As a researcher with a background in the crypto industry, I find the recent buzz surrounding SocialFi apps, particularly Fantasy Top, intriguing yet concerning. While it’s true that some users stand to profit from these platforms and that Fantasy Top offers an innovative product, the sector as a whole is plagued by “perverse incentives.”
Analysts from K33 Research believe that there is significant demand among cryptocurrency users for the next major development in the Social Finance (SocialFi) sector. Despite facing challenges due to “perverse incentives,” this area of crypto is still seen as a promising and growing niche.
In a report published on May 8, analyst David Zimmerman from K33 DeFi highlighted that crypto community members have begun expressing interest in a fresh SocialFi application named Fantasy Top. This app is being developed on Ethereum’s layer-2 solution, Blast.
In simpler terms, Fantasy Top is a SocialFi game where players can purchase and trade virtual collectible cards representing crypto influencers or X accounts. Users can then participate in tournaments using these cards to earn rewards, including Ethereum (ETH), Blast’s GOLD token, platform-specific fan points, and additional card packs.
At the point of this writing, a newcomer to the Fantasy trading card market would need to invest approximately 0.39 Ether or equivalent to roughly $1,200 based on current Ethereum-USD exchange rates to get started.
Zimmerman pointed out that engaging in SocialFi activities, such as SocialFi projects like SocialFi and Fantasy Top, can bring financial gains for some and potentially create novel, enjoyable products. However, the SocialFi sector faces a significant challenge due to “misaligned incentives.”
“Narratives are often flooded with cash grabs, and SocialFi is no different.”
Influencers are motivated to promote the platform generously as they receive a 1.5% commission on trading volume using their card, plus a 10% share of pack sales. Furthermore, they will be rewarded with BLAST GOLD and “FAN points,” according to Zimmerman.
In spite of numerous prominent debuts of new layer-2 networks on Ethereum, Blast has effectively maintained its significance among users through the popular airdrop farming initiative.
Despite a 17% drop in Ethereum’s (ETH) value in April, he noted that the platform’s total value locked in US dollars has stayed elevated.
The much-anticipated airdrop from Friend.tech commenced on May 3, but was swiftly met with backlash from disgruntled users. They raised concerns over various technical issues that impeded their ability to claim and subsequently trade their distributed tokens during the event.
The backlash grew stronger when some prominent users on Friend.tech were able to purchase large quantities of the FRIEND token before most users had a chance, contributing to the token’s significant price drop from around $28 to $1.93 as reported.
Among crypto enthusiasts, the emerging platforms Sanko GameCorp and its offerings, Sanko Dream Machine for gaming and SankoTV similar to Twitch for streaming, are gaining popularity outside of Friend.tech and Fantasy Top.
As an analyst, I’d rephrase that statement as follows: “The Sanko GameCorp initiative has recently gained traction and is preparing to launch its Layer 3. However, if the anti-VC sentiment continues to intensify, similar to what we witnessed with Eigenlayer, this could potentially serve as a breeding ground for memecoin frenzy.”
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2024-05-09 07:12