The emergence of SocialFi platforms like friend.tech and fantasy.top marked an exciting phase in the crypto space, promising innovative ways for users to interact and engage. However, as the initial hype surrounding these platforms subsides, questions arise about their long-term viability and sustainability. With declining user activity and revenue generation, the challenges faced by these speculative SocialFi applications underscore the evolving dynamics within the decentralized finance (DeFi) sector. As investors reevaluate their strategies, the focus shifts towards decentralized social platforms with proven utility, potentially reshaping the landscape of the crypto market.
Friend.tech
The first major wave of SocialFi excitement this cycle was captured by friend.tech, a crypto-enabled private chat room on the Base Layer 2. By offering users a clear pathway to qualify for a future airdrop through one of the earliest implementations of a points program and directly incentivizing influencers to shill the platform via a 5% token swap fee paid out in ETH, friend.tech succeeded in fostering impressive amounts of initial adoption.
Unfortunately, the platform’s hype peaked in mid-September. Many metrics never re-obtained their highs from this period and not even the arrival of its FRIEND airdrop or V2 refresh could revive any semblance of momentum. Daily active users have approached the lower bound, and on Monday, friend.tech recorded a meager 611 transactions, the lowest on record and a far cry from its 540k daily transaction all-time high.
Fantasy.top
In late April, the Blast-native crypto influencer trading card game “fantasy.top” came to prominence in the Crypto Twitter lexicon after its mainnet launched into widespread acclaim from influencers who had cards on the platform. Similar to friend.tech, fantasy.top directly incentivizes its influencers to promote the platform, offering them a 3% fee take on all individual card sales and 10% of the revenue generated from initial card pack sales.
Although alignment between fantasy.top and its influencers resulted in public support that caused users to FOMO in, as demonstrated with friend.tech, it can be difficult to sustain this momentum over the longer term as activity wanes. Daily active users peaked on the first day of fantasy.top’s mainnet launch and has only trended downward since, causing the platform to produce little more than a couple of ETH in revenue during the past week and drastically reducing the payouts it can award to influencers.
SocialFi
Ironically, while activity has almost entirely dissipated for the more speculative variety of SocialFi applications, usage metrics for decentralized social platforms for Farcaster and Lens have been gaining traction in recent months. Crypto natives have demonstrated a clear demand for crypto-enabled social applications and the benefits they provide, such as easy access to on-chain interactions and robust censorship resistance.
Financialized social applications have struggled to achieve the sustainable revenues required to yield long-term adoption; in the absence of this factor, each concept has faced declining usage and falling asset prices, driving users to abandon these platforms increasingly. While the continued adoption of Farcaster and Lens assets lends credence to the possibility crypto could receive a sustainable variation of a more gamified concept, the immense struggles endured by early applications indicate that this will be a difficult balance to achieve.
Impact on Market and Asset Prices
Market Implications
The decline in usage and activity within SocialFi platforms like friend.tech and fantasy.top reflects waning investor enthusiasm and confidence in speculative SocialFi applications. This downturn could lead to a broader reevaluation of the viability of financialized social applications, prompting investors to seek more sustainable and reliable investment opportunities within the decentralized finance (DeFi) sector. As a result, there may be a shift in market sentiment towards decentralized social platforms with proven utility and adoption, potentially influencing investment strategies and allocation within the crypto market.
Asset Price Implications
The faltering performance of friend.tech and fantasy.top, characterized by declining user engagement and revenue generation, may negatively impact the prices of associated tokens and assets. Investors may become more cautious about investing in projects heavily reliant on speculative hype and influencer promotion, leading to a decrease in demand for tokens associated with SocialFi platforms experiencing declining activity. Conversely, assets tied to decentralized social platforms like Farcaster and Lens, showing signs of increasing traction and adoption, may experience renewed interest and potential price appreciation as investors seek more sustainable investment opportunities in the crypto market.
Conclusion
The rise and fall of friend.tech and fantasy.top highlight the challenges faced by speculative SocialFi applications in sustaining long-term momentum. As investor confidence wanes in such platforms, there’s a growing emphasis on seeking more stable and reliable investment options within the DeFi sector. This shift in market sentiment may lead to a reevaluation of decentralized social platforms, with assets like Farcaster and Lens gaining traction due to their proven utility and adoption. Moving forward, the crypto market could witness a recalibration of investment strategies as investors prioritize sustainability and utility in their portfolios.
Official Website:
Website: https://www.bitrue.com/
Sign Up: https://www.bitrue.com/user/register
Disclaimer: The views expressed belong exclusively to the author and do not reflect the views of this platform. This platform and its affiliates disclaim any responsibility for the accuracy or suitability of the information provided. It is for informational purposes only and not intended as financial or investment advice.