Crypto degens ‘hungry’ for next big SocialFi breakthrough — K33 Research

    09 May 2024
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    Crypto users are clamoring to find the next big thing in the Social Finance (SocialFi) sector, according to analysts from K33 Research — who see it a growing corner of crypto despite being plagued by “perverse incentives.”

    In a May 8 research report, K33 DeFi analyst David Zimmerman wrote that following a recent Firend.tech airdrop, crypto users are already looking to a new SocialFi app called Fantasy Top – built on Ethereum layer-2 network Blast — as the next potential opportunity.

    Fantasy Top is a SocialFi game allowing users to buy and sell virtual trading cards of crypto-affiliated X accounts and use them to compete in tournaments. These tournaments are paying users for their activity on the platform in ETH, a reward token on Blast called GOLD, native “fan points” and additional packs of trading cards.

    As of the time of publication, a starting pack of trading cards on Fantasy will set users back around 0.39 ETH — $1,200 at current prices.

    Zimmerman noted that while SocialFi activity may prove profitable for some and that Fantasy Top may even yield a novel product that could be “fun to use” — the SocialFi sector is still prone to a fundamental problem that arises from “perverse incentives.”

    “Narratives are often flooded with cash grabs, and SocialFi is no different.”

    “Influencers are directly incentivized to shill the platform as ‘heroes’ earn a 1.5% fee of the trading volume for their card on top of 10% of the pack sales. In addition, they will earn BLAST GOLD and “FAN points,” added Zimmerman.

    Despite there being several high profile launches of new layer-2 networks on Ethereum, Blast has “managed to hold on to relevancy” as users aggressively farm the Blast airdrop program.

    He added that the platform’s TVL remains high in USD terms despite the price of Ether (ETH) falling 17% in April.

    Friend.tech’s long-awaited airdrop went live on May 3 and was promptly met with an outcry of criticism from users which cited several technical difficulties that prevented them from accessing and subsequently selling their tokens as the airdrop occurred.

    This outrage was amplified further when several large accounts on Friend.tech managed to sell outsized sums of the FRIEND token before many users could even access it, something that occurred as the price of the native token fell roughly 90% from a peak price of roughly $28 to a price of $1.93 at the time of publication.

    Outside of Friend.tech and Fantasy Top, Zimmerman added that a lesser-known streaming and gaming platform called Sanko GameCorp — which offers a gaming platform called Sanko Dream Machine and a Twitch-like streaming service called SankoTV — is also picking up steam among crypto native users.

    “Sanko GameCorp was a fairly launched project and it is about to spin up its own L3. If we continue to see a backlash against VCs and insiders as we did with Eigenlayer, this could become a major playground for (anti-VC) memecoin madness,” he said.

    Source: https://cointelegraph.com/news/crypto-degens-hungry-big-socialfi-breakthrough-k33-research

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