SocialFi: Friend.tech, Farcaster and the tax on social tokens
SocialFi (Social Finance) is the fusion of social networks and DeFi. Users can buy and sell "shares" or "keys" of influential people, receive part of their fees and access exclusive content. This new asset class creates a particular tax complexity.
Friend.tech: the "keys" model
Friend.tech (in Base, an Ethereum L2) pioneered SocialFi in 2023-2024:
- Each user has an associated contract of "keys" (previously called "shares").
- You buy someone's keys → you access their private chat.
- The price of the keys follows a bonding curve (it rises with each purchase).
- Each transaction has a 10% fee: 5% for the key subject, 5% for the protocol.
Key taxation:
Key purchase
- Buy keys = transmission of the asset with which you pay (ETH) + acquisition of a new asset (keys).
- Profit/loss on the ETH used.
- Key acquisition cost = ETH value paid in EUR.
Key sale
- Sale = capital gain/loss between sale price and acquisition cost.
- The bonding curve can generate big profits if you sell when the subject is popular.
Fees received as a creator
- If you are the subject of the keys and someone buys/sells → you receive a 5% fee.
- Taxation: return on capital or economic activity (if you systematically create content).
Stars Arena (Avalanche) and similar
Stars Arena was a Friend.tech clone on Avalanche, which was hacked and shut down.
- Loss of funds due to hack: possible financial loss if there is a document of the loss (see exchange bankruptcy guide).
Farcaster and DEGEN/FARTHER tokens
Farcaster is a decentralized (federated) social network protocol:
- Creators on Farcaster can receive DEGEN or FARTHER tokens for "tips" from their followers.
- There are also tokenized channels and memberships.
DEGEN/FARTHER taxation for tips:
- Receive DEGEN as tip = capital gain on the general basis (market value upon receipt).
- Send DEGEN as tip = DEGEN transmission (profit/loss on the acquisition cost of that DEGEN).
Monetized warps and casts
On Farcaster, casts (posts) can include a mandatory payment (pay-to-interact). Taxation similar to tips.
Social own tokenized tokens (Creator tokens on platforms in Spain)
In Spain, some creators have begun to issue their own loyalty tokens:
- If you issue your own tokens and sell them: possibly economic activity (VAT if applicable, performance of economic activities).
- If you buy them from other creators: the same as Friend.tech keys.
Points vs tokens
Many SocialFi platforms start by distributing non-transferable "points" before the genesis token:
- Points are not assets → they are not taxed until they are converted into tokens.
- TGE (Token Generation Event): at the time of conversion points → tokens, the tokens received = capital gain (market value in the TGE).
Unresolved questions for the AEAT
- Are Friend.tech keys financial assets or access rights (service)?
- Are the fees received as a creator movable capital or economic activity?
- Are loyalty points tokenized before TGE active?
- Do dead platform tokens (Stars Arena) generate deductible losses?
Recommendation: Document all events with onchain transaction tickets. Consult with a tax advisor specialized in DeFi.
Recommended registration
| Event | What to save |
|---|---|
| Purchase of keys | Hash TX, ETH paid, price in EUR, cost of keys |
| Key sale | Hash TX, ETH received, price in EUR, G/P |
| Fee charged as creator | TX hash, tokens/ETH received, value in EUR |
| Tip received at DEGEN | TX hash, DEGEN amount, EUR value received |
Updated: April 2026 | Fiscal year: 2025