FriendTech developers rake in nearly $20 million since August launch

The development team behind social protocol FriendTech has generated nearly $20 million in revenue in just a few months since going live.

Launched in August, FriendTech is a platform that allows users to link their Twitter accounts and facilitates the purchase or sale of influencer profile tokens (named “keys”) with ETH on the Coinbase-backed Layer 2 network, Base. These keys grant users privileged communication access to the influencers.

The project holds the lead as the largest revenue-generating app on Base and the second-largest in all of crypto, according to DeFiLlama data. At the current rate, it’s on track to generate an annualized revenue of $180 million.

The platform has so far generated nearly $40 million in overall fees from users. These fees are generated by taxing approximately 10% of the trading volume of social tokens. Half of this total fee is allocated to the project’s team as revenue, and the other half is distributed to users whose keys are traded.

Although several FriendTech clone apps have emerged, the project remains the top project in the overall SocialFi niche in terms of daily volume. However, the number of unique users has dropped significantly since late September, according to data from The Block.

Besides the $20 million in revenue, the pseudonymous FriendTech founder ‘0xRacer’ has raked in more than $440,000 from the platform separately, according to on-chain data aggregated on Dune.

FriendTech security woes

Amid the continued momentum in generating revenue, there have been some roadblocks. For instance, the platform recently encountered challenges around user security for which it has made improvement efforts. The project introduced an option for users to switch from phone numbers to emails following several incidents of SIM swap attacks on its users.

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On Oct. 3, two such SIM swap incidents were reported and lead to an alleged loss of 42 ETH (equivalent to $70,000). Yesterday, four FriendTech users were targeted, resulting in attackers securing gains of approximately $385,000.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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