Token-driven decentralized social community Good friend.tech could have been dropping momentum not too long ago, but it surely has pulled a handbrake U-turn since final week to greater than treble its whole worth locked, confounding critics who had been getting ready to manage it the final rites.
Excessive-profile cryptocurrency business traders’ outstanding mentions of the novel social media community at this yr’s Token2049 Web3 convention in Singapore are additionally prone to have stunned many. Brushing apart skepticism, a number of panel friends singled out Good friend.tech for instance of innovation beckoning in the direction of a doubtlessly brilliant future for crypto.
Paul Veradittakit, a managing companion at Pantera Capital, mentioned Good friend.tech had succeeded in bringing new customers into Web3 not by interesting to any specific curiosity they’d about digital belongings, however by means of purely incorporating crypto into the attraction of a brand new social media mannequin.
“Good friend.tech has achieved a reasonably good job of getting an early adopter motion,” he mentioned. “With the ability to obfuscate the crypto part has been a straightforward approach to get [people] onboarded to have the ability to expertise crypto with not a lot crypto on the forefront.”
Alex Pack, a co-founder and managing companion at Hack.VC, praised Good friend.tech for having bypassed the Apple Retailer and its insurance policies on crypto, which he described as “very onerous.”
Creator economic system increase
He mentioned the platform supplied new alternatives for customers seeking to monetize content material, evaluating its mannequin favorably to these of Web2 social media networks, which he mentioned had wielded extreme energy over customers.
“The idea of like crypto social is actually fascinating,” he mentioned. “Fb and Twitter had been Trojan horses. They got here in and created networks for individuals to speak to one another, and finally for followers to work together with leaders and creators, after which in a sneaky method they fully intermediated the way in which that followers work together with leaders and creators, they usually did all the pieces that they may to make it laborious for [them] to grasp who [their] followers are, and easy methods to monetize them instantly.
“This was nice for social media firms, as a result of then they may management the entire thing, they usually may disempower the legion of followers. The chance for Good friend.tech and DeSo (Decentralized Social) … is that [they] may unbundle this and create an entire monetization layer to the creator economic system.”
Veradittakit mentioned there was nice potential for social media to be disrupted, however Joey Krug, a companion at Founders Fund, mentioned extra work could be required.
“By way of social and crypto extra broadly, the principle the principle factor that’s wanted for it to actually take off is a few form of massive zero-to-one distinction versus the present social media platforms,” he mentioned. “I’m unsure anyone’s actually fairly delivered on that but.”
Pack mentioned that extra Web3 infrastructure could be required for such platforms to comprehend their potential.
“There’s loads that must be constructed, the entire infrastructure, like token gated communities, placing in money flows and royalties and true economics,” he mentioned.
DeFi growth
Krug zeroed in on decentralized finance (DeFi) as part of the ecosystem that was in want of an infrastructure increase so as to develop to its full potential.
“The DeFi house, writ giant, feels prefer it’s in a trough of disillusionment proper now,” he mentioned. “But it surely’s an space we’re very enthusiastic about basically long run and we’re undoubtedly seeking to make investments extra there, as effectively.”
Maybe probably the most essential downside dealing with DeFi is just the dearth of instruments that non-crypto native individuals can use, with even the fundamentals of staking, lending and yield farming needing to be demystified so as to acquire extra customers and traction total.
Min Teo, a managing companion at Ethereal Ventures, mentioned DeFi builders would possibly contemplate seeking to TradFi for steering on bettering the ecosystem.
“There’s a little bit of an id disaster between totally different merchandise and protocols for the time being,” she mentioned. “Have a look at the present monetary system – you’ve people who find themselves constructing B2B merchandise for banks, after which asset managers who’re then distributing to retail. In crypto and DeFi, all the pieces has simply collapsed into one, so I bifurcate the 2 after I give it some thought. And as we mature in DeFi innovation, I feel there is likely to be a powerful probability that we began wanting extra like how TradFi works.”
“There are a number of core primitives that also should be constructed to make the expertise quicker, enhance latency, and simply make it extra much like what customers are accustomed to,” she mentioned. “In any other case, from an adoption perspective, it’s difficult to see how we’ll get extra customers on chain.”
“There are simply not sufficient individuals constructing apps,” Krug mentioned. “The infrastructure is at some extent the place … you can construct one thing that’s actually zero to at least one and folks go, ‘Wow!’ after they after they use your app. We didn’t assume that was attainable … six or seven years in the past, however I feel the tech stack at present is at some extent the place it’s truly possible.”
Pack mentioned stablecoins had been essential to constructing out the DeFi ecosystem and, as a illustration of real-world belongings, integrating DeFi into the broader structure of the finance system
“Stablecoins [are] the enabling factor behind DeFi, and probably the most promising, most enjoyable chart in crypto,” he mentioned. Referring to their uptake trajectory, he mentioned: “It’s nonetheless up and to the precise, and there’ll be extra real-world belongings, and that’ll feed into DeFi, and it’s a optimistic suggestions loop.”
“At the moment, you can consider DeFi as a loopy playground,” he mentioned. “It’s only a actually good jungle health club playground for crypto belongings … however there are only a few real-world belongings, so if we may prolong that and add extra real-world belongings – euros, T-bills, shares and stuff like that … that’s in all probability the largest factor versus, like, massive infrastructural leaps, however as soon as that occurs, I feel you may 10x or 100x it.”
Synthetic intelligence
Pack and Krug mentioned that one other increase for DeFi, and for crypto extra broadly, may come from synthetic intelligence, a fusion of applied sciences that has attracted appreciable consideration this yr.
“There’s an thrilling alternative for utilizing DeFi and an open, composable, clear monetary system,” Pack mentioned. “At the moment, you go to ChatGPT and it’s … an AI agent – it writes your essays for you and helps you cheat in your homework, however it may possibly’t do financial stuff. It may’t rebalance your portfolio, it may possibly’t pay your payments and it may possibly’t run what you are promoting for you. You’d need to combine [it] with a whole lot or hundreds of various cost processors. Or you can simply ‘one click on’ into DeFi and all the pieces’s open API.”
Krug mentioned: “The AI agent factor … is definitely an fascinating space, [and] the following wave of DeFi will intersect there loads. If you consider crypto, the way in which it really works is definitely a characteristic right here, not a bug. That’ll be a giant zero-to-one space. It’s in all probability on a couple of years’ horizon – three to 5 years versus subsequent yr.
“After which there’s an entire unexplored downside house that folks simply haven’t constructed any firms round but,” he mentioned. “A few of these are smaller they usually’re not zero to at least one, however one simple factor that I’m nonetheless shocked nobody’s constructed is a borrowing aggregator [in which] you deposit ETH and borrow, say, USDC and it constantly refinances you to get the very best fee. There’s nothing that does that, so there’s a number of issues to construct in DeFi.”
