Growing Interest in SocialFi Despite Challenges: Insights from K33 Research
Summary:
Crypto enthusiasts show growing interest in SocialFi sector, despite inherent flawed incentives, according to a K33 Research report. The report cites recent interest in new applications like Fantasy Top, developed on Ethereum's layer-2 network Blast, which allows users to trade virtual game cards of crypto-linked accounts. Despite successful launches and steady platform TVL, the sector is plagued by issues like monetization opportunities and issues with token access and sales, as observed in the recent airdrop by Friend.tech. Emerging platforms like Sanko GameCorp are also underlined as potential attractions for crypto users.
Analysts from K33 Research have highlighted an increasing interest in the Social Finance (SocialFi) sphere among crypto enthusiasts, despite inherent faulty incentives. The May 8 report, penned by K33 DeFi analyst David Zimmerman, noted that post the latest airdrop from Firend.tech, crypto enthusiasts are pivoting towards a new SocialFi application, Fantasy Top. This application, developed on Ethereum's layer-2 network Blast, is seen as the next potential opportunity.
Fantasy Top, a SocialFi gaming application, allows users to purchase and sell virtual trading cards of crypto-linked X accounts and use them in tournament competitions. The platform rewards user activity with ETH, Blast's reward token GOLD, native 'fan points' and additional card packs. Currently, an introductory trading card pack on Fantasy costs nearly 0.39 ETH, or about $1200. Zimmerman highlighted that profitable SocialFi activity and engaging apps like Fantasy Top can’t overshadow a fundamental issue in the SocialFi sector – the problem of faulty incentives.
He suggested that the narratives often involve monetization opportunities, a trend not alien to SocialFi. Influencers are encouraged to promote the platform as they earn a 1.5% trading volume fee on their card and 10% of the sales pack. Furthermore, they also receive BLAST GOLD and 'FAN points'. Zimmerman noted that even with the launch of numerous new layer-2 networks on Ethereum, Blast has maintained relevance as users actively farm the Blast airdrop program. Additionally, the platform's TVL remains robust in USD terms, irrespective of Ether (ETH) witnessed a 17% drop in April.
Friend.tech released its much-awaited airdrop on May 3, but the launch was marred by several technical glitches that barred users from accessing and later selling their tokens as the airdrop took place. The frustration heightened when a few significant accounts on Friend.tech managed to sell substantial amounts of the FRIEND token while numerous users found it inaccessible, a phenomenon coinciding with a nearly 90% nosedive in the native token price from around $28 to a paltry $1.93 at the time of reporting.
While Friend.tech and Fantasy Top continue to engage users, Zimmerman further added to the discussion about the emerging gaming platform, Sanko GameCorp, boasting a gaming platform called Sanko Dream Machine and a Twitch-esque streaming service SankoTV. He said Sanko GameCorp, established through fair means, is set to launch its own L3, and in the event of increasing pushback against VCs and insiders, this could potentially attract meme coin enthusiasts.
Published At
5/9/2024 6:58:26 AM
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