The social networking platform Friend.tech has exploded in popularity recently, sparking a wave of copycat platforms trying to cash in on the hype. While the excitement around these new platforms is understandable, crypto expert Altcoin Sherpa warns investors to be cautious.
In a recent Twitter thread, Sherpa explained that while the initial rewards on these platforms seem enticing, most will eventually fail.
“Don’t invest what you can’t afford to lose,” he advised.
Unlike new crypto sectors, Sherpa notes these platforms operate more like speculative layer 1 blockchains. There is likely to be an influx of activity and value at first that savvy investors can benefit from.
A key difference is these platforms rely on influencer involvement rather than whales for activity. The creators have outsized influence compared to past protocols.
However, Sherpa warns this hype is unlikely to last. He recommends taking profits quickly, just as investors did in the 2021 layer 1 craze.
“Don’t get greedy and bag hold,” he cautioned.
Emerging social token ecosystems represent a new model compared to previous DeFi sectors. They function more like an alternative layer 1, attracting speculation and total value locked (TVL) that early adopters can capitalize on.
These social networks rely on influencers rather than whales to drive adoption. For once, creators have outsized influence as core components of these protocols, a departure from past norms.
For those who farmed rewards on networks like Avax, FTM, LUNA, and SOL in 2021, the key is extracting profits. Avoid greed, exercise caution, and don’t overstay your welcome. The social token party won’t last forever.
In the end, tread carefully around the growing number of Friend.tech clones. While they may provide short term gains, few are likely to endure. Heed Sherpa’s advice – don’t fall for scammers and get your profits out early!
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