K33: Crypto users are eager to find the next big thing on SocialFi

Author: Tom Mitchelhill, CoinTelegraph; Compiler: Deng Tong, Golden Finance

Analysts at K33 Research say that cryptocurrency users are eager to find the next big thing in the SocialFi space, which they believe is growing despite being plagued by "perverse incentives."

In a May 8 research note, K33 DeFi analyst David Zimmerman wrote that Following the recent Firend.tech airdrop, cryptocurrency users have begun to view 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 that allows users to buy and sell virtual trading cards for Crypto X accounts and use them to participate in tournaments. These tournaments pay users for activity on the platform in ETH, a reward token on Blast called GOLD, native “Fan Points,” and additional trading card packs.

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

A trading card starter pack costs $1,193. Source: Fantasy Top

Zimmerman noted that while SocialFi activity may be profitable for some, and Fantasy Top may even produce a novel product that is “fun to use,” the SocialFi industry is still prone to fundamental problems stemming from “perverse incentives.”

“The narrative is often filled with money grabs, and SocialFi is no exception.”

“Influencers are directly incentivized to promote on the platform, as ‘heroes’ receive a 1.5% fee on card transaction volume, in addition to 10% of card pack sales. In addition, they will receive BLAST GOLD and ‘fan points’,” Zimmerman added.

Despite multiple high-profile launches of new Layer 2 networks on Ethereum, Blast has “managed to remain relevant” as users actively participate in its airdrop program.

He added that despite a 17% drop in the price of Ethereum (ETH) in April, the platform’s TVL remains high in US dollar terms.

Blast TVL remains stable despite ETH price drop. Source: K33 Research

Friend.tech’s long-awaited airdrop went live on May 3 but was quickly met with backlash from users who pointed to a number of technical difficulties that prevented them from accessing and subsequently selling their tokens while the airdrop was taking place.

The outrage was further amplified when several large accounts on Friend.tech managed to sell large amounts of FRIEND tokens before many users could even access them, which occurred at a time when the price of the native token had fallen roughly 90% from its peak price of around $28 to $1.93 at the time of publishing.

Source: Luke Martin

In addition to Friend.tech and Fantasy Top, a lesser-known streaming and gaming platform Sanko GameCorp, which offers a gaming platform called Sanko Dream Machine and a Twitch-like streaming service called SankoTV, is also thriving in the cryptocurrency space, Zimmerman added.  

“Sanko GameCorp is about to launch their own L3. If we continue to see a backlash against VCs and insiders like we did with Eigenlayer, this could become a prime playground for (anti-VC) memecoin madness,” he said.