A new web3 social networking app that lets users “buy and sell their friends’ stocks” has been set up on Coinbase incubated (COIN) Blockchain basis.
In this week’s episode of Yahoo Finance UK’s Crypto milesCoinbase’s VP of International Policy Tom Duff Gordon described this new decentralized app called FriendTech and how it powers trading on Coinbase’s new Layer 2 blockchain.
“One of the decentralized applications on top of the Base blockchain that has really taken off is this social networking app called FriendTech. It allows users to buy shares in their friends and then trade with them.” Gordon said.
FriendTech as a new way of dealing with the social network, he said. “There are currently hundreds of thousands of active users on FriendTech and this has been very exciting.”
Social Media Network FriendTech web3
Shares in “friends” are bought and sold on the platform using ether (ETH-USD), the original cryptocurrency of the Ethereum network.
Everyone on FriendTech has their own channel, and in order to access content on someone else’s channel, users must purchase a share or channel key for 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 stocks rise and fall in response to a person’s popularity.
Read more: Crypto prices live
The new app, hailed as a “marketplace for your friends”, topped more than $35m (£28.7m) in shares bought just over a week after launching in August. Within a month of its launch, the social networking app had more than 110,000 new unique addresses.
However, trading in tokenized representations of people and monetizing popularity is not without its critics.
Web3 influencer Beanie has criticized FriendTech on numerous occasions posts on X.com. “Every few years in cryptocurrency, someone reintroduces an elaborate ponzi scheme with a connection curve,” he said. “And there’s always some group of influencers who rave about it being the ‘new paradigm’.”
In recent months, the popularity of the web3 platform has failed. Activity on the app is down 95% from a peak of nearly 39,000 daily transactions on August 21, according to Dune Analytics Date. On-chain data shows that activity on the app, according to multiple metrics, peaked in mid-September and declined sharply thereafter.
Financial applications based
Gordon also talked about other applications being deployed on Coinbase’s new Base blockchain, including a tokenized US bond exchange-traded fund (ETF).
“This tokenized US bond ETF is now on Base, so users can gain exposure to US bonds through the BlackRock ETF (BLK), but through a tokenized format. At current rates, this is an attractive product,” he said.
Gordon added that the tokenization of financial products on the blockchain will lower the barrier to entry for investors who want to participate in the markets.
“Funds that are currently quite difficult to access often have a minimum amount of money you have to invest to gain access. And exiting these funds can be quite complicated including paying an intermediary to facilitate this access,” he added. .
He explained that fractionalizing tokenized financial products, breaking them into smaller units, would allow individuals with less money to be exposed to them. “This democratizes those funds and can improve liquidity and prices 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 is a layer 1 network. The Ethereum network acts as a highly secure underlying layer for all exchanges on Base. Layer 2 transactions are faster and cheaper because they are executed on a separate, side network and then grouped together to be transmitted back to the Ethereum main chain later.
Base blockchain says it aims to improve the ability to run decentralized applications on Ethereum more efficiently.
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, custodian fees and blockchain rewards. Adding the Base blockchain could also allow Coinbase to get a new revenue stream from apps built on top of it.