Friend Tech’s V2 launch + airdrop could spark a wider SocialFi craze.
You still have a chance to get involved early.
🧵: My comprehensive guide to SocialFi (plus my top picks). 👇
In this post, I will cover:
• What is SocialFi?
• Friend Tech V2 and Airdrop
• Why SocialFi could be a strong trading opportunity in the coming months
• Specific SocialFi projects I’m eyeing (best affiliate investments)
Let’s dive in. 👇
First of all, what is SocialFi?
Social Finance, or SocialFi, combines the principles of social media with decentralized finance.
In short, it incentivizes social media engagement through crypto tokens.
According to Galaxy Research, SocialFi has attracted more than 8.7 million users, with approximately 550,000 active users, and has processed 82 million transactions across platforms such as Ethereum, Optimism, and BSC.
SocialFi offers many interesting advantages over other forms of media, including:
• Decentralized (censorship-resistant)
• Built-in monetization model through token incentives
This gives users true ownership and control over their social data/the revenue generated from that data.
However, to date, there have been many “failed” (or unsatisfactory) experiments in pursuing this vision.
Let’s explore some of them.
• @Bitclout
BitClout is a social Fi platform that became popular in 2021.
BitClout allows users to monetize their profiles using “Creator Coins” that represent the creator’s journey.
Users can buy, sell and trade these tokens.
BitClout attracted some major initial heat, raising $200M from 14 VCs, including @a16z.
However, they made some costly mistakes that led to the failure of the platform.
1. BitClout created profiles/tokens for its celebrity users without their consent.
2. Early versions of the platform did not allow users to withdraw their funds.
3. Investors’ funds are “locked” on the platform, which has raised some concerns.
• @joinmastodon
Mastodon aims to be the largest decentralized social media network with microblogging features similar to Twitter.
However, their user experience failed to deliver on that promise.
Mastodon has the following problems:
• Complex registration process (high barrier to entry)
• Unattractive incentives (no rewards to the community)
• Features and upgrades are released slowly (become obsolete quickly)
Therefore, it can be seen that the key reasons why SocialFi did not succeed were incentive misalignment and poor user experience.
Furthermore, the base layer, the blockchain, does not have sufficient performance to support the thousands of TPS required by social media.
However, since 2021, evolving technological and social dynamics have changed the landscape.
The SocialFi platform can now leverage:
• Second layer solutions like @Optimism or @base to achieve high TPS
• Low latency servers for real-time interaction
• Excellent UI/UX similar to Web2 counterparts
Until now, no one has really perfected this model.
However, it is clear that the demand/interest is there.
The first product to perfect this model has serious upside.
Let’s take a look at some of the major players in this space. 👇
• @farcaster_xyz
Farcaster is the first breakout SocialFi protocol with over 300,000 total users and 50,000 daily active users.
Farcaster's UI is similar to X, and the user experience is smooth.
Many of the leading minds in crypto (and newcomers) are active on @warpcast_ and have multiple ways to monetize their content.
For example, they can be rewarded in $DEGEN, a token used by the community for tipping.
I think Farcaster’s most interesting proxy investment ($DEGEN) has also benefited from the recent interest in the Base ecosystem.
I’ll summarize my favorite SocialFi agency investments later in the post.
Merkle Manufactory, creator of Farcaster, recently broke through a $10 billion valuation, becoming a unicorn.
All of this shows growing investor confidence in the Farcaster platform and SocialFi in general.
Even @VitalikButerin had some interesting insights on Farcaster, despite the challenges.
• @friendtech
Friend Tech is a social media dApp that allows users to tokenize their friends.
This means you can buy and sell shares of your friends' social media profiles.
Friend Tech on its brief but explosive rise:
• Increased its user base 416 times in 3 months
• Generated over $27 million in revenue
It is promised that 100% of the on-chain points community airdrop will be distributed in a few days.
Ansem believes that once Friend Tech V2 is launched, SocialFi will operate like memecoin.
Let me summarize the best SocialFi agents to invest in.
• $FRIEND > Pre-market trading on @HyperliquidX, launching in a few days
• $DEGEN > Base's SocialFi/Farcaster proxy
• $DESO > SocialFi L1
You can also learn more about the SocialFi ecosystem on CoinGecko.
I am actively watching for new tokens/investment opportunities in this space.
As @blknoiz06 suggests, the best way to ride the SocialFi wave isn't always obvious.
But it’s important to understand it and stay tuned so you can act when opportunities arise.
Also remember that you can benefit from SocialFi not only as a speculator, but also as a participant.
• Trade on these platforms
• Airdrop Farm
• Engage/build community
We are still very early in our narrative on SocialFi.
Over the next year or so, this space will see significant changes, with many new projects emerging (and some disappearing).
But it's definitely an area to watch, especially as some near-term catalysts emerge.