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Friend Tech, a decentralized social media platform where users can tokenize their social media profiles, has announced that it will replace shares with keys, which is the platform’s key feature.
Shares to Keys: Friend Tech’s New Feature
Regarding the changes made to the decentralized social media platform, Friend Tech stated, “Shares were a temporary placeholder during the original name development, and we believe that using keys as in-app items to unlock your friends’ chat rooms better reflects their purpose.”
Previously, Friend Tech had announced that it would allow users to purchase shares of personal accounts on X, formerly known as Twitter. When transactions are made through Friend.tech, two separate fees of 5% are charged. One of these fees goes to Friend.tech’s treasury, while the other is directed to the account owner included in the traded shares. Additionally, users can invest in accounts where the value of shares is increasing to make a profit. Friend Tech made a big impact in the cryptocurrency world amidst AirDrop news, surpassing giants like Bitcoin and Uniswap with daily transaction fees exceeding $1 million in the first days of its launch.
Many analysts believe that the model adopted by decentralized social media platforms resembles a cryptocurrency exchange. Similar to how shareholders of public companies can receive dividends, influencers also have the option to share their earnings with buyers. This is already an advantage that many influencers provide to increase their commercial activities and the value of shares.
A Precaution Against Potential SEC Review
Analysts argue that Friend Tech provides profit expectations to its shareholders. The decision to change shares to keys is considered a measure to avoid a potential review by the U.S. Securities and Exchange Commission (SEC). Mark Hiraide, a partner at Mitchell Silberberg & Knupp, stated the following in his evaluation to Blockworks:
There is obviously a benefit here, but calling them ‘shares’ is an indication that these are not just tickets of entry. Essentially, what they are selling is an expectation of capital gain in the shares; as more people join the platform and buy shares to access popular personalities, the value of shares will increase.
According to Hiraide, it will also be important to observe whether the shares will eventually be traded on a platform other than Friend.tech. Being listed on external exchanges could potentially complicate the distinction between these assets and traditional securities. Hiraide also added that the visible popularity and interest in Friend.tech could be enough for the SEC to intervene.
