember - Bubbles Pop
Yes, friend.tech is an amazing product that has driven incredible amounts of revenue. But so did Opensea when it was valued at $13bn in 2021 - yet look at where it is two years later, after a vampire attack by Blur and the collapse of the NFT market.
We must remember that crypto markets are first and foremost driven by speculation. For asset classes that are less embedded into the financial ecosystem like NFTs and social tokens, we must remember that they only exist as long as there is some inkling that people can make money from them.
Don’t get lulled into a false sense of complacency that “we are in a new paradigm”. Bubbles pop. Even altcoins in a bear market can barely get over a million in volume in a day - what makes you think your higher beta assets can do better?
Well, but I should leave this talk for the middle of the bull market, not a bear market.
Social-Fi makes a good ponzi idea for next cycle, and I hope it takes off. I’ve long since proclaimed that we need a “new ponzi” for next cycle - 2021 had Defi 2.0 (OHM, etc.), NFTs (shitcoins for retail) and GameFi. 2024 and onwards will need something new - and Social-Fi could be it.
GCR also pointed out that all “new asset classes” always needs two cycles - NFTs were first in 2017, then really took off in 2021. Social Fi seems to follow the same pattern - they debuted in 2019, and perhaps may take off in 2024.
The best strategy here is to ride the wave, but don’t get caught up in it. If everyone believes that trading social tokens is profitable, you'd be an idiot to ignore it - the crypto market is all about attention, after all. But conversely, you’ll be an idiot to hold it to “the next paradigm” - because once people lose attention, it’s game over.
good luck, soldier.
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