Is Friend.tech a Friend or a Foe? A Glimpse of the New Social App Generating Millions in Trading Volume
In the last 24 hours, crypto-Twitter has discovered a new Web3 social app to obsess over.
On Thursday afternoon, friend.tech, a decentralized platform that calls itself “the marketplace for your friends,” opened its invitation-only beta test. The app essentially allows users to tokenize their social network and is built on Base, crypto exchange Coinbase’s new Layer 2 network.
https://t.co/L11mNJZgY3 is a decentralized social media app that tokenizes crypto personalities:
– You can buy and sell "shares" of people
– Ownership of a share grants you access to a private chat with that person
– Share price fluctuates according to supply and demand pic.twitter.com/qzfAoAa6u9— yuga.eth 🛡 (@yugacohler) August 11, 2023
According to a tweet from Yuga Cohler, lead software engineer at Coinbase, user.friend.tech creates a profile to sell “shares” of themselves to their followers. At this point, buying a share grants the owners the opportunity to exchange private messages with them.
The platform courts influencers who already have large Twitter followings, including influencer Jordan Fish, commonly known as Cobie, and pseudonymous trader Hsaka Trades. Yesterday afternoon, Hsaka Trades posted a tweet saying the platform will “rapidly evolve into a cameo-like platform for [Crypto Twitter]” that will allow users to collect shares for privileges such as sending a tweet from Influencer account.
Although the application is still in its infancy, first metrics show its rapid adoption. According to data from Dune Analytics, since its launch, the application has facilitated over 126,000 transactions and generated a trading volume of 4,400 ETH, or over $8.1 million. Further Dune data shows that it surpassed the trading volume of NFT marketplace OpenSea yesterday and achieved almost double the trading volume of the leading NFT marketplace.
https://t.co/xqO9RzksRZ has seen explosive growth with over $6.8M (3.7k+ ETH) in trading volume
Comparing its performance since launch to the ENTIRE Ethereum NFT market it has:
~9x as many txs
-1.4x as many buyers
– .9x the volume as mainnetWe'll see where the platform goes… pic.twitter.com/1BiHMrY6zN
— J.Hackworth (@jphackworth42) August 11, 2023
Friend.tech is also taking Base by storm. As of early Friday morning, the network hit 136,000 daily active users, overtaking Layer 2 network Arbitrum, much of which is attributed to Friend.tech users.
“It’s exciting to see apps like friend.tech bring a new dimension to social media in Base,” Cohler told AskFX. “I think innovation and decentralization are key in this space, and I’m definitely excited to see what new features Friend.tech will introduce in the future.”
This popularity comes with risks. On the first day of the application, network outages occurred due to the influx of users as more and more influencers signed up for the platform and many users complained about lags and crashes of the app.
Seems the https://t.co/w0IpE8Tb7N infrastructure runs off of a potato and some AA batteries… my dead grandmother moves faster than this
— füture (@FutureFanatik) August 11, 2023
Although friend.tech has experienced exponential growth in the 24 hours since its launch, there are some red flags regarding its history, roadmap and privacy policy.
Where did friend.tech comes from?
https://t.co/L11mNJZgY3 is built by @0xRacerAlt, a crypto OG.
He was the lead dev of @TweetDAO – an NFT which granted access to posting from a shared Twitter account.
The project went viral before devolving. It was one of the first forays into decentralized social media. pic.twitter.com/3wGo0aQ2Ip
— yuga.eth 🛡 (@yugacohler) August 11, 2023
In Cohler’s tweet, the pseudonymous developer Racer was named as the builder of “friend.tech”. He shared that Racer previously founded TweetDAO, a decentralized autonomous organization that granted use of their Twitter account through ownership of a “TweetDAO Egg,” their native non-fungible token (NFT).
Tweet The main DAO Twitter account has been suspended and the website linked to from the OpenSea site has also disappeared. However, another website connected to the DAO is still active, prompting users to connect their wallets to tweet from an alternative Twitter account that has few posts from August 2022.
After the TweetDAO hype died down, Racer returned with yet another decentralized social platform. Together with pseudonymous co-founder Shrimp or Shrimppepe, the two developers created Stealcam, a Web3 social platform that allows users to imprint images as NFTs and “steal” (actually buy) them for ETH.
The catch? The pictures were not visible until the purchase.
However, in May, the developers decided to rebrand Stealcam to “friend.tech” in order to broaden the audience among Web3 influencers and creators looking to monetize their content. According to Decrypt, Stealcam creators’ earnings had plummeted, and leading influencers were seeing little revenue from their once-thriving content.
Shrimp and Racer told Decrypt that friend.tech was scheduled to launch in “two to four weeks”. They also noted that the platform would be deployed on Arbitrum and advised users to follow @tryfriendtech on Twitter, an account that no longer exists.
Almost three months later and based on Base, friend.tech is here.
Are you selling your shares or data?
Crypto influencers turning to friend.tech are already seeing returns on their shares. However, some have raised concerns about how the platform’s pricing model works and privacy.
Spent ten minutes putting together a spreadsheet for the pricing model for that platform
It's pretty simplistichttps://t.co/HL59SaBAGK
— laurence (@functi0nZer0) August 11, 2023
Laurence Day, a decentralized finance expert and advisor at Protocol Euler Finance, posted a tweet with a stock price model for friend.tech. According to the model, it is a simple supply and demand structure. As a user sells more shares, their purchase price increases according to a quadratic formula.
https://twitter.com/andy8052/status/1689816856423452672?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1689816856423452672%7Ctwgr%5Ee19ba2751c74093eb2af168b83822f434671fe31%7Ctwcon%5Es1_c10
Andy Chorlian, founder of shuttered fractionalized NFT trading platform Tessera, joined the application on Thursday.
Chorlian told AskFX that he’s raked in nearly $1,000 in revenue since joining.
“The team there just knows how to make things that are [Crypto Twitter] fun,” Chorlian said. “And I also made about 0.5 ETH, which is frankly insane considering I’ve just been posting about the app for a while.”
But beyond buying and selling stocks, they have concerns about that expressed how their data would be collected and stored on Friend.tech.
https://t.co/YZ9j2Re78f Upon clicking on "Check out our privacy policy", a pop up window says "Coming soon!" 😆
Okay friend.
— Joy Guo | degenjoy.eth (@Joyyguo) August 11, 2023
The friends.tech desktop site is currently prompting users to download the application using their mobile device. The sparse website contains very little information about the project, there is no information about the roadmap, the founders or any kind of white paper about the project - all things that most serious projects want to have at launch.
Unfortunately, when clicking the link, a pop-up tells users that it’s “coming soon”.
There is also no way to read the privacy policy on mobile devices before installing the friends.tech app. On mobile, the site also forces users to install the app on their home screen, which takes up some of the most valuable phone real estate.
The lack of any privacy policy should worry users who have no idea where their data might go, or where it works.
If you’re considering joining Friend.tech, a post by user DefiIgnas summarizes the precautions you should take:
Advice if you are registering on friendtech:
1. Use an anon email (their privacy policy non-existent).
2. Fund your wallet from a fresh wallet (that's funded from a CEX).
3. Patience. The app doesn't work well under heavy load. https://t.co/tcoeOItqKD— Ignas | DeFi Research (@DefiIgnas) August 11, 2023
Friend.tech’s future
Every time a new Web3 application launches a large Promising returns and community engagement, it’s hard for influencers to stay away. But it is also important to analyze the origins of a project and to understand what goals it later pursues.
Friend.tech is unclear on both fronts, which should make users question the long-term feasibility of pouring money into an immature project. From the founders’ abandonment of two previously failed projects to a lack of transparency into data usage, users need to consider the potential risks they face as the platform continues to scale.
Friend.tech allows users to cash out their in-app winnings. It features a “Withdraw ETH” button that allows creators to send cryptocurrencies back to their wallets. This might be one of the most reassuring features of the application so far.
Users noticed a grayed out icon in the corner of the app, indicating that the project will soon be sending a native token to its users. But friend.tech hasn’t said anything about an upcoming token and as mentioned, a roadmap or whitepaper is missing. There is no certainty that they will pull this off.
“Do your own research” applies to Web3 as much as it does to the larger crypto industry. The origin, the mission and the lack of a roadmap of Friend.tech raise the alarm and must be critically questioned in the course of further scaling.
With the slogan “The marketplace for friends” the application might not be so friendly after all.
UPDATE (11 Aug 19:54 UTC): Clarifies details surrounding Andy Chorlian’s post on friend.tech.
