Friend.tech hype unsustainable? Critics give it only months to live

Buddy.tech, a brand new decentralized social media (DeSo) app has quickly turn into one of many hottest new issues in crypto, with over 64,000 new customers and greater than 24,000 ETH in buying and selling quantity since its beta model launch of Aug. 11. 

Whereas many crypto trade heavyweights have praised the app for bringing 1000’s of individuals on-chain and galvanizing sign-ups from even non-crypto figures — resembling gaming YouTuber Faze Banks and Russian protest group Pussy Riot — some have warned it is vulnerable to burning out.

Constructed on Coinbase’s layer-2 community Base, good friend.tech is a platform that enables customers to buy shares of their associates and influencers, which in flip grants them entry to a personal chat with that person.

Chatting with Cointelegraph, crypto commentator Yazan identified quite a few troubling elements that led him to consider the app has between six and eight weeks earlier than each share costs and basic exercise start to nosedive.

Let me let you know one factor.

One thing isn’t proper about @friendtech.

Creators earning profits from a bunch chat that doesn’t even work when you may’t even reply on to folks?

The best way pricing works is ridiculous and might be simply taken benefit of.

Pumps and dumps. pic.twitter.com/TJqcktEM6P

— Yazan (@YazanXBT) August 20, 2023

Yazan argued there was an unsustainable price at which share costs have elevated.

“The fucked up market making that ensures that the app makes probably the most cash together with creators — the worth goes up too quick,” he mentioned.

“How come there’s 100 holders and the worth is 1 ETH — 1 ETH to have the ability to see a personal chat?”

Based on pseudonymous software program engineer Cygaar in an Aug. 20 X thread, the worth of somebody’s shares  on good friend.tech is proportional to the sq. of the excellent provide. As the availability will increase, the worth will increase exponentially.

It seems to be daunting, so let’s simplify it. Let’s assume that you just solely need to purchase/promote a single share (quantity = 1). That is often known as the spot worth.

Utilizing our center faculty algebra abilities, we will develop out the perform and we’ll get:

worth = provide^2 / 16000

— cygaar (@0xCygaar) August 19, 2023

Drawing parallels to BitClout — a predecessor DeSo app from 2021 — pseudonymous Web3 marketer Legendary shared his bearish prediction on the longevity of Buddy.tech.

“Completely not. I feel the platform will collapse as BitClout did. We’re in a bear market, and there is nothing to do. Everybody jumps on a possibility to generate income, however I feel the platform will probably be completed inside the subsequent weeks to months,” he wrote.

The bull case for good friend.tech

Others nevertheless, shared a much more optimistic outlook on the brand new decentralized social media platform, praising it for its novel developments in UX for crypto functions — one thing that crypto app builders have long struggled to get right.

David Phelps, cofounder of Jokerace and EcoDAO, described Buddy.tech’s UX because the “biggest crypto has seen,” pointing to a few primary elements as to why the app was such a big breakthrough for crypto.

Firstly, the app doesn’t require customers to obtain through an app retailer account, which factors extra strongly to the concept of decentralization. Secondly, it bridges the funds to the app routinely, decreasing the necessity for convoluted transactions.

Lastly, the app permits customers to deposit their ETH as soon as after which purchase and promote shares with out ever having to signal a transaction once more. The fixed must confirm transactions through Metamask signatures has been a major criticism of many DApps within the crypto area.

Associated: Friend.tech generates over $1M fees in 24h, surpassing Uniswap, Bitcoin networks

Whatever the various predictions in regards to the app’s future success or failure, there’s no denying that it has taken crypto by storm.

On Aug. 19, Friendtech introduced that it had obtained seed spherical funding from crypto enterprise capital agency Paradigm, sparking a wave of speculation over a future airdrop and potential token launch.

Earlier this yr, we partnered with @paradigm to construct instruments for brand spanking new on-line social interactions.

We’re grateful for the group’s heat reception and excited to proceed rising with you all pic.twitter.com/yINDMXkpuZ

— good friend.tech (@friendtech) August 18, 2023

Based on data from DefiLlama, Buddy.tech has generated $1.42 million in charges within the final 24 hours, and $4.2 million since its public launch.

On the time of publication, the whole income for the challenge stands at $1.88 million, and has witnessed over 724,000 transactions from greater than 64,500 distinctive merchants.

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