SocialFi is the redesigned version of social media with Web3 technology. Users can register and log in to platforms with their Web3 wallets and generate substantial commission income through their followers.
The journey of this field started with the introduction of Lens Protocol in the summer of 2022. Users initially had the opportunity to join this protocol by completing social media tasks and earning free profile minting rights. Until September 2022, the Polygon-based protocol continued to offer free minting rights, limited to a total of 123,500 profiles. However, the real hype started after that. The protocol’s significant investments and the speculation about airdrops caused the price of minted profiles to rise to 0.10 ETH ($158).
However, the continuous wallet approval requirement for protocol transactions and the failure to implement updates in this regard created a major backlash. The elimination of the possibility of airdrops resulted in the end of the ongoing hype in this protocol, leading to a base price drop of Lens Protocol profiles to 0.01 ETH ($15).
Friend Tech, launched after the Base network launch, has gained the admiration of many investors compared to Lens Protocol. The ability to access the social media platform via mobile devices and the elimination of wallet approval for transactions received great appreciation. Additionally, the feature of users only needing to use their Web3 wallets for depositing or withdrawing assets from the Base network was another well-received aspect.
Friend Tech not only created an income source for influencers but also for users. The trade of Twitter profiles as a form of shares, allowing popular profiles to earn commission income, has led to the emergence of a significant market in “share” trading.
While the popularity of the Base network is partly due to Friend Tech, the protocol’s ability to satisfy its users with a 20% commission and the subsequent possibility of airdrops have resulted in a total locked value of $32 million within the protocol.
So, how can this hype come to an end? If the team delays the airdrop as in Lens Protocol, it could lead to the end of the hype. Additionally, the continuous release of new SocialFi platforms on different blockchain networks could lead to a constant decrease in market share and financial losses for the protocols.