Key Takeaways:
- Friend.tech app operates on Coinbase’s Layer-2 solution, enabling users to purchase “keys” (shares) of X (previously Twitter) influencers.
- Unlike tradition, the app’s unique monetization approach relies on content scarcity and speculation.
- Despite its growth, Friend.tech faces criticisms and risks.
YEREVAN (CoinChapter.com) — The crypto community has recently started to ignite conversations about an app called Friend.tech. Different analysts cover it to gauge its nature. So, let’s dive and see how the app works, what it might provide, and its potential risk if such exists.
What Is Friend.tech Exactly, And How Does It Work?
Friend.tech is a social application that runs on Base, Coinbase’s new Layer-2 solution.
The app allows its users to purchase so-called “keys” (shares) of X (previously known as Twitter) influencers. These shares grant the user exclusive access to a private group chat where users can communicate with said personality.
Friend.tech deviates from traditional content-based monetization. The app monetizes users by giving each a personalized token. Other users who buy the token receive the rights mentioned above. At the same time, the token holder receives 5% of the trading volume as revenue.
This method relies more on content scarcity and speculation, which contrasts with the traditional way of ad revenue-based profit.
The report further notes that this method has short-term potential. According to Messari data, creators on the app have collectively earned over 1,600 ETH ($2.6 million)—71% of this total accrues to the platform’s top 250 personalities. However, the report says that the long-term prospects remain uncertain.
According to the report, the current traction has been entirely speculation-based and offered limited content thanks to its scarcity model.
Lastly, the report shows that the creators introduced a point system to create more engagement.
Crypto Analysts Notice Flaws
According to Banteg, a pseudonymous crypto analyst, Friend.tech has downsides. For example, Banteg states that Friend.tech leaked the personal information of more than 100,000 users. Furthermore, Spot On Chain, a crypto analytics platform, notes that the API is flawed; for example, you can buy or sell without a required invitation code from the contract.
🚨🚨 Some facts for the fast-growing @friendtech project:
— Spot On Chain (@spotonchain) August 21, 2023
➡️ generated a 2,953 $ETH (~$5M) fee in just 11 days
➡️ The current value of all shares is 4,435 $ETH (~$7.4M)
However:
🚫 data leak via API
🚫 you can buy/sell shares without an invitation code from the contract
More… pic.twitter.com/lRGDUJQgFZ
Moreover, an on-chain analyst who goes by “Yazan” states that the group chat interface doesn’t work as intended since you apparently cannot reply to people. Yazan also criticized the pricing strategy of Friend.tech.
Friend.tech is Risky – ForkLog Says
ForkLog, a Russia-based crypto news outlet, posits that the growing app has issues. In their opinion, the so-called shares on the platform are highly volatile, and their price depends on their creator. If, for example, the user suddenly leaves the platform, the token price will fall sharply.
Moreover, the outlet suspects that scammers can use the platform for fraud. More specifically, to conduct “Pump & Dump” schemes.
In addition, ForkLog states that Friend.tech can face regulatory problems. In their mind, developers of Friend.tech recently renamed the shares to keys to avoid attention from US regulators.
