The recently launched decentralized social network app Friend.tech is taking the cryptocurrency community by storm as it has generated over $1 million in fees, surpassing Uniswap and the Bitcoin network.
According to the DeFi analytics platform DeFiLlama, Friend-tech has generated over $1.4 million in protocol fees in the last 24 hours, outperforming the established players like Uniswap, Bitcoin (BTC), Tron, MakerDAO, and BNB and just slightly behind the Lido protocol. The Ethereum network is, by far, the leader, with $3.33 million generated in network fees in the last 24 hours.
Friend-tech first crossed the $1 million mark on Saturday, August 19, and didn’t look back with its more than 65,000 and counting users. Since its beta version launch, the protocol has recorded more than 29,600 ETH in trading volume.
What is Friend.tech, and will the hype continue?
Built on Coinbase’s layer-2 network Base, the Friend.tech launched its beta version on August 11. It works as a decentralized social (DeSo) network app where users can tokenize their social network by buying and selling shares of their connections. This then allows users to have a private chat with each other.
The protocol reportedly charges a 5% fee on transactions, with the spread from trades representing the owner’s profit. As more people buy someone’s shares, the share price increases exponentially.
The app has become the hottest new thing in crypto as it has seen inspiring signups from crypto and non-crypto celebrities and influencers, including the Russian protest group Pussy Riot. Garry Tan, CEO of the famous incubator Y Combinator, has also joined Friend.tech and shared his invitation code on Monday, August 21.
Many crypto industry heavyweights have praised Friend.tech for bringing thousands of people on-chain and the model its presents. The app gained so much traffic that its chat feature experienced a brief outage on Sunday. On August 19, Friend.tech hinted about a seed round funding from crypto venture capital firm Paradigm, sparking speculation over a future airdrop and potential token launch.
However, some are giving it only a few months to live. X user Yazan said the creators are making money without doing anything, just a group chat. Furthermore, the pricing model can easily be manipulated for pump and dump. This is just hype; the project will die once the activity decreases.
Let me tell you one thing.
— Yazan (@YazanXBT) August 20, 2023
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
According to critics, users buy shares only to have a group chat. The shares’ price increases exponentially as outstanding shares grow. Currently, everyone is jumping on the opportunity to make money. This activity will nosedive soon as no one will be ready to pay hefty only to see a group chat.
Furthermore, Lux Moreau pointed out the problem of the pricing model, saying that quick selling of purchased shares is also not profitable.
Nevertheless, there’s no denying that the app has taken crypto by storm. Proponents have praised the app for its novel developments in UX for crypto applications. It also received thumbs-up for allowing users to deposit their ETH once and then buy and sell shares without ever having to sign a transaction again.
