Funders see the novel social media network as emblematic of an abundance of opportunity in crypto and DeFi amid infrastructure gaps and increased integration with real-world assets
Token-driven decentralized social network Friend.tech may have been losing momentum recently, but it has pulled a handbrake U-turn since last week to more than treble its total value locked, confounding critics who were preparing to administer it the last rites.
High-profile cryptocurrency industry investors’ prominent mentions of the novel social media network at this year’s Token2049 Web3 conference in Singapore are also likely to have surprised many. Brushing aside skepticism, several panel guests singled out Friend.tech as an example of innovation beckoning towards a potentially bright future for crypto.
Paul Veradittakit, a managing partner at Pantera Capital, said Friend.tech had succeeded in bringing new users into Web3 not by appealing to any particular curiosity they had about digital assets, but through purely incorporating crypto into the appeal of a new social media model.
“Friend.tech has done a pretty good job of getting an early adopter movement,” he said. “Being able to obfuscate the crypto component has been an easy way to get [people] onboarded to be able to experience crypto with not much crypto at the forefront.”
Alex Pack, a co-founder and managing partner at Hack.VC, praised Friend.tech for having bypassed the Apple Store and its policies on crypto, which he described as “very onerous.”
Creator economy boost
He said the platform offered new opportunities for users looking to monetize content, comparing its model favorably to those of Web2 social media networks, which he said had wielded excessive power over users.
“The concept of like crypto social is really fascinating,” he said. “Facebook and Twitter were Trojan horses. They came in and created networks for people to talk to each other, and eventually for followers to interact with leaders and creators, and then in a sneaky way they completely intermediated the way that fans interact with leaders and creators, and they did everything that they could to make it hard for [them] to understand who [their] followers are, and how to monetize them directly.
“This was great for social media companies, because then they could control the whole thing, and they could disempower the legion of fans. The opportunity for Friend.tech and DeSo (Decentralized Social) … is that [they] could unbundle this and create a whole monetization layer to the creator economy.”
Veradittakit said there was great potential for social media to be disrupted, but Joey Krug, a partner at Founders Fund, said more work would be required.
“In terms of social and crypto more broadly, the main the main thing that’s needed for it to really take off is some kind of big zero-to-one difference versus the existing social media platforms,” he said. “I’m not sure anybody’s really quite delivered on that yet.”
Pack said that more Web3 infrastructure would be required for such platforms to realize their potential.
“There’s a lot that needs to be built, all of the infrastructure, like token gated communities, putting in cash flows and royalties and true economics,” he said.
