What is Friend.tech? The Social-Token Driven Decentralized Social Network

Within the first weeks following the invite-only launch of its beta model, a quickly rising userbase for crypto platform Pal.tech has some enthusiastic supporters hailing it as the primary actual success story within the social crypto house. In simply two weeks, the platform reportedly gained greater than 100,000 customers and made about $25 million.

Social token-driven platforms permit customers—together with people in addition to manufacturers and companies—to create and monetize on-line communities utilizing blockchain know-how. Supporters view social tokens as a possible key driver of Web3 adoption and an essential method to convey newbies to the cryptocurrency world into the fold. Briefly, social tokens mix facets of conventional cryptocurrencies with patronage techniques, permitting influencers, creators, and others to monetize a fan base in trade for unique presents and content material.

Within the early phases of its beta launch, Pal.tech already has potential customers looking excessive and low for invite codes. However what is that this new social crypto platform and the way does it work?

Fundamentals of Pal.tech

Pal.tech is a decentralized social community. Customers should buy and promote “keys”—beforehand referred to as “shares”—which are linked to Twitter (now X) accounts. These keys provide entry to non-public in-app chatrooms and unique content material from that X consumer. The platform markets itself as “{the marketplace} in your mates.”

Every consumer on the app has a chat group akin to ones discovered on platforms like Telegram. The catch is that customers should buy keys with the intention to enter different customers’ non-public chats. They will later select to promote these keys in the event that they resolve to go away the chat.

On this approach, Pal.tech could be seen as a social media platform—or, maybe extra particularly, a kind of offshoot of X. In style Twitter customers have beforehand discovered success (and typically authorized bother) through the use of the platform to promote tokens that they themselves launched or which they’ve been paid to advertise. Generally these customers would incentivize the sale of those tokens by linking them to unique content material.

Pal.tech takes this pre-existing facet of Twitter and fleshes it out with a set of standardized crypto platform options, together with airdropped rewards, payment sharing, and extra. Like many different latest social media platforms, it requires that customers have an invitation code with the intention to be part of. This has helped to contribute to a extremely aggressive panorama by which keen would-be adopters seek for codes, serving to to advertise the platform within the course of. Customers trying to get onto Pal.tech ought to entry the positioning of the identical title from a telephone browser, which can permit them so as to add the app to their telephone. Every member of the platform presently is supplied with three invite codes to offer out. As soon as within the app, a brand new consumer hyperlinks their Google and X accounts and bridges ether from Arbitrum to the bottom pockets handle. At this level, they’re prepared to start shopping for and promoting keys and collaborating in non-public chats.

Pal.tech is a browser-based utility launched on the Base community, an Ethereum scaling community supplied by crypto trade Coinbase.

Speedy Development

Pal.tech will not be the primary social token platform to obtain widespread consideration. Late in 2022, a platform known as Roll tried one thing related, aiming to offer customers the on-chain capability to allow subscriber tiers like the favored Web2 website Patreon.

However Pal.tech’s development has eclipsed different social token techniques. Two weeks after its launch, Pal.tech earned a reported $1 million in charges, equal to five% of the worth of every transaction, in a single 24-hour interval. That interprets to greater than $700,000 in ether income after accounting for fuel charges and different prices in only a day.

And Pal.tech has already made a few of its high earners a hefty sum in a equally brief time. Esports influencers specifically have quickly risen via the ranks to develop into a few of the high passive earners, gaining tens of 1000’s of {dollars} every in a matter of days. Particular person customers make charges every time keys to their non-public chats are purchased or offered.

An added incentive for contributors within the Pal.tech ecosystem is that customers labeled as “creators” (versus “followers”) see key costs enhance as their networks develop bigger. This clearly advantages creators by offering them extra rewards within the type of charges. But it surely additionally advantages their followers in the event that they select to promote their keys, assuming they’ve appreciated in worth because the time they first bought them. The worth of keys is decided primarily based on the idea of a bonding curve.

Potential Issues

There are a variety of the explanation why others within the crypto neighborhood could method Pal.tech with warning. For one, as with all comparatively new crypto platform, the potential for manipulation of varied varieties might be excessive. Customers ought to watch out for alternatives that appear too good to be true.

One other facet of Pal.tech that will give some potential customers pause is the truth that it was rebranded and reworked only a few months earlier than the beta launch. Beforehand, the platform was referred to as Stealcam, a system permitting customers to promote selfies and different photos utilizing a “steal to disclose” mechanism.

For the pseudonymous founders of Pal.tech, the larger concern is sustainability. Certainly, a co-founder referred to as Racer advised Decrypt that the preliminary launch was meant for load testing solely, and the truth that the platform went viral got here as a shock. There was a mad sprint to attempt to scale the platform’s infrastructure and repair points as they arrive up over the past two weeks.

Nonetheless others have likened the fast-growing platform to a Ponzi scheme, pointing to the truth that for those who purchase (and different folks additionally purchase) into a specific consumer’s keys, the worth of these keys goes up. By linking appreciation in worth of keys so immediately and completely to the variety of folks investing in these keys, the pondering goes, finally your entire system will come crashing down, resulting in a rush to promote keys. Others have recommended the platform may fail as a result of it lacks a compelling purpose for customers to stay round over the long run.