Decentralized social networks (DeSo) have recently surged in popularity, promising to redefine our online interactions. One such platform is Friend.tech, a new decentralized social media that "tokenizes" personalities on X (formerly Twitter). Users can engage in the trading of "shares" of their favorite personalities and speculate on their worth. Additionally, possessing these shares grants you privileged "exclusive" access to a private chat with the personality whose shares you hold.
Despite its ambitious pitch, the platform is now in a state of decline. This raises the question: Was Friend.tech doomed from the start? This blog post aims to shed light on the critical issues that led to its downfall.
Reason 1: Flawed Revenue Structure
The revenue model of Friend.tech stood as its first and perhaps most significant red flag. The platform's primary source of revenue came from a 5% fee imposed on each transaction where users traded "shares" of their social connections. At first glance, this might seem like an innovative monetization strategy; however, a closer look reveals inherent flaws.
Firstly, the revenue model does not incentivize community or network growth. Typically, platforms benefit from a larger user base or increased user engagement. However, in Friend.tech's case, simply having more shareholders did not necessarily translate to increased revenue for the platform.
Secondly, the model encourages controversial or even harmful behaviors. For instance, individuals or entities who are skilled at creating FUD (Fear, Uncertainty, and Doubt) could manipulate the market conditions to encourage more trading, thereby inflating their earnings through increased fees. This distorts the platform's original purpose, making it more about gaming the system for financial gain rather than fostering meaningful social interactions.
Reason 2: Untrustworthy Team
The second major issue lies with the team behind Friend.tech. In the world of cryptocurrencies and decentralized platforms, trust is paramount. However, the creators of Friend.tech had a questionable track record, particularly with their previous venture, @KosettoIsKawaii.
This earlier project, which focused on selling wearable NFT stickers, had a hype-fueled launch filled with promises. Users were encouraged to spread referral codes, contributing to a pumped ecosystem. However, without any prior notice or communication, @KosettoIsKawaii vanished. The last update was in January that a Chrome extension was available, leaving users bewildered and betrayed.
The team's behavior in this incident demonstrated a significant lack of accountability and raises questions about their ethical and business practices.
Reason 3: Eerily Reminiscent of BitClout, A Failed DeSo Experiment
The spectacular failure of BitClout was a precedent that underscored the inherent risks and flaws in Friend.tech's model. Like Friend.tech, BitClout was a blockchain-based social network with a similar focus on monetizing social connections through "creator coins." However, its complex and speculative revenue model, based on a native cryptocurrency that could only be purchased with Bitcoin, created an unsustainable economic environment.
The platform's flawed design made it reliant on speculation rather than meaningful social engagement. That’s not where the similarities end. BitClout's founder, Nader Al-Naji, had similarly launched a failed project before he started BitClout - a decentralized, price-stable cryptocurrency called Basis. The project quickly went bust after drawing the ire of the SEC when it became apparent it was trying to publicly sell tokens with the characteristics of securities.
By emulating a model with a proven record of failure, Friend.tech sealed its fate. The similarities between the two platforms—whether in their monetization strategies, community engagement, or a problematic founder—suggest that Friend.tech was doomed from the start, following in the footsteps of BitClout's spectacular demise.
Friend.tech promised a revolutionary way to interact in the digital world, but it was plagued with issues from its inception—flawed revenue structure, an untrustworthy team, and a precedent of failure.
As we observe the platform's decline, it serves as a cautionary tale for potential investors and authorities. Don’t get caught up in hype, and always do proper due diligence.