Please indicate that the reprint is from the "Biteye" community
Author: Biteye core contributor Louis Wang
Editor: Crush, core contributor of Biteye
Community: @BiteyeCN
*The full text is about 4,500 words and the estimated reading time is 8 minutes
Friend.tech is a SocialFi application built on the second-layer network Base chain. It tokenizes each user's influence by binding Twitter identity, giving users the opportunity to gain benefits through influence.
Friend.Tech is currently in Beta, and users can only register via an invitation code. Users can only use Friend.Tech on the mobile web page, and need to use the mobile browser to add the web page to the home screen before starting the registration process:
Use the invitation code to enter the registration page and connect to Twitter;
An MPC wallet is automatically generated for each newly registered user, with privy.io as the wallet provider, and the private key of the wallet can be exported;
Verify through a unique code, or manually transfer at least 0.01 ETH across chains to the wallet Base chain to activate the account. ETH is used as the main payment currency to purchase other users' keys (formerly called shares);
Purchase your first key and complete the registration. After the purchase is completed, you will have a chat room, and all people who have purchased your key can speak in this chat room.
01 Product Features
The product features are relatively simple at present, only having a friend position and joining a group chat. Users can see the most popular users on the homepage, or manually search for the users you want to follow and purchase their keys.
If you hold someone else's key, you can enter the chat room of that user (subject). If you sell the key, it will be automatically removed.
02
Pricing Curve
In addition to holding keys to interact with KOLs, Friend.Tech's feature is that it allows users to trade keys. In order to enter the small circle, you must buy keys, and the price of keys will increase with purchases. There is no upper limit on the supply of keys for each user, and the pricing is calculated by the formula:
Y = X^2 / 16000
Where Y is the purchase price in ETH, X is the current number of keys, and the price curve as the key changes is as follows:
03 Taxation mechanism
All transactions on Friend.Tech will be charged a 10% fee, of which 5% will be given to the purchaser (the subject), that is, the KOL, and 5% will be given to the platform as platform revenue.
Combining the pricing curve and tax mechanism, it is not difficult to draw the following conclusions:
1. The pricing curve (bonding curve) is a very simple parabolic function. From the table below, we can see that the price of the key is very cheap at the beginning, and it rises rapidly as the purchase share increases. It can quickly raise the price at a low cost, causing the "unrealized profit" to grow rapidly, which easily creates Fomo sentiment and attracts more people to participate.
2. Similarly, prices will fall rapidly due to profit-makers selling. It follows the same curve, going up and down as well.
3. KOLs’ income comes from the tax on handling fees, which is consistent with the platform’s profit source, so they care more about the trading volume. The more people who “trade in waves”, the more handling fees they can earn than a unilateral price increase of the key, because the rapidly rising price can easily stop rising.
Currently, the user with the highest income, Crypto OG Cobie, has earned $150,000 in income from transaction fees. There are 52 people whose income exceeds $10,000:
Source: https://dune.com/cryptokoryo/friend-tech-highest-earners
4. In terms of mechanism, Friend.Tech is a bit like an NFT exchange, which collects taxes through transactions. Just trying to speculate through trading keys, users will be taxed 10% every time they buy and sell, so even if they buy and sell in the same place, they will lose a lot, and even a small increase will not make any money.
Based on the profit model, the profit rules are summarized. The relationship between the buying position and the total number of shares is shown in the following table:
Hardcore Decryption of Friend.tech, In-depth Analysis of the Working Principles and Risks of FT (with Examples) Original Author: 0xKing Original Source: King's Chat www.coinonpro.com
If you buy in the early stage (1-18), you can exit with profit as long as two people buy the key later. The later you buy, the more stringent the profit exit requirements will be. For specific profit requirements, please refer to this table.
Friendtech Profit ModellingProfit Modelling Amount,1.0000000,E.g. If you bought at 0.081 ETH (i.e., you hold the 36th share), you'll start profiting when …docs.google.com
5. Therefore, as long as you choose the target well, that is, the KOL who has just opened Friend.Tech but has traffic expectations, it is still relatively easy to make a profit if you buy it early, especially when Friend.Tech is in full swing and liquidity is sufficient. You can use the cryptohunt tool to view popular and newly added KOLs. The system will be updated every 10 seconds and has a real-time monitoring function.
https://www.cryptohunt.ai/projects/friendtech
6. This strategy gave rise to a new type of profit-making method: Bot.
Realfriend.tech is a bot website that can find new and potential users who have joined Friend.Tech, ambush them at very low prices in the early stage, and then exit with profit after more users pour in. To use this website, you first need to purchase a key from the website developer @iam4x.
Source：https://www.realfriend.tech/
Currently, 143 robots have earned more than $2.2 million by tracking new accounts and picking up leaks.
Source：https://dune.com/21co/friendtech-analysis
04
Friend.Tech
Data Friend.Tech has become a hot topic since its launch on August 10. First, it adopted an invitation mechanism as a GTM strategy (go-to-market is a company's plan to bring new products or services to the market).
This hunger marketing strategy is often more attractive to users because through invitations, users can experience and explore the Alpha version first than others.
In addition, early participation in the project also makes it easier to get price advantages. The invitation system also increases the topic discussion on Twitter. When everyone is talking about the invitation code, it becomes the best advertising method.
Source：https://dune.com/msilb7/friendtech-on-base-activity
How popular is Friend.Tech? Two weeks after its launch, the number of users reached 120,000 on an invitation-only basis, and the cumulative number of transactions exceeded 2.4 million. The TVL exceeded 6.3 million US dollars, the total market value exceeded 10,000 ETH, the transaction volume reached 520,000 ETH, and the protocol income was close to 2,400 ETH.
Source：https://dune.com/21co/friendtech-analysis
Two weeks after its launch, the 7-day protocol fee ranked fifth, behind top Layer1s and super apps such as Ethereum, Lido, Uniswap and Tron.
Source: https://defillama.com/fees
For Base, Friend.Tech is undoubtedly the traffic password of this second-layer public chain. 21% of Base users have used Friend.Tech, and 45% of Base’s gas consumption comes from Friend.Tech.
Source：https://dune.com/21co/friendtech-analysis
05
What to expect from Friend.Tech
Friend.Tech is a SocialFi product with fan economy at its core. It monetizes everyone's social value by issuing keys on behalf of users.
Its GTM strategy is very successful. Through strong binding with Twitter, the group that is most likely to benefit is the traffic group itself, and then to the fission of referral codes and hunger marketing-style launch.
The product is deployed on the Base chain which was recently launched. It takes advantage of users’ mentality and willingness to actively interact with Layer2, and also brings a smoother on-chain interactive experience to the application.
First, it launched an off-chain and off-chain points mechanism, and then released information about Paradigm’s investment. These rounds of offensives raised users’ expectations.
It can be said that Friend.Tech has captured traffic and eyeballs since day one, and the core of Web3 is attention.
Social
From the perspective of social functions, Friend.Tech’s functions are currently too thin, limited to text and picture communication;
Moreover, the APP actually only has paid functions. If users do not purchase other people’s keys, the APP will be useless and there will be no experience at all. At least some free content is needed for users to play first.
The user experience is more about value than merit. The good thing is that you don’t have to download apps from the App Store. It’s a web page but has an app-like experience.
Through the unique code, you can cross the chain to the application wallet with one click on the website, and the cross-chain operation is smooth.
The bad thing is that there are often freezes and refreshes. If you don’t buy other users’ keys in a group chat, you won’t be able to see other people’s comments, and it feels like the group owner is talking to himself.
Users cannot know which Twitter bloggers they follow have opened Friend.Tech, they can only search for them by searching their Twitter IDs…
Be
As for Friend.Tech Fi, the pricing curve is too steep. When the key share exceeds 100, the unit price can be raised to more than 1 ETH. It has too strong a Ponzi flavor, which is more obvious when the social part is weak.
This is also why many people criticize Friend.Tech, thinking it is just a bubble that will soon burst.
However, unlike pure Ponzi, Friend.Tech has practical application value. It can indeed provide a scenario to narrow the distance between users and KOLs. Even if latecomers are stuck because the price is too high, they may not "cut their losses and leave."
Being trapped at a high position must mean that the KOL you purchased has enough popularity and traffic. Since you will definitely lose money if you sell it, it is better to enter the circle of high-traffic KOLs with the key, look forward to Alpha, and possibly make a profit in the future.
Users who have made a profit will not necessarily sell, because unless they are particularly optimistic about both Friend.Tech and the KOL, the shares they purchase will generally not be too large.
When a large number of fans pour in and cause the price to skyrocket, it is very likely that the KOL's FT group has special Alpha. At this time, selling the key is like killing the goose that lays the golden eggs, so the selling pressure can be controlled.
Another point is that Friend.Tech has not issued any coins yet, and the currency in circulation is ETH. The income of traditional Web3 projects is limited by the rise and fall of the platform tokens, and earning ETH is more like earning real money for users, so there is no situation where the bubble bursts and the price of the coin drops to zero and the project goes bankrupt.
For the price curve, a more reasonable approach is to give the pricing power to users and increase diversification. Each user can customize according to their own ID needs, which can affect the size of the potential fan circle and reasonably control the growth rate.
Based on the above analysis, it can be inferred that Friend.Tech’s current pricing curve is too steep, which can easily give people an illusion of “unrealized profits” and lead to FOMO emotions.
The growth point lies in more KOLs joining the platform, or empowering fans through product upgrades to increase their desire to buy and willingness to pay. After the photo and video functions are opened, a wave of OnlyFans climax can be foreseen.
The product is currently in Beta version. Considering the timing of Paradigm's investment, the development time is not long. It has been actively updated and maintained since its launch. Therefore, there is still a lot of room for improvement in the future, and the upper limit is relatively high.
Due to its actual application value, the lower limit is limited. At the same time, because there is no platform token, the price of the currency will not continue to fall, causing users to lose confidence and leave the market. At most, it will become dull and no one will care about it, just like Damus, which was very popular at the beginning of the year.
Two weeks after the official launch, users’ enthusiasm for Friend.Tech has come to an end. At the same time, due to the single function and lack of sustainability, it can be found that the transaction volume and user activity have dropped drastically, but the TVL of the protocol has not fluctuated and remains stable. This further confirms the above point of view: users are not in a hurry to exit, and the next wave may come at any time with the iteration of Friend.Tech functions.
Source：https://dune.com/21co/friendtech-analysis
06
Summarize
As Twitter began to distribute dividends to creators, the pressure on Lens-like social platforms has increased. The user base and traffic profits are obviously not as good as Web2, and creators are not willing to switch platforms strongly.
The fan economy is a track where users are willing to pay. Imagine if Friend.Tech is accepted by the entertainment industry, it will be a blockbuster that can break the circle.
First, there is a ranking function, and fans pay to vote for their idols; second, it can quickly establish a core fan circle. One person can buy multiple keys, and core fans quickly raise the threshold of the circle to ensure that they are the closest group to the idol, but make it difficult to expand this core circle.
This is the most promising social application direction of Web3, which can achieve large-scale user growth.
Friend.Tech is a great SocialFi app. Its business model, GTM strategy, investment background, and timing of launching Base are all difficult to replicate. However, the characteristics of the fan economy are currently limited by its simple functions and have not been fully utilized on Friend.Tech.
Friend.Tech may not be the killer app that can run Web3 social networking, but it has set an example for the social track on how to acquire and retain real users in a Ponzi scheme.
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