Posted on Aug 20, 2023Read on

FriendTech: Social Trading in Web3

FriendTech has recently emerged as an intriguing intersection of social media and speculative trading. It aims to gamify social interactions by allowing users to buy and sell "shares" of individuals they are familiar with or follow on Twitter.

The project has taken Twitter by storm and the protocol has accumulated 3,632 ETH ($5,811,200) in fees at the time of writing. But as with any crypto initiative, there's more to the story than meets the eye.

At its core, the game is a reflection of the inherent value we place on social connections, quantified and made tradable. The premise of the game is simple and has certainly been alluring: as more people invest in your shares, their value rises, turning popularity and influence into a tradable commodity. Through its integration with Twitter, FriendTech allows users to link their digital shares to their real-world identities, which anchors the game in reality and encodes a personal touch.

FriendTech's swift integration into the DeFi universe through ERC20 wrapper contracts also opens the doors to the double-edged dystopian quirks the crypto world has been fairly critiqued for. It's no surprise, then, that opinions on FriendTech vary widely.

Detractors question its ultimate purpose and sustainability, seeing it as merely another venue for speculative trading rather than a genuinely transformative tool – such as a new identity primitive. Is FriendTech merely another way that that crypto will compel ordinary people, through the promise of financial upside, to spend time and money on something that serves no real compounding benefit to the web3 ecosystem? The sentiment can be summed up in a pressing question: "Is this emblematic of the best the crypto industry can offer?”

Others embrace FriendTech's innovative spirit. They celebrate the entertainment value it brings to blockchain transactions, especially with the smooth transition to Base, the new Layer-2 from Coinbase. To these enthusiasts, the platform is less about its speculative potential and more about the sheer joy of on-chain interaction.

By enabling purchasing shares of new profiles, FriendTech has created a gold rush of sorts, where users are incentivized to invest early in potentially high-value shares. As one would expect, this has quickly led to the proliferation of bots designed to “frontrun the opportunity” and quickly accumulate profits based on technical advantage.

The owner of the contract retains the power to set fees and configurations. The fee is currently set to take 5% of all trades, and the contract has accumulated 3,632 ETH ($5,811,200) at the time of writing. Interestingly, the protocol's upgradability, or seeming lack thereof, poses questions about its future adaptability.

In an environment that's rapidly evolving, the inability to upgrade might be a limitation. But the other end of the spectrum, the trading component is decentralized as serves as a lego for new extensions that rest in the hands of ecosystem building around it. The game will run as long as the Base chain is maintained, and will always be open to such extensions.

In essence, FriendTech is a reflection of the broader crypto industry: brimming with potential, yet not without its challenges and controversy. As it weaves social media and DeFi together, only time will tell if it becomes a beacon of innovation or a cautionary tale.