‘Social-fi’ app friend.tech has generated massive Ether revenues since launching two weeks ago, but are there red flags?
The numbers are in: over the past 24 hours, new social tokenization app friend.tech has raked in $1.68m in fees, surpassing Bitcoin, Tron and Lido (DeFi Llama).
The platform launched just two weeks ago, and to say it’s taken off to a roaring start would be putting it mildly.
More than 100,000 users have already signed up for the invite-only app, which is still in beta, and the project has already amassed 40,138.2 ETH in volume ($66,842,144), according to Dune Analytics.
The creators of friends.tech recently told Decrypt they “didn’t expect” the app to go viral quickly as it did, and they’re now “doing a bit of catch-up”.
So what actually is friends.tech?
On their website, the platform markets itself as a “marketplace for your friends”.
Put simply, it’s a social media app that lets users tokenise their online personalities into ‘shares’ (or ‘keys’) to sell to anyone willing to invest. This enables users to ‘buy’ shares of people with an account on X, granting them certain privileges, namely access to a private chat.
In many ways, the app provides a new pathway for social media influencers to capitalise on their popularity, but it’s also a means of forging and supporting friends.
“Your network is your net worth,” friend.tech’s X bio reads.
The app is still in beta and can only be accessed via invite. It’s built on Base, Coinbase’s layer-2 scaling solution that runs alongside Ethereum.
Share prices fluctuate according to supply and demand, said Coinbase software engineer Yuga Cohler on X.
Since launching, the app has been subject to such heavy traffic that it “barely works”, said Cohler, adding “yet, the user growth is unstoppable”.
The reason for this, reportedly, is because users are making money by doing very little.
“Every buy/sell of a share of a person results in that person making ETH – the ‘subject fee,” Cohler wrote, adding, “I have made ~0.05 ETH to date, doing absolutely nothing. This results in extremely strong network effects. The more trading and speculation on you, the more money you make.”
Cohler added: “This has led to a predictable surge of CT influencers shilling the app and giving out invite codes. They are incentivized to do so.”
Indeed – a key driver of the friend.tech frenzy has been endorsements from popular figures such as esports influencer Ricky “FaZe Banks” Bengston and NBA player Grayson Allen.
“How is friend.tech not a clear as day Ponzi?”
Friend.tech’s monumental launch has been riveting, but there are some red flags associated with the project.
One red flag is the unknown identity of the person behind the project. Little is known about the team, other than that its lead developer goes by the name ‘Racer’. Racer developed the now devolved TweetDAO, but the X and OpenSea pages for TweetDAO have since been taken down.
Additionally, evidence noted by the crypto community suggests that the team behind friends.tech also launched NFT project Kosetto back in 2022. The Kosetto project allegedly spammed users with referral codes to hype and pump the value of the project, only to disappear with no communication or warning to users in January 2023.
“Please be careful putting too much money into it,” Nix.eth, VP of Innovation at Horizen Labs Ventures, wrote on X.
TheChartGuys, a popular community of traders on X, also wrote, “If someone can please fill me in, how is #friendTech not a clear as day Ponzi? You buy and if more people buy that group it goes up. The only way to appreciate is more people coming in, with the inevitability of a load of bag holders. What am I missing?”
The project’s latest update announced that it’s changed the name of ‘shares’ to ‘keys’, citing it “better illustrates their purpose as in-app items used to unlock your friends’ chatrooms”.
The name change also likely helps avert attention from the US Securities and Exchanges Commission (SEC) which has taken a heavy-handed approach to crypto regulation over the past year.
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