Crypto social media network Friend.tech created quite a stir after it earned more than $1 million in fees in a 24-hour period on August 19, 2023. With the move, Friend.tech even managed to outperform Uniswap and Bitcoin. While Bitcoin is among the Top 10 cryptocurrencies of the world, Uniswap is a leading crypto exchange where users can trade tokens and track live cryptocurrency prices.
The beta version of the decentralized platform was rolled out on August 11, 2023 and it enables its users to tokenize their social network and buy or sell “shares” of their connections. If a person buys a ‘share’. they will be able to send private messages to their owner. For its services, the platform charges a 5% fee.
Friend.tech is powered by Base, a Layer 2 blockchain protocol developed by Coinbase, and has witnessed considerable activity on its network since its launch. According to reports, Friend.tech has raked in $1.12 million in transaction fees in a 24-hour period. Since its launch earlier this month, the platform has raised around $2.8 million in just trading fees.
The platform is believed to be the brainchild of a pseudonymous developer Racer. As per a software engineer at Coinbase, Racer has previous experience of developing social media networks like Stealcam and TweetDAO, both of which are based on NFT. With his new project, Racer is striving to help crypto influencers, with a massive fan following, to explore tokenization and earn royalties on trading fees. The project can also pave the way for Web 3.0 projects that strengthen the network between venture capitalists and other stakeholders of the crypto industry.
The buzz about Friend.tech has also sparked conversation and analysis of its revenue model, potential risks and prospects. Pseudonymous decentralized finance researcher Ignas is of the view that Friend.tech’s business model earns revenue not just from trading fees but also due to having a large number of shareholders.
Friend. Tech provides every user their own “chat group” like one sees on Telegram. To enter this private group chat, one needs to buy shares of the chat’s owner. In case one wants to exit the group, they can sell the shares to other users. Anyone interested in the platform needs an invite code to sign up. It has also received a round of seed funding from cryptocurrency venture capitalist company Paradigm, which had also invested in the now-defunct crypto exchange FTX.
Once you have onboarded the platform, users are required to link their account on X, formerly known as Twitter, with their Ethereum wallets. Friend.tech has been in the eye of the storm due to its process of signing up. Some users have pointed out that by linking their Web 3.0 wallets with their X accounts, they inadvertently gave the Friend.tech app some permissions to their X account. These permissions include the nod to retweet and post on behalf of the user.
The other issue is that when the database of the crypto social media platform was leaked recently, it publicly linked users’ X accounts to their Ethereum wallets, which a user might have made public earlier. Its recently leaked database showed that over 101,000 users had signed up for Friends.tech since its launch.
Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
