The new decentralized social media app Friend.tech has made waves in the past week and has taken the crypto world by storm. Within two weeks of its launch, trading fees from the social media app have grown to rival top cryptocurrencies like Bitcoin and Tron as crypto enthusiasts rush to check what the platform offers. However, some critics argue this is unsustainable and will alter once the excitement surrounding the app begins to wane.
Friend.tech 24-Hour Fees Climb To $1.4 Million
Friend.tech is the latest decentralized social media app in the world of cryptocurrencies. Operating on Coinbase’s Layer 2 Base chain, the social media app allows users to trade tokenized shares of other users’ profiles using ETH. The decentralized application (DApp) is integrated with X (formerly Twitter), allowing users to link their account to X, which is then represented by social tokens on Friend.tech.
The app charges a 10% fee every time a user buys the shares of another user where 5% goes to the protocol, while the other 5% goes to the person whose shares are being traded. As share buying ramps up, data from DeFiLlama shows that trading fees on the social media app have grown rapidly in the past 24 hours.
On-chain data show the protocol making $1.42 million in a 24-hour period, surpassing the fees of mainstream chains like Bitcoin, Tron, and BSC, and DEXes like PancakeSwap and Uniswap, in the same time period. This would mean that users have also made approximately $580,000 from trading fees when shares of their profiles were bought in the past 24 hours.
Users make $580,000 from fees in 24 hours | Source: DefiLlama
Friend.tech has also received a flurry of users. Its beta version was launched on Thursday, 10 August, registering over 30,000 transactions and 4,400 ETH ($8.1 million) in trading volume in its first 24 hours. At the time of writing, data from Dune Analytics shows that 16,657.20 ETH ($28.6 million) has been spent on buying profile shares.
Some Critics Don’t Think This Will Last
While the sheer trading volume and revenue fees of Friend.tech has shown the potential of the app, some critics have argued about its long-term viability. According to a tweet by crypto on-chain sleuth YazanXBT, something doesn’t feel right with the app’s structure, with the way pricing works showing red flags of pumps and dumps.
Let me tell you one thing.
Something isn’t right about @friendtech.
🚩 Creators making money from a group chat that doesn’t even work when you can’t even reply directly to people?
🚩 The way pricing works is ridiculous and can be easily taken advantage of.
🚩 Pumps and dumps. pic.twitter.com/TJqcktEM6P
— Yazan (@YazanXBT) August 20, 2023
Another crypto analyst, Miles Deutscher, shared his opinion, saying that the app is far from polished.
Btw, I don’t view Friend Tech as a “killer dApp”, it’s a cool concept – but far from polished and I think it’s likely we see better iterations of social tech in the future.
However, the speed in which it penetrated the market is intriguing, and shows how a good idea with a…
— Miles Deutscher (@milesdeutscher) August 20, 2023
The early success of Friend.tech shows how quickly a crypto product can penetrate the market when there’s a strong market fit. However, while the future of Friend.tech and decentralized social media looks bright, there are still obstacles to overcome.
Friend.tech is not the first decentralized social media app to make waves. BitClout, a blockchain-based social media platform, gained similar traction in 2021. At its peak, BitClout’s token, $DESO, was listed on Coinbase and was trading for more than $180. However, the value of $DESO has since tanked, with the token now trading at $8.95.
ETH is currently the token powering the Friend.tech ecosystem | Source: ETHUSD on Tradingview.com