Friend.tech (FRIEND) Stalls the Promising Narrative of SocialFi in Q2

SocialFi was among the promising trends of 2024, aiming to revive a fee-based economy with an element of social media.

SocialFi, a promising narrative in the first half of 2024, stalled in Q2, largely due to the decline in Friend.tech (FRIEND) usage. Despite initially being a hot asset, FRIEND also crashed, reflecting the low usage of the decentralized social media trend.

SocialFi emerged as a promising trend in 2024, aiming to revitalize a fee-based economy within the realm of social media. It succeeded older attempts at content generation, offering the potential to earn crypto and share fees and earnings. Several new SocialFi projects were launched in late 2023, focusing on content-generating communities.

FRIEND founders tapped new users for exit liquidity

Friend.tech (FRIEND) dominated the sector and quickly became a fat-fee app. However, the project saw all activity flow out in just one quarter, as the founders tapped new users for exit liquidity. The rapid decline in FRIEND tokens also discouraged users, particularly those capable of providing content. Ultimately, Friendtech lost its source of fees and now exists with minimal content in the last remaining clubs.

Periodic reminder that Friendtech earned $65M in fees and $32M rev and is now just posting copypasta trending clubs that do ~$20 cumulative volume per day.

Key hasn't generated notable fees in over a month pic.twitter.com/4URpFkNuOD

At its peak, Friend.tech reached nearly 84K wallets, largely tapping the audience of the Base blockchain. SocialFi was touted as one of the peak use cases for Web3, especially for low-fee networks like Base. It was a booming narrative with a handful of promising projects, which expanded its value locked in late 2023. In total, SocialFi projects drew in $53M during the early stages of the 2024 bull market.

Only a handful of SocialFi projects gained prominence, but Friend.tech led the market. Other prominent Web3 content hubs included Cipher and The Arena. In the first half of the year, more than 50 SocialFi projects emerged, but currently they are all in freefall, losing between 20% and 85% of their value locked.

The SocialFi narrative was quickly replaced, especially after several market crashes. The crashes were also largely influenced by Friend.tech. The project’s co-founder, known as Racer on social media, expressed plans to move the platform from Base to another chain. This announcement led to the initial outflow of users, causing the whole sector to spiral.

Racer’s persona also led to the loss of credibility for Friend.tech. Many crypto insiders joined the project, based on the promises of high fee generation and profit-sharing. At one point, Racer was touted as the Mark Zuckerberg of crypto, during the best growth days of SocialFi. As of August 2024, Racer’s account was actually among the only ones active on the Friend.tech network. Just a year ago, Friend.tech was tapping long-running crypto influencers like @cobie, turning them into top accounts with SocialFi influence.

Friend.tech shows signs of attempted relaunch

During its heyday, Friend.tech was considered capable of becoming a unicorn among Web3 products. The project reached more than 37K daily active users at its peak, while claiming bigger scalability potential. Soon after that, Friend.tech slid to fewer than 200 daily active users, with a handful of true believers driving activity.

Even during peak times, the project’s founders and a handful of leading accounts managed to extract value from Friend.tech, as the project favored early supporters. This time around, it may be more difficult to propose the same model, as SocialFi is seen as a potential money grab and a slow rug pull.

The FRIEND token is down from a peak above $3 to a current level of $0.19. The extremely low price has led some to return to FRIEND as a potential wild card, capable of expanding on expectations that the Friend.tech project may return.

Recently, investor Jeffrey Huang raised the question of migrating Friend.tech to either Blast or Solana. Huang, also known for his social media persona, Machi Big Brother, has already taken hefty losses on FRIEND. Despite this, in the past days he returned as a whale to buy up more FRIEND at the lowest possible price. On-chain data shows Huang added more FRIEND, spending more than $16M. But the buying may not be enough to revive SocialFi, as Huang has poured funds into crashing tokens before, taking losses on APE and BLUR.

Friend.tech users also took losses on Keys, an asset that had to be acquired to participate in the decentralized social media. Key trading included bot buying frenzy, but in the end Keys also lost value quickly and became worthless. At this point, the relaunch of Friend.tech is improbable, but hype and promises of an airdrop

The above is the detailed content of Friend.tech (FRIEND) Stalls the Promising Narrative of SocialFi in Q2. For more information, please follow other related articles on the PHP Chinese website!