Network defects. SocialFi applications have managed to garner widespread excitement among crypto natives at numerous points throughout the past year, but its buzziest brands seem to be fading into obscurity. Will crypto ever get a sustainable SocialFi application?
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.
friend tech DAU down to 177 users
— Cheryl Douglass (@cherdougie) June 4, 2024
still think hyper financialized social apps are it, anon? lolll pic.twitter.com/bRsl0iKyHG
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 have 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.
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 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 increasingly abandon these platforms.
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.