Friend.tech, a freshly launched decentralised social (DeSo) network, demonstrated its prowess by amassing over $1 million in fees within 24 hours on August 19th. This impressive feat outstripped well-established players in the cryptocurrency ecosystem, including Uniswap and the Bitcoin network.
The platform’s beta version was unveiled on August 11th, introducing a unique concept that allows users to tokenise their social networks. By buying and selling “shares” of their connections, individuals can send private messages to those whose shares they purchase. The protocol implements a 5% transaction fee, with the profit earned from trades forming the owner’s income.
Leveraging Coinbase’s layer-2 Base, Friend.tech has experienced remarkable engagement levels. DefiLlama’s data reveals that within a single day, the platform generated $1.12 million in fees and an impressive $2.8 million since its inception. As of now, the project’s total revenue stands at $818,620, fueled by more than 650,000 transactions and over 60,000 unique traders on the social platform.
Behind this innovative venture stands the pseudonymous developer known as Racer. Known for creating social media networks like TweetDAO and Stealcam, both centred around nonfungible tokens, Racer aims to empower crypto influencers with substantial followings to earn royalties from trading fees. Also, Friend.tech seeks to foster stronger connections between Web3 projects, venture capitalists, and prominent figures within the cryptocurrency industry.
The surge in excitement has triggered analyses of Friend.tech’s revenue model, potential risks, and future trajectory. Notable decentralised finance researcher Ignas, adopting a pseudonym, highlighted a concern with the current business model. He noted that revenue is solely derived from trading fees rather than increasing the number of shareholders. In addition, Ignas proposed that controversial figures might leverage the platform to earn more or manipulate sentiment for strategic fee generation.
Lux Moreau, the founder of Talk.Markets, further emphasised a crucial aspect of Friend.tech’s system. As shares are bought and sold, their prices experience significant hikes, potentially stimulating the formation of smaller groups or alternative communities within the platform.
1/6 Curious about @friendtech‘s share pricing model?
Here’s the scoop: Fees? 5% flat for the protocol, the buy/sell spread is the owner’s profit.
But here’s where it gets interesting: As outstanding shares grow, the pricing skyrockets exponentially. 🚀
— Lux Moreau ✨ (@MentionLux) August 12, 2023