Crypto’s own Twitter-killer?

Unpacking the Freind.tech buzz

Author

Angelina Berger
August 29, 2023

Welcome back. Ever since Twitter rebranded to X, saying “crypto X” just doesn’t have the same ring as “crypto Twitter”…so I need your help. Reply with your favorite name ideas and I’ll feature the best ones in next week’s edition.

Today: Everything you need to know about Friend.tech, SBF’s (amusing) legal strategy, and the new structural changes behind USDC. Let’s dive in.

—Angelina

In Crypto’s Friend Zone

Forget BlueSky and Threads, crypto now has a viral “Twitter killer” of its own. Introducing: Friend.tech.

Major traction: After debuting August 10, Friend.tech quickly hit 100,000 users and $25 million in revenue (though that momentum has since slowed down significantly). The app has also attracted the interest of NBA players, gaming celebs, and crypto personalities.

How does Friend.tech work? Built on Coinbase’s new Base blockchain, Friend.tech is a decentralized, invite-only social platform. 

  • The app allows creators to tokenize their popularity on X (formerly Twitter) by selling shares of themselves to their followers.

  • Shareholders enjoy certain privileges, like access to private chat rooms (similar to Telegram or WhatsApp groups) with their creator.

  • Creator shares can be traded freely—as the number of participants in a particular group rises, so does the base price of a share in that creator.

Rise of SocialFi: Friend.tech differs from other so-called Twitter killers in that it fuses social engagement with investment dynamics. The app is the latest iteration of the SocialFi movement, which promises creators and users better control of their data, freedom of speech, and the ability to monetize their social media following and engagement—all things that web2 incumbents like Facebook and Instagram fall short on.

But Friend.tech has its fair share of skeptics. The app requires users to link their Ethereum wallet with their X account, which creates two issues:

  1. This gives Friend.tech certain permissions to users’ X accounts, such as tweeting on their behalf.

  2. When Friend.tech’s user database was leaked last Monday, its contents publicly revealed which X accounts are tied to which crypto wallets—sensitive information that jeopardizes users’ privacy.

SBF: The Lawyers Made Me Do It

We’re going to have to wait until October for Sam Bankman-Fried’s trial, but that doesn’t mean that he can’t provide us with some entertainment in the meantime. A prime example? The official legal strategy SBF’s defense team announced on Wednesday.

In one sentence: “My lawyers made me do it.” The details →

  • SBF intends to argue that he was acting in “good faith” on advice of FTX’s former legal counsel from law firm Fenwick & West regarding many of his alleged misdeeds.

  • These misdeeds include providing insider loans to FTX and Alameda execs and setting internal Signal messages to auto-delete.

  • The new strategy aligns with SBF’s past attempts of presenting himself as too young and naïve to have orchestrated a major financial fraud.

Will it work? This type of “advice of counsel” defense allows the defendant to admit to their wrongdoings by claiming that their legal counsel led them to believe that they were acting within the law. If the jury buys it, this would absolve SBF of the elements of intent included in charges against him.

But: A big question mark hangs over whether SBF can produce enough evidence to support his claim. He is, after all, notorious for ignoring his lawyers’ advice.

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Coming Full Circle

Some important things are changing in the background of crypto’s second largest stablecoin, USDC. The Centre Consortium—the partnership between Coinbase and Circle that jointly issued USDC—is being shut down.

What’s changing?

  • Circle, which has been responsible for managing the logistics of USDC so far, will bring issuance and governance of the stablecoin fully in-house.

  • Coinbase acquired a minority stake in Circle and will continue to receive a share of the revenue generated from USDC’s reserves.

The interesting part: Coinbase and Circle attributed the move to increased regulatory clarity in the stablecoin space, likely a reference to the promising progress of the Clarity for Payment Stablecoins Act of 2023, which won bipartisan support on a key committee in the House of Representatives. More of that clarity stuff, please.

In other news:

  • The DOJ re-sparked the Tornado Cash controversy by charging two of its founders.

  • ParallelChain is pioneering a “Web-agnostic” approach by creating a blockchain ecosystem supporting both Web2 and Web3 technologies. See here how this new level of interoperability empowers applications to harness the best of both realms.*

  • Mastercard and Binance are ending their crypto card partnership.

  • President Biden’s proposed crypto tax reporting rules sparked concern among crypto commentators.

  • Rogue devs on the Pepecoin team stole 15 million in $PEPE.

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Crypto Job Board

And that’s what you need on your radar today in crypto. Don’t forget to send me your best name ideas for what was formerly known as “crypto Twitter” (RIP). Catch you back here next Tuesday!