Introduction
SocialFi
The Friend.tech Frenzy
Data
Friendzy
Main Differences with Friend.tech
Top Accounts
SocialFi Risks
Conclusion
Introduction
The SocialFi narrative is powering through the timeline and on-chain data shows signs of success already. Just this week, Solana saw the rise of a new SocialFi platform inspired by the recent success of Base’s friend.tech. Today we will take a look at Friendzy and FT.
SocialFi
The latest crypto narrative is called SocialFi. SocialFi mixes Social Media with Finance, opening up a realm of possibilities for users to make money based on social value. SocialFi enables users to monetize their social media presence and earn crypto for creating, sharing content and engaging with their audience. This could be particularly appealing to content creators, influencers, and artists looking for alternative revenue streams.
Blockchain technology allows users to have command and ownership of their data and digital assets, which in turn gives them control over who accesses their data and how it is used, reducing the power of centralized social media companies.
The convergence of social media with the world of finance introduces interesting concepts like the one we will be covering today, where users can buy shares of social media profiles and trade them. Tokenizing digital profiles could create new forms of social capital and investment opportunities, but it also raises questions about privacy, security and lawfulness.
Cryptocurrencies are global by nature, which means that SocialFi platforms could potentially connect people from all over the world, enabling cross-border transactions and interactions without traditional financial intermediaries.
The Friend.tech Frenzy
Friend.tech launched on the Ethereum L2 chain, Base. Even though we are currently in the middle of a bear market, the social platform FT has seen strong growth and most importantly, data is starting to point to healthy user retention. In just a couple of months, it has skyrocketed in TVL, Daily Active Addresses and Volume.
Data
FT saw a high of almost 40K daily active addresses in the first week of launch. It has recently seen an uptick in activity, with an average of 18K daily active users in the last two weeks.
Since its inception, FT has recorded a total volume of $146M, more than 230K buyers and close to 7 million transactions.
Friendzy
Friendzy is the Solana SocialFi app of the moment. It launched this week and started on the wrong foot, with a seemingly unlucky X suspension some hours after the launch. The suspension sparked fears of it being a rug but the team quickly added a disclaimer on the website saying it was an unfair ban. For reference, projects such as DegenApeAcademy and DeGods had difficult launches like Friendzy, and are today in the list of the most relevant NFT projects on Solana and Ethereum. Since then, they have been deploying several updates since launch and now have a new X account. The app is similar to the Ethereum equivalent, however it has some key differences.
Main Differences with Friend.tech
FriendTech collects your private information from X due to the way users connect their X account to FT. Friendzy simply asks you to tweet a code and you get verified in 15 seconds, with no permissions granted. The linking process does not grant Friendzy any access to the user’s X profile. It is strictly utilized to associate a profile with its address, without compromising any private information or account settings.
Unlike FT where a profile is only tradable once its owner creates an account, users can trade virtually every social media account. The owner of a certain account can verify its ownership at any time and may collect any royalties generated from trading.
In addition, Friendzy’s bonding curve is less aggressive than FT. This means that buys and sells cause less volatility than on Friend.tech. The team stated that the reason for this change is that floor prices on FT plateau rather quickly as most of its users get quickly priced out after big moves. This allows Friendzy to theoretically generate more volume and enable more traders to participate in the platform.
Top Accounts
On FT, the biggest account is from one of the Founders of the app. Similar to FT, Friendzy’s account is the most valuable at the time of writing, with a market cap of $23K. The biggest Solana bulls and influencers are on the leaderboard such as Ansem, Solana Sensei, R89 and SolBigBrain.
Risks of SocialFi
SocialFi, which blends social media and finance, has risks. These include regulatory uncertainties, privacy and security concerns, cryptocurrency price volatility, scams, and a lack of consumer protection. There's also the risk of centralization, market manipulation, legal and tax complexities, and dependency on social media platforms, each of which can impact users' financial well-being. In essence, while SocialFi offers opportunities, users should be cautious, informed, and prepared for these potential risks.
Conclusion
The SocialFi frenzy has spread to Solana. Although the platform is growing fast, there are questions about its safety and legitimacy. At Step, we highly recommend you use burner wallets for any transaction that may put your money at risk.