Last Sunday, Friend.tech’s official Twitter account released a project update, stating that it had set its smart contract management and ownership parameters to an empty Ethereum address of 0x000…000 to prevent any future changes to its fees or functionality. In other words, the Friend.tech team has given up control of the smart contract and the project will not have any future upgrades or improvements. This action actually announced its death to the public.
Affected by this news, Friend.tech's official token $Friend plummeted from $0.3 to $0.078 in one day on September 8, a drop of 68%. Of course, before that, the trading depth of the token was already pitifully low, with a daily trading volume of no more than $1 million. The person who was most seriously injured in this incident may be "Big Brother Machi" Huang Licheng, who spent $15.6 million to buy $Friend tokens in May, which are now worth only $510,000. In fact, since the beginning of 2024, Friend.tech has been unable to hide its decline. Not only has there been no improvement in the application, but the update frequency of the official Twitter has also been greatly reduced. Now Friend.tech's official Twitter has completely rotten, and the content is only the daily club rankings. Thinking back to the social grand occasion that Friend.tech set off at the end of 2023, it is really a pity. In this article, I will take you to review how Friend.tech has fallen, and why I think the SocialFi track may have been completely eliminated in this round of bull market.
From being a hot topic to being ignored, Friend.tech collapsed in just 3 months
Friend.tech was launched on the Base chain on August 10, 2023. With its unique KOL fan tokenization design and the hard-to-find hunger marketing, many Twitter bloggers who are extremely eager to monetize traffic have joined in. As a result, Friend.tech attracted 2,800 people on the first day of its launch. Of course, since it is at the end of the fur-pulling craze at the end of 23, Friend.tech has not forgotten to attract black slaves from all sides through point airdrops. The subsequent official announcement of Paradigm’s participation on August 19th added fuel to the fire. By the end of August, the total number of Friend.tech users had exceeded 90,000, and the TVL exceeded 85 million US dollars. The generated protocol Gas fees allowed the Friend.tech project to earn nearly 3 million US dollars.
However, as a social application, Friend.tech regards fan tokens, hunger marketing, airdrops and other means that can only produce short-term wealth effects as its core, and designs Friend.tech into a "game" with pure flywheel gameplay, which is destined to be unable to maintain for a long time. According to Dune data, Friend.tech's last glory was frozen in early October 23. At this time, Friend.tech's protocol revenue had reached 10,000 ETH, and the total number of participating wallet addresses exceeded 230,000. However, the enthusiasm of the market began to shift at a very fast speed to the sweeping inscription craze, resulting in insufficient new funds to take over. As a result, Friend.tech's flywheel building collapsed at the speed of light. By November 26, Friend.tech founder Racer directly cancelled his Twitter account, and the in-app trading market has become stagnant.
In December, the Friend.tech team transferred all 8,000 ETH in its protocol fee address to Coinbase. Perhaps the Friend.tech team still had expectations for the project at that time and did not withdraw all the ETH. In May of 2024, the V2 version was launched and the airdrop distribution was completed this month. The official may be thinking of reviving the project through the launch of the new version and the wealth effect of the airdrop, but the reality is very bleak. The market has completely lost interest in Friend.tech, so on June 11, the Friend.tech team transferred the remaining 2,800 ETH in its protocol address to the exchange. At this point, the Friend.tech team completed all cashing out and the project officially entered the soft rug stage.
Friend.tech is not an isolated case. SocialFi may have been completely eliminated in this bull market.
In addition to Friend.tech, which was plagued by sustainability issues and eventually collapsed, another star project in the SocialFi sector also encountered this problem, that is, Farcaster, which was valued at US$1 billion and raised more than US$180 million. Farcaster took up the banner of SocialFi in the first half of this year. Unlike Friend.tech's short-term wealth effect strategy, Farcaster's business focus is to build a sustainable Web3 community portal platform, so the project did not bring an early profit model to ordinary users. However, with huge financing, Farcaster still quickly attracted nearly 90,000 users in February, with the highest number of new users reaching 15,000 per day, but this was also the peak moment of Farcaster. Since March, the number of new users of Farcaster has been decreasing, and now the number of new users per day is only 400. Although the project is continuing to operate, compared with its exaggerated financing amount, we can intuitively feel the difficulties faced by the current SocialFi sector.
In fact, as early as the beginning of this year, I had already questioned the potential of the SocialFi track in this round of bull market. This question was aimed at the innovation difficulties within this sector. We can analyze it from two aspects, one is model/technological innovation, and the other is narrative innovation.
Let’s first talk about model/technological innovation. The difficulty of this type of innovation is directly related to its corresponding competitors. For example, the infrastructure sector and DeFi sector, which we are most familiar with, including public chains, side chains, L2 networks, cross-chain protocols, etc., are in a state of internal competition in the Web3 industry. Therefore, these project parties can put aside Web2 and innovate completely from the perspective of Web3 thinking. For Web3, which is currently in its wild age, their innovation difficulty is definitely less than a series of application tracks such as social platforms, games, and music platforms. Even many projects in the DeFi sector are outright plagiarisms of the business model of the Web2 financial market, but they can still achieve huge success in Web3. The reason is that they can be independent of Web2 and form their own world in the Web3 industry, while application projects such as social platforms do not have this feature. The Web3 user group still belongs to Web2 at the application level, so their competitors are the giants from Web2. In other words, if a project can innovate a new social model in the social sector, then this project can be successful whether in Web2 or Web3. But how can such a project team give up Web2 and choose to start a business in Web3, a barbaric land where even the project party’s profit channels have not been explored maturely? Therefore, model innovation is undoubtedly a pipe dream for the current SocialFi sector.
Since model innovation is too difficult, SocialFi project developers can only innovate narratively, such as Friend.tech, which tokenizes KOL’s traffic and influence to achieve short-term prosperity, or companies like Farcaster and RepubliK This method of attracting users through potential airdrops and then spending energy to cultivate a segmented ecology is a more long-term and reasonable idea, but the actual effect is not as good as Friend.tech, because Web3 users are inherently very speculative. No one will use this immature app of yours, so the SocialFi track is also struggling in narrative innovation. If we compare it horizontally in the application sector, we can find that even among them, the SocialFi track is extremely difficult. For example, in the chain gaming circuit, although the life cycle of most projects is not long, as the teams of major Web2 game companies and famous IPs have entered Web3, the picture quality and playability of the game have been significantly improved compared to the last bull market. With the improvement, coupled with the traffic entrance of Telegram mini-games, the market recognizes that current chain games can attract the narrative of Web2 users, and what is the narrative of the social track? "Social to Earn"? Attract Web2 users? Or capitalize social data? We clearly cannot agree on these narratives.
Based on the above issues, although narrative innovation is easier to achieve than innovation in social models, up to now, the SocialFi track has not yet produced an eye-catching long-term narrative. With the current bull market already more than halfway through, the SocialFi track may have been completely out of the game. Of course, I do not deny the future potential of this track, and I believe that in the future there will be a new narrative in the SocialFi track that will fill us with faith. It’s just that I think the probability of it happening in this round of bull market is not high, and blockchain gaming is the track we should invest more energy in now. We will stop here for this article. If you agree with my analysis, you are welcome to join our blockchain gaming community and work together to go through the second half of the bull market.
