Scribbler Logo

    You have 4 summaries left

    Bankless

    Is friend.tech Good or Evil?

    Thu Aug 24 2023
    ICONFTFriend.TechFinancializationCryptoTokenizationMarket MaximalismInclusivity

    Description

    The episode discusses the presence of ICOs and NFT mints in the market cycle for financial assets. It explores the Friend.Tech application, a social financialization game built on layer two base. The conversation revolves around the implications of Friend.Tech as a financialized social application and its potential to go mainstream. The mechanism design of Friend Tech is analyzed, along with criticisms and concerns about financialization in crypto. The chapter also delves into tokenization, market maximalism, positive impacts of crypto, and the importance of inclusivity and mainstream adoption.

    Insights

    Friend.Tech's Potential Impact

    Friend.Tech has gained significant usage and revenue, attracting notable individuals from various corners of the internet. It has the potential to transition from a crypto native toy to a mainstream platform.

    Criticism of Financialization in Crypto

    Some people view financializing social relationships as contemptible, while others believe it goes against the principles of decentralization. The mechanism design of Friend Tech is criticized for its imbalance and rapid rewards.

    Tokenization and Market Maximalism

    Tokenization provides new opportunities for creators to monetize and build communities. Market maximalism in crypto is seen as a phase that will lead to overall improvement once the financialization cycle is complete.

    Positive Impacts and Balance in Crypto

    Crypto has created positive impacts like helping communities access open internet native banking systems. Maintaining a balance between discussing applications and values is crucial for the industry.

    Inclusivity and Mainstream Adoption

    Crypto needs to remain inclusive and open to mainstream adoption to avoid being relegated to a niche. Authorities may face difficulties regulating certain crypto assets.

    Chapters

    1. Introduction
    2. Friend.Tech: A Social Financialization Game
    3. Significant Usage and Potential of Friend.Tech
    4. Criticism and Mechanism Design of Friend.Tech
    5. Tokenization and Market Maximalism in Crypto
    6. Positive Impacts and Balance in Crypto
    7. Inclusivity and Mainstream Adoption of Crypto
    Summary
    Transcript

    Introduction

    00:00 - 06:22

    • ICOs and NFT mints exist in the market cycle for financial assets
    • Traditional equity IPOs are not available to the general public until after early VC speculation and financing rounds
    • Friend.Tech has dominated the crypto landscape for the last two weeks and is breaking out into mainstream audiences
    • The conversation revolves around whether Friend.Tech is good or bad and its consequences as a financialized social application
    • There are concerns about the values embedded in Friend.Tech and whether it represents the crypto dream or just another form of financialization
    • The episode aims to unpack these nuances and explore what really matters in the crypto industry
    • A Twitter poll showed that 53% considered Friend.Tech good for crypto, while 47% considered it bad

    Friend.Tech: A Social Financialization Game

    06:06 - 12:41

    • Friend.Tech is a proof of concept application on the layer two base
    • The term 'Ponzi game' refers to the idea that constant inflow of new believers is necessary for the success of Friend.Tech
    • Everything in the world of money and finance can be seen as a story or a Ponzi game
    • Friend.Tech allows users to buy and sell shares of themselves or their friends using their Twitter social graph
    • Each user has their own room on Friend.Tech where they can chat with anyone who owns some of their keys (shares)
    • The price of shares on Friend.Tech is determined by a bonding curve, and shareholders can burn their shares at any time to receive the current price from the bonding curve
    • There is a 10% tax charged when buying or selling shares on Friend.Tech, with half going to the creators of Friend.Tech and half going to the seller
    • Creators/influencers on Friend.Tech earn trading fees whenever someone buys or sells their shares
    • Accessing rooms on Friend.Tech costs money, creating a different dynamic compared to free access on platforms like Twitter
    • Friend.Tech operates on DeFi Rails, utilizing smart contracts and offering composability with other DeFi applications

    Significant Usage and Potential of Friend.Tech

    12:16 - 19:02

    • Friend Tech has seen significant usage, with 110,000 unique addresses connecting to the platform in just two weeks
    • The application has generated $38 million in trading volume, resulting in almost $2 million in revenue for both the team and creators
    • Notable individuals from various corners of the internet have started using Friend Tech, such as YouTubers, OnlyFans creators, and NBA players
    • There is potential for Friend Tech to transition from a crypto native toy to a mainstream platform similar to what happened with NFTs
    • Bankless supports this experiment as it brings more people into DeFi and increases usage on layer 2 solutions
    • Some members of the crypto community are resistant to Friend Tech and believe it goes against the principles of decentralization and positive change through crypto

    Criticism and Mechanism Design of Friend.Tech

    18:35 - 25:12

    • Some people view financializing social relationships as a contemptible concept worthy only of mockery
    • Crypto becoming a gambling, greed-inspired Ponzi scheme is a concern for many
    • Crypto should be about building things that help the world and drive utility to real people
    • Standards in crypto may be lower due to seeking validation from mainstream society
    • FriendTech was accepted quickly as proof that crypto can go mainstream, despite its flaws
    • Influencers benefiting from financialization is not new, but adding it to Web3 raises questions
    • There are opposing views on whether FriendTech is good or bad
    • The mechanism design of Friend Tech is being criticized for its imbalance and rapid rewards for those with existing social capital and financial resources
    • However, Friend Tech is built on top of the OP stack, which allocates a portion of trading revenue to retroactive public goods funding
    • The optimism vision aims to turn degeneracy into regeneracy by funding public goods through transaction fees on the superchain

    Tokenization and Market Maximalism in Crypto

    24:55 - 31:39

    • Tokenization provides a new way for creators to monetize and build communities
    • More private keys in hands can be seen as a positive outcome
    • Facebook has previously robbed content creators of the opportunity to financialize themselves, but this restores power to creators
    • The current take rate of 5% may decrease over time as competition arises
    • FriendTech can be rebuilt without the fees using tools like Uniswap, ERC-20 tokens, Collab Land, and Telegram Rooms
    • The current state of things is not where equilibrium will end up
    • The bull market for crypto is driven by the expansion of markets and market maximalism
    • More markets imply fairness and decentralization
    • In the early stages, speculation and financialization dominate, but over time, markets mature and utility becomes the focus
    • Some people are uncomfortable with the speculative phase of markets
    • Speculation exists in traditional finance as well, but it's not visible to the public until IPOs happen
    • Market maximalism in crypto will lead to overall improvement once the financialization cycle is complete

    Positive Impacts and Balance in Crypto

    31:13 - 37:37

    • Crypto market maximalism is inherent in the industry
    • The net good of free markets and digital property ownership outweighs the negative experiments
    • Crypto has created positive impacts like helping communities access open internet native banking systems
    • The arrest of developers behind Tornado Cash by the United States is seen as a bigger threat to humanity than anything crypto-related
    • Conversations about crypto allow for the immune system of the industry to raise concerns and push for more balance and legitimacy
    • The nihilism in crypto is counterproductive to the values and goals of many participants
    • Maintaining a balance between discussing applications and values in the crypto sphere is important
    • Preserving a big tent approach across crypto is crucial, regardless of personal preferences

    Inclusivity and Mainstream Adoption of Crypto

    37:19 - 44:20

    • Crypto needs to remain inclusive and open to mainstream adoption
    • The biggest threat to crypto is remaining a niche community
    • Onboarding the world is the best defense against crypto being relegated to a niche
    • Even if you don't like certain applications, be open to ways that normies will use them
    • A sleeping dragon protest maneuver involves chaining oneself together in a way that makes it difficult for authorities to arrest everyone
    • Tokenizing securities can make it challenging for authorities to take action against influencers
    • The SEC may face difficulties regulating NFTs and other crypto assets
    • Crypto investments come with risks and disclosures
    1