Friend.tech, a brand new decentralized social media (DeSo) app, has quickly develop into one of many hottest new issues in crypto, with over 64,000 new customers and greater than 24,000 Ether (ETH) in buying and selling quantity since its beta model launch of Aug. 11.
While many crypto trade heavyweights have praised the app for bringing 1000’s of individuals on-chain and provoking sign-ups from even non-crypto figures — similar to gaming YouTuber Faze Banks and Russian protest group Pussy Riot — some have warned it’s vulnerable to burning out.
Built on Coinbase’s layer-2 community Base, Friend.tech is a platform that enables customers to buy shares of their associates and influencers, which in flip grants them entry to a non-public chat with that person.
Speaking to Cointelegraph, crypto commentator Yazan identified plenty of troubling components that led him to consider the app has between six and eight weeks earlier than each share costs and basic exercise start to nosedive.
Let me let you know one factor.
Something isn’t proper about @friendtech.
Creators creating wealth from a gaggle chat that doesn’t even work when you’ll be able to’t even reply straight to folks?
The means pricing works is ridiculous and could be simply taken benefit of.
Pumps and dumps. pic.twitter.com/TJqcktEM6P
— Yazan (@YazanXBT) August 20, 2023
Yazan argued that the speed at which share costs have elevated has been unsustainable.
“The fucked up market making that guarantees that the app makes the most money along with creators — the price goes up too fast,” he mentioned.
“How come there’s 100 holders and the price is 1 ETH — 1 ETH to be able to see a private chat?”
According to pseudonymous software program engineer Cygaar in an Aug. 20 X (previously Twitter) thread, the value of somebody’s shares on Friend.tech is proportional to the sq. of the excellent provide. As the availability will increase, the value will increase exponentially.
It seems to be daunting, so let’s simplify it. Let’s assume that you just solely need to purchase/promote a single share (quantity = 1). This is also called the spot worth.
Using our center faculty algebra abilities, we are able to increase out the perform and we’ll get:
worth = provide^2 / 16000
— cygaar (@0xCygaar) August 19, 2023
Drawing parallels to BitClout — a predecessor DeSo app from 2021 — pseudonymous Web3 marketer Legendary shared his bearish prediction on the longevity of Friend.tech.
“I think the platform will collapse as BitClout did. We are in a bear market, and there’s nothing to do. Everyone jumps on an opportunity to make money, but I think the platform will be done within the next weeks to months,” he wrote.
The bull case for Friend.tech
Others, nonetheless, shared a much more optimistic outlook on the brand new decentralized social media platform, praising it for its novel developments in person expertise for crypto functions — one thing that crypto app builders have long struggled to get right.
David Phelps, the co-founder of Jokerace and EcoDAO, described Friend.tech’s UX because the “greatest crypto has seen,” pointing to three fundamental components as to why the app was such a major breakthrough for crypto.
Firstly, the app doesn’t require customers to obtain through an app retailer account, which factors extra strongly to the thought of decentralization. Secondly, it bridges the funds to the app robotically, decreasing the necessity for convoluted transactions.
Finally, the app permits customers to deposit their ETH as soon as after which purchase and promote shares with out ever having to signal a transaction once more. The fixed want to confirm transactions through MetaMask signatures has been a major criticism of many decentralized functions within the crypto area.
Related: Friend.tech generates over $1M fees in 24h, surpassing Uniswap, Bitcoin networks
Regardless of the numerous predictions in regards to the app’s future success or failure, there’s no denying that it has taken crypto by storm.
On Aug. 19, Friend.tech introduced that it had obtained seed spherical funding from crypto enterprise capital agency Paradigm, sparking a wave of speculation over a future airdrop and potential token launch.
Earlier this yr, we partnered with @paradigm to construct instruments for brand spanking new on-line social interactions.
We’re grateful for the neighborhood’s heat reception and excited to proceed rising with you all pic.twitter.com/yINDMXkpuZ
— buddy.tech (@friendtech) August 18, 2023
According to knowledge from DefiLlama, Friend.tech has generated $1.42 million in charges within the last 24 hours and $4.2 million since its public launch.
At the time of publication, the overall income for the mission stands at $1.88 million, and it has witnessed over 724,000 transactions from greater than 64,500 distinctive merchants.
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