Analysis
Is This the Death of SocialFi?
SocialFi nearly got killed this week.
What happened? The top two decentralized social media projects were sold.
- Farcaster was sold to Neynar.
- Aave sold Lens Protocol to Mask Network.
To be clear, this doesn't mean these projects are dead. It means the original founders are admitting defeat. The founders don't think the projects have PMF.
New buyers do believe these apps will find PMF. However, they're lesser known than the founders. Plus, past experience doesn't inspire confidence in decentralized social media.
- Even the Base App has pivoted away from socialfi to focus on trading. If Coinbase can't do it, who else can?
- We've been experimenting in this area since 2016 (Steemit), but we still haven't found product-market fit. Only a few protocols remain in this sector.
- Farcaster is the most successful decentralized social media. But the activity there has been in steady decline since it peaked in October 2025. The chart is below.
TLDR; Market has rejected these "decentralized social" projects consistently.
Until now, I've used Decentralized Social Media & SocialFi interchangeably, because they are to some extent. But there's a difference.
- SocialFi protocols are primarily about adding speculative aspects to social networks in crypto. A good example is Friend.tech, which monetized existing crypto social networks on X via tokens.
- Decentralized social media aims to remove the dependence on centralized platforms like X. They're aiming for user-owned social media. Lens Protocol is a great example of this. They're building an open social graph on blockchain.
- Protocols like Zora are mixes the two. They have onchain social graph, as well as financialization tools like creator coins.
After the sale news broke, Vitalik had a hot take.
He basically criticized the SocialFi direction, where speculative elements are celebrated. And he argued for decentralized social media.
A counterpoint to Vitalik is that decentralization by itself isn't enough to beat the network effects of web2 giants like X and Meta. Financialization is the superpower of crypto. So we should leverage it to the benefit of decentralized social.
Maybe Web3 social can provide a better monetization model for creators. Maybe it'll be an evolution of the PumpFun model. For example, here's a hypothetical way for PumpFun to create a wedge in social media space.
- They already have the callout feature, where users can follow "calls" from other users. On the leaderboard, users are ranked based on their calls as well.
- If PumpFun expands that feature to support "calls" of all onchain assets and an easy way to ape in, it could be the wedge into the social media space.
Other interesting apps include Firefly and 0xPPL. If you're interested, check those out as well.
Decentralized social networks won't find a big PMF immediately. But it's a worthy goal to chase, even if it's very hard.
The DeFi Edge Product
A 4x In This Market?
Back in November, we shared a Token Radar on Surge ($SURGE) at $21.5M market cap.
It's up 4x since then despite the market conditions.
That's what Token Radar does inside TDE Pro. We find tokens worth watching before they move.
The Surge thesis was simple: you're not betting on a single AI project. You're betting on the infrastructure that could power dozens of serious AI launches if the ICM thesis plays out.
We shared the reasoning. We shared the risks. Members got to make their own call with all the info laid out.
Here's what Token Radar actually does:
- We filter the noise. Thousands of tokens launch every week. We share the handful we think are actually interesting.
- We give you the 80/20. Team, tokenomics, catalysts, risks - everything you need to form your own view in 10 minutes instead of 2 hours.
- We share our thesis. Not just "what" but "why." The reasoning behind why something might be worth watching.
Want to see what a Token Radar looks like? Here's the full Surge report.
If you want more like this, we're running a New Year's promo on the annual plan.
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7-day money-back guarantee if it's not for you. No questions asked.
News
Trove Rug Pull: The Full Story and Lessons
What's this crazy chart? It tracks the rug pull of $TROVE.
Trove Markets was a perp market for collectibles like Pokémon cards and CS2 gaming skins. Importantly, this was to be built on HyperlIquid's HIP-3.
The HYPE community was bullish on the project.
- It's a unique niche.
- HIP-3 is a proven tech. (We've covered it here.)
- They'd done a closed beta for the platform. And even claimed $250 million in volume.
- Many influencers promoted this. (Only later were these revealed to be undisclosed shills.)
Everything looked good. So, when a token sale occurred, it had huge demand. While their target was only $2.5 million, they were able to get commitments for ~$11.5M.
But when the token launched on Jan 19th at a $20M valuation, it immediately cratered 95–98% within minutes.
What happened? Just days before their token launch, Trove announced they'll launch the $TROVE token on Solana.
This was very suspicious for many reasons.
Onchain sleuths found out that wallets linked to the Trove team dumped their $HYPE. The project was supposed to be built on HIP-3. And running HIP-3 markets required staking 500k $HYPE. If they dump it, they'll not be able to build the product.
The team explained that dumping was done by a 3rd party, but nobody believes that.
Additionally, this was seen as a violation of the implicit contract. The investors were giving money to an HIP-3 builder, not a Solana perp project that has to build everything from the ground up. The Solana plan didn't have any concrete details.
So when the product changed, investors asked for refunds. But instead, the Trove team kept $9.4M from the ICO raise.
The revelation that many KOLs had promoted the ICO without disclosing payments added fuel to the fire.
There was another drama for their ICO sale as well. It was regarding sale extension and Polymarket manipulation accusations, but that's another story. It was also another red flag.
This is a good reminder for some key lessons:
- Do not blindly follow KOL calls. Many influencers often engage in undisclosed promotions. You always have to build your own thesis for any investment.
- Anon teams are riskier. I'm not saying you cannot trust anon teams, but it's less trustworthy than doxxed teams. If the anon team is working on some unproven tech, like perp market for collectibles, then it should raise your alarm.
- Be wary of ICO oversubscriptions. Many people just assume oversubscription must mean the product is good. After all, people are putting real money into it, right?
No. Many projects artificially create oversubscription by talking to their whale friends and getting them put in huge amounts of money at the start. Once retail see the massive investments, they'll ape and invest. After retail invest, the projects can return most of their whale friends' money by citing "better distribution".
After the token launched and crashed to basically zero, they have gone radio silent everywhere.
Victims are trying to find the IRL identity of the team. Hopefully, they'll catch him and get their funds back. But chances are pretty low usually.
Stay safe out there.
🚀 DeFi Catalysts
SummerFi TGE has gone live. The $SUMR token is live on Aerodrome. If you're eligible, there's an airdrop waiting for you.
ETHGas has airdropped the $GWEI tokens for eligible members. It's an L1 preconfirmation protocol that aims to make Ethereum real-time.
ZAMA public auction has gone live. It'll end on January 24th. It's a protocol that enables private computation for blockchains.
Ondo has launched Global Markets on Solana. It'll bring hundreds of tokenized stocks & ETFs to the chain.
HyENA has opened up its perp trading terminal for the public. They've also announced incentives to boost usage.
Optimism has started voting on its proposal to buyback OP tokens with Superchain revenue. The proposal has mixed reactions.
Chainlink introduced 24/5 U.S. Equities Streams. It'll provide market data across all major U.S. equities and ETFs.
Nansen, the data platform, has launched a trading feature. It enables Agentic trading on mobile and Terminal trading on the web.
Liquity V2 users are eligible for an airdrop from Ēnosys on Flare Networks. ~$850k is estimated to flow into BOLD users.
📰 Industry News
Caroline Ellison was released after 14 months. She is the former head of Alameda Research and a key witness against SBF.
Changpeng Zhao, aka CZ, is the founder of Binance. He said he's in talks with "probably a dozen governments" about tokenizing national assets.
Kansas lawmakers introduced a bill that would create a state-run Bitcoin and Digital Assets Reserve Fund.
🐦⬛ X Hits
- The superapp thesis.
- Exciting Solana updates for 2026.
- Future of work when work is meaningless.
- Collector Group: the Pokémon business on Solana
- A round-up of Polymarket Trading Bots.
😂 Meme
Until next time,
Edgy
Today's email was written by Edgy and Yayya.
DISCLAIMER: I'm NOT a financial advisor. This content is for education and information purposes only. Crypto and DeFi are risky and speculative. Please do your research before investing.
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