Is Friend.Tech A Rug?

Welcome back!

This is J264G and this week I’ve got these titbits for you:

• Friend.Tech: Ponzi or the future of decentralised social media?

• Smooth Operator: Phantom introduces Sign In With Solana (SIWS)

• Seamless Experiences: Ottr rolls out in-wallet apps

Let’s not muck around, you’re here for the friend.tech take — so let’s get into it!

Click on any underlined heading / hyperlink to learn more.

Spotlight

Friend.Tech

It seems as if friend.tech (FT) is all Crypto Twitter has been talking about recently.

Built on Coinbase’s L2 network Base, FT allows users to purchase shares of their friends and influencers, which in turn grants them access to a private chat of said friend or influencer.

As such, FT is not a new platform. It was built by @0xRacer / @0xRacerAlt and @shrimppepe, who also built TweetDAO and Stealcam. At its core, FT is basically Stealcam 2.0, which was discontinued after losing steam in April.

In this context, FT is also not the first decentralised social media platform or social token experiment — we've already seen BitClout, Rally, and Wumbo come and go.

As was the case with its predecessors, FT's entire premise is based on attracting a stream of speculative capital. Not more, not less.

That meta didn't last long, though.

After launching at the beginning of August, FT initially attracted thousands of users — only for the hype and user activity to take a nosedive a couple of days later.

So naturally, it was time to drop the Paradigm news: The VC firm announced that it invested in the platform at the beginning of the year.

Predictably, this once again led to a rapid influx of new users.

Why?

Simple. Based on past experiences with Blur, Paradigm will help FT copy & paste the same playbook: The more you use FT and the more volume you trade, the more points you get, and the more tokens you get airdropped to sell for cold, hard USDT/C.

The thing is, there might be some red flags.

1. Bubblenomics

FT is purely designed for Crypto Twitter. Designed by the bubble for the bubble. Therefore, the barriers to entry are high for normies — that is, if they can grasp that the platform doesn't offer any intrinsic value and are up for some rounds of musical chairs. Basically, FT is another prime example of us creating PvP gimmicks which are miles away from our apparent northern star: self custody for a more (financially) independent life — for everyone.

2. Speculation

@0xRacerAlt and @shrimppepe have designed FT to specifically drive a speculative frenzy powered by social tokens. This has more to do with an online casino than the next frontier of decentralised social media.

3. Influencers & Whales

The more shares are purchased and outstanding, the higher the share price — and vice versa. As is often the case in web3 / crypto, FT thus heavily favours whales and influencers. Due to their name and brand recognition, their shares are the most traded, allowing them to gain the largest allocation of protocol royalties / revenue. Additionally, this might be further propelled by pump and dump schemes which many are expecting to grace FT in the coming days and weeks.

4. Gary?

The higher the trading volume on FT, the more revenue the protocol and share creators are able to distribute among themselves. As might be expected, this might just incentivise share creators to talk favourably about their shares and their associated price action on Twitter/X — possibly bringing them into the crosshairs of the SEC.

5. Security & Transparency

FT's desktop website currently directs users to a responsive web app — bypassing both the App Store and Google Play Store. Even if you’re of the opinion that Apple’s strict app guidelines, reviews, and security in particular aren't necessary, there are still some issues:

(a) FT's website / app doesn't provide any information at all, not on the founders, the platform, zilch (anon founders are fine, no vetted background less so)

(b) FT requests read and write capabilities of your X profile (didn't we learn anything from $GREED?)

(c) Influencers and whales aren’t disclosing their FT ad partnerships (we’re going with the Rollbit model again — aren't we?)

6. Paradigm

Apart from one ambiguous tweet, no other details about Paradigm's investment are known. Charlie Noyes and Caitlin Pintavorn retweeted FT's post, but didn't share any further insights, nor did Paradigm on their X profile or website.

As such, rumour has it that FT's seed round / Series A is valued at $50M.

$50M — yet questions remain:

• Why has Paradigm funded FT?

• Why has only Paradigm taken part in the round?

• Can Paradigm confirm the $50M valuation?

• What is FT's USP compared to e.g. BitClout, Rally, and Wumbo?

• What is the size of the market opportunity?

• What does the non-hype / non-influencer growth plan look like?

• How will FT use the investment?

A
N
Y
W
A
Y

Whoever is having fun and making a bag on friend.tech — smash it!

Number Of The Week

News Bites

Big Bucks: Solana generates more fee revenue than competitors such as Polygon, Cardano, Polkadot, Fantom, and Near.

Smooth Operator: Phantom now allows apps to securely authenticate their users by means of their self-custody wallets.

Instant Unstaking: Sanctum accepts all staked SOL in exchange for native SOL. In turn, the stability protocol unstakes the LSTs to replenish its SOL reserves. Now, Sanctum fully integrated with Jupiter — allowing for instant unstaking out of any LST with near negligible basis points.

Seamless Experience: Ottr rolled out in-wallet apps. This means that users can now use Jupiter, Tensor, and more services directly in Ottr's mobile app — seamless experiences await!

Solana Gaming: Jupiter is now natively supported in the Solana.Unity-SDK, enabling developers to easily and swiftly integrate swaps in their games.

Caught In 4K

Weekly Take

Keks & Giggles

And that's a wrap!

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Talk soon!

J264G

_{DISCLAIMER
None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research. Lastly, please be advised that we discuss products and services from our partners from which our team members may hold tokens / equity.}