Friend.tech, a recently unveiled decentralized social (DeSo) network, achieved an impressive feat by accumulating over $1 million in fees within a 24-hour timeframe on August 19. This performance surpassed that of established players in the cryptocurrency landscape, including Uniswap and the Bitcoin network.
The platform, introduced in beta form on August 11, introduces a novel concept where users can tokenize their social networks by buying and selling “shares” of their connections. This enables those who acquire these shares to engage in private messaging with one another. Operating with a 5% transaction fee, the protocol leverages the spread from trades to generate profit for the owners.
Leveraging Coinbase’s layer-2 Base, Friend.tech has witnessed substantial activity since its launch. Data from DefiLlama reveals that the platform generated $1.12 million in fees during a 24-hour span and $2.8 million since inception. Presently, the overall project revenue stands at $818,620, marked by over 650,000 transactions within the social platform and a user base exceeding 60,000 unique traders.
The driving force behind the project is believed to be the pseudonymous developer known as Racer. A senior software engineer at Coinbase has revealed that Racer previously spearheaded the creation of social media networks TweetDAO and Stealcam, both of which were built around the concept of nonfungible tokens. With Friend.tech, Racer’s focus is twofold: catering to crypto influencers with substantial fan bases, enabling them to earn royalties from trading fees, and providing a platform for Web3 projects to foster stronger connections with venture capitalists and key figures within the cryptocurrency sector.
The considerable attention surrounding Friend.tech has also triggered discussions about its revenue model, associated risks, and potential future developments. Ignas, a pseudonymous researcher in the decentralized finance realm, pointed out that the platform’s current business model relies solely on trading fees, with no revenue generated from increased shareholder numbers. He highlighted that this setup might lead to controversial personalities or even strategies involving creating fear, uncertainty, and doubt (FUD) to capitalize on fees.
Lux Moreau, the founder of Talk.Markets, added another layer to the analysis, noting that as shares are traded, their prices experience substantial increments. This dynamic could potentially foster the growth of smaller groups within the platform or even the emergence of alternative groups.