Once popular, now almost nothing. How did Friend.tech rise so quickly, and why is it declining now? A bold experiment in the monetization of social influence, the founder eventually made 50 million yuan, and a large number of retail investors paid for it. Looking back on all this, we should learn from the lessons of failure.
How did Friend.tech come about?
Imagine if you could invest in your favorite influencer or opinion leader like investing in stocks. This is the disruptive innovation brought by Friend.tech. In August 2023, this decentralized social media application built on the Base blockchain was born, like a bomb detonated in the crypto world, redefining our perception of social influence.
The birth of Friend.tech is like a Silicon Valley startup script. The two protagonists - 0xracerAlt and Shrimppepe - are both "Internet celebrities" in the field of cryptocurrency and social media. Racer has participated in TweetDAO, a crazy experiment that turned Twitter accounts into decentralized autonomous organizations. And Shrimppepe has shown his skills in the Stealcam project, making "stealing" NFTs an art. The background of this duo is simply a perfect combination of innovation and rebellion, injecting an unruly soul into Friend.tech.
Attempts to monetize social influence
The core idea of Friend.tech is genius: turning social influence into tradable "Keys". Imagine that you can not only follow the creators you like, but also "buy" a part of their influence. These "Keys" are like VIP passes to the creators' private world, allowing you to enter their private chat rooms and enjoy exclusive content.
Even better, the price of these "Keys" is not fixed. They follow a pricing mechanism called a "binding curve," which is like a small stock market. As more fans buy a creator's "Key," its price will rise. This not only provides a continuous source of income for creators, but also gives early supporters the opportunity to profit from it. This mechanism cleverly combines social interaction, investment, and gamification elements to create a new "attention economy" ecosystem.
Development Events
August 10, 2023: Friend.tech is launched on the Base chain, with 136,000 daily active users on the first day.
August 15, 2023: Friend.tech announces that it will airdrop reward points to App test users.
August 19, 2023: Friend.tech completes seed round financing, with Paradigm participating.
August 30, 2023: Friend.tech disclosed platform data, with a next-day retention rate of over 75% and a weekly retention rate of over 50%.
September 14, 2023: Friend.tech protocol fees exceed 5,000 ETH, and the cumulative number of transactions reaches 4,597,737.
November 26, 2023: The Twitter account @0xRacerAlt of friend.tech founder Racer is no longer visible.
May 3, 2024: Friend.tech opens airdrop token FRIEND for redemption.
May 4, 2024: Friend.tech officially releases version V2.
June 11, 2024: Friend.Tech’s multi-signature address transfers 2,809 ETH to Coinbase.
June 20, 2024: Friend.Tech said it would prepare to launch Friend Chain, but later deleted the tweet.
July 9, 2024: Friend.Tech’s daily active users hit an all-time low.
September 8, 2024: Friend.Tech issued an announcement, announcing that the project management and ownership parameters have been set to an Ethereum empty address of 0x000...000, which locks the current system and prevents further changes, meaning that Friend.Tech has given up control of the smart contract and the platform has been basically shut down.
Popularity reasons
Several factors contributed to Friend.tech’s initial popularity:
1) Innovative monetization models*
The token design of friend.tech is the most important factor for its success. As mentioned earlier, when users buy the KOL's key, they can get the KOL's private chat room and exclusive content, which makes people feel that they have scarcity. And as the influence of the KOL increases and the number of purchasing users increases, the price of the key will also increase, which has a money-making effect.
When friend.tech initially conducted an airdrop, it had the expectation of a new narrative, a large user base, and investment from a well-known VC, all of which made users place a high value on its market value.
The money-making effect + the expectation of a large airdrop attracted a large number of users in the early stages.
2) Grasp the core points of traffic
friend.tech captures KOLs who are influential on Twitter. Friend.tech strategically attracts social media influencers, especially in the fields of cryptocurrency and e-sports. By allowing these influencers to monetize their presence on the platform, for KOLs, the growth of key can also bring users to themselves while also bringing their own profits.
Friend.tech created a strong reason for them to join and promote the app to their fans. This influx of well-known figures not only attracted their existing fan base, but also strengthened the credibility and appeal of Friend.tech as a new social media space.
3) Traffic support from the initial stage of Base
As a new application on the Base network, Friend.tech benefits from the existing user base associated with Coinbase and interest in decentralized applications, further enhancing its visibility and appeal.
The main reasons for failure
As the saying goes, success and failure are both due to Xiao He, Friend.tech also suffered the backlash of the token economic model.
First, keys can be seen as tokens with low circulation market value. This attracts a large number of speculators to grab the kol's keys in the early stage, and the price continues to rise after the real kol users buy it, and investors will make a profit. The price difference can be as high as dozens of times.
Secondly, for stable KOLs, the price of the key is often hyped up, which limits the large number of users who join later.
Then, some KOLs who are just looking for novelty will hardly have the motivation to maintain users, resulting in user loss.
The second biggest reason for failure is that the project owner makes too much money
It is usually not a good thing for a project to make a lot of money in the early stage. Just one month after the launch, Friend.tech's protocol fee exceeded 5,000 ETH, and finally reached 50 million US dollars, not including the sale of their tokens. So as early as November 2023, the Twitter account @0xRacerAlt of friend.tech founder Racer could no longer be displayed.
Making too much money too early will make the team lose motivation and start enjoying life too early.
In summary, Friend.tech, as an innovative decentralized social media platform, was a bold attempt. With its unique monetization model and redefinition of social influence, it attracted a large number of users and investors in a short period of time. However, with the rapid development of the platform, the drawbacks of its token economic model gradually emerged, and speculative behavior and high entry barriers led to user loss. At the same time, the project party's premature profit also weakened the team's continued motivation, and eventually led to the closure of the platform. The rise and fall of Friend.tech provides valuable experience and lessons for future decentralized social platforms, reminding us how to balance user experience, economic models and long-term development strategies while innovating.
