Original author: Nianqing, ChainCatcher
Recently, DeFi researcher Ignas tweeted that after communicating with the team, it has been confirmed that the encrypted social application Phaver has ceased operations. In addition, Phaver needs to pay employees 1 to 2 months of severance pay. Some former team members are developing SocialDAO to find new uses for SOCIAL tokens.
The price of Phavers SOCIAL token has fallen 99% since the TGE in September 2024. As of press time, the price is $0.000168, and 68% of the tokens have not yet been unlocked.
Phaver was once highly anticipated in the SocialFi craze in 2023. Phaver was once the largest mobile application of the Lens protocol, with more than 800,000 downloads and 35,000 DAU at its peak, once accounting for 50% of Lens traffic and 40% of Farcasters external application share.
Obviously, Phaver, who is determined to break the social barriers of Web 2 and Web 3 through Web2.5, also finds it difficult to break the dilemma of continued growth in the SocialFi track. The end of short-term incentives after TGE and the fading of the SocialFi craze make it difficult for the project to continue.
In addition to Phaver, TreasureDAO, which once aspired to become the Web3 Nintendo, also recently announced its decision to completely terminate game development and distribution and transform to AI.
Although entertainment applications such as social networking and games carry the crypto industrys expectations for Mass Adoption, except for financial use cases such as stablecoins, DeFi, and RWA, other tracks are facing the pressure of being falsified. After the end of the last round of bull market, the spring of social networking, NFT and blockchain games has not yet arrived. In this long winter, the crypto market may be about to usher in a new wave of closures.
A brief history of the rise and fall of Phaver
Phaver was founded in 2020. The Phaver team members are from big companies such as Google, Goldman Sachs, and Alibaba. The founders have rich experience in social applications in the Web2 field. Phaver aims to provide Web3 applications with user-controlled social experiences through decentralized protocols such as Lens and Farcaster. Phaver has always called itself Web 2.5 and supports Web2 login at launch to simplify the process of users entering Web3. In addition, it is the only social application that allows cross-posting and integrates both the Lens Protocol and the Farcaster Protocol.
In October 2023, Phaver completed a seed round of US$7 million, with participation from Polygon Ventures, Nomad Capital, Symbolic Capital Partners, Foresight Ventures, dao 5, f.actor, Superhero Capital, Alphanonce and other leading institutions. The valuation is approximately US$80 million.
In May 2024, Phaver launched the SOCIAL token and started the first season of airdrops. In September of the same year, TGE was officially completed. After TGE, there was little official progress.
It was not until the end of 2024 that Phaver officially announced its full transformation into a SOCIAL DAO. SOCIAL DAO is an AI-first Internet organization, which means that only a few people from the Phaver team will continue to participate in the DAOs contributions. In order to reduce costs, AI Agent was introduced into the daily operations of the DAO.
Phaver’s mobile app was deactivated in January this year. Currently, its token SOCIAL is almost identical to Memecoin except for the staking function.
A new wave of project closures coming?
On April 3, the blockchain gaming ecosystem TreasureDAO announced the complete termination of game development and distribution, and attempted to gradually transform to AI. Treasure DAOs financial situation deteriorated and faced restructuring, with annual operating expenses as high as $8.3 million, and only $2.4 million left in the treasury, which was originally expected to last only until July this year. DAO has laid off 15 people, so it decided to terminate the game business and Treasure Chain, and will assist partners in migrating to other chains.
The consensus that social and gaming are the entry points for large-scale adoption of Web3 is collapsing across the board.
With the rise of new concepts such as NFT, Web3 social, and GameFi, the revolution of Crypto on data ownership has gradually been linked to Web3.0, and the belief in cryptocurrency is growing. However, in this round of the market, financial use cases such as Bitcoin ETF, RWA, and stablecoins are still invincible, and other tracks are facing the pressure of being falsified. After the end of the last round of bull market, the spring of social, NFT, and blockchain games has not yet arrived. The belief in Web3 began to waver - cryptocurrency is more like a major innovation in the field of financial technology, rather than a disruptive upgrade of the Internet.
During this long winter, the crypto market may be about to usher in a new wave of closures.
Bear market survival rules: staying alive is the first priority
The plight of Phaver and TreasureDAO has triggered a deeper discussion: How can the project parties survive when the market cools down?
Phaver team members said that there were three main reasons for the termination of the original social project:
TGE and airdrop issues: During the TGE, the airdrop portal was down for several hours, preventing users from claiming tokens immediately, causing panic (FUD).
Exorbitant CEX listing fees: Paying over $1 million for listing on 5 exchanges including Bybit, KuCoin, Gate, etc., drains resources.
Lack of operating funds: No tokens were sold during the TGE to avoid further FUD, but this resulted in a shortage of funds and an inability to maintain operations.
The closure of Phaver also reminds other teams that good fund management is a must for crypto projects and cannot become a shortcoming, otherwise the probability of failure is very high. The Phaver team did pay great attention to product construction, but the team ignored economics and token management and did not sell any tokens at the time of release. Phaver founder and CEO Joonatan Lintala previously said in an interview with ChainCatcher: Friend.techs rapid growth is interesting, but we are fundamentally different from it. We pay more attention to the social aspect rather than the token economy to a large extent.
Although Farcaster completed a $150 million Series A financing at a $1 billion valuation last year, it is still facing the pressure of going public. The social track has always faced the dilemma of short-term incentives and long-term growth. Without killer use cases or incentives, it is difficult to attract people to leave traditional social platforms such as X or Weibo.
In addition, Phaver also used a negative example to explain why the project party needs to be listed on a large exchange. KOL @陈剑Jason believes that many projects are listed on Binance under the pressure of breaking the issue price, and the ultimate purpose is not to sell for a certain amount of money, but to avoid going to zero. After all, as long as you have a shell on Binance, even if the price of the coin drops by more than 10 times in the bear market winter, it is likely to come back to life in the next bull market. If you are not listed on a large exchange, going to zero is really going to zero.
@Ye Su believes that second-tier projects like Phaver (raising less than 10 million) spending a lot of money on second-tier exchanges will accelerate their death. The correct approach should be to not use CEX at all, but use DEX to save money to polish the product. Now the progress is smooth, and the market value has maintained 150 million. The most important thing is to survive the winter.
Garbage time is indeed the best opportunity to BUIDL, but the first priority for players is to survive and stay here.
