A new Web3 social media app that allows users to “buy and sell shares of their friends” has been deployed on the Coinbase-incubated (COIN) Base blockchain.
On this week’s episode of Yahoo Finance UK’s The Crypto Mile, Tom Duff Gordon, Vice President of International Policy at Coinbase, described this new decentralized application called FriendTech and how it is powering trading on Coinbase’s new Layer 2 blockchain.
“One of the decentralized apps on the Base blockchain that has really taken off is this social media application called FriendTech. It allows users to buy shares of their friends and then trade them,” Gordon said.
Read more: US crypto raid “an opportunity for Britain”
FriendTech is a new way to engage in a social network, he said. “There are currently hundreds of thousands of active users on FriendTech, and that’s very exciting.”
The FriendTech web3 social media network
Shares in “Friends” are bought and sold on the platform using Ether (ETH-USD), the native cryptocurrency of the Ethereum network.
Everyone on FriendTech has their own channel, and to access content on someone else’s channel, users must purchase a share or key of that channel. When a key is bought or sold, a 5% fee goes to the app and a 5% fee goes to the channel owner. The prices of these shares rise and fall depending on the person’s popularity.
Read more: Crypto Live Prices
The new app, billed as a “marketplace for your friends”, saw more than $35 million (£28.7 million) in shares bought less than a week after its launch in August. Within a month of its launch, the social media app had over 110,000 new unique addresses.
FriendTech activity is declining
However, trading in tokenized representations of people and monetizing popularity does not meet with criticism.
Web3 influencer Beanie has featured FriendTech in numerous Posts on X.com. “Every few years in the crypto world, someone reintroduces an elaborate Ponzi scheme with a bonding curve,” he said. “And there’s always a group of influencers raving about it being ‘the new paradigm.'”
Over the past few months, the number of visitors to the Web3 platform has declined. According to data from Dune Analytics, activity on the app has dropped 95% from a peak of nearly 39,000 daily transactions on August 21. On-chain data shows that activity on the app across multiple metrics peaked in mid-September and then dropped sharply.
Financial apps on Base
Gordon also discussed other applications being deployed on Coinbase’s new Base blockchain, including a tokenized exchange-traded fund (ETF) for U.S. bonds.
“This tokenized US bond ETF is now hosted on Base, allowing users to invest in US bonds through a BlackRock ETF (BLK), but in a tokenized format. With current interest rates, this is an attractive product,” he said.
Gordon added that tokenizing financial products on a blockchain will lower the barrier to entry for investors wanting to participate in the markets.
“Currently, access to funds is quite difficult. Often these funds require a minimum amount to gain access. And exiting these funds can be quite complicated and you have to pay intermediaries to provide access,” he added.
Read more: Crypto bosses invest millions in anti-aging technology for a longer life
He explained that breaking tokenized financial products into smaller units would allow individuals with less money to participate in them. “This democratizes these funds and can improve liquidity and improve pricing over time,” he said.
What is Coinbase’s Base blockchain?
Coinbase launched its Base Layer 2 blockchain in August.
It is called a Layer 2 blockchain because it sits on top of the Ethereum network, which in turn is a Layer 1 network. The Ethereum network acts as a highly secure base layer for all transactions on Base. Layer 2 transactions are faster and cheaper because they are executed on a separate side network and then bundled together to be transferred back to the underlying Ethereum chain at a later date.
The goal of the Base blockchain is to make the execution of decentralized applications on Ethereum more efficient.
Coinbase generates revenue from transaction fees charged to users who exchange cryptocurrencies on its trading platform. In addition, it generates revenue from subscriptions and services, custody fees, and blockchain rewards. The addition of the Base blockchain could also allow Coinbase to tap into a new revenue stream from applications built on top of it.
Watch: US crypto crackdown ‘an opportunity for Britain’ | The Crypto Mile
Download the Yahoo Finance app, available for Apple And Android.
