Base, which was mentioned in the previous veDAO Research Institute article, has recently become a new hot spot: a SocialFi DApp called Friend.Tech has triggered a new wave. Since the establishment of Base, a total of $175 million in cryptocurrencies have been transferred to the platform, and nearly 580,000 transactions were recorded on August 10. On the same day, the number of Base daily active users hit a record high of 136,000. All this is mainly due to Friend.Tech, a Base native Web3 social DApp that is only open to invitation.

With revenue exceeding $500,000 in two days after launch, Friend.Tech has become the hottest Socialfi project in the Base ecosystem through the same "one for three" invitation code mechanism as Clubhouse, and is also a Web3 project that has received a lot of attention recently. According to the CryptoKoryo data panel, as of 20:30 on August 19, in about 10 days since its birth, friend tech's transaction volume has exceeded 11,000 ETH, the number of independent users has exceeded 39,000, and more than 518,000 transactions have been completed. The Paradigm effect is also strong enough. After the announcement of the financing, friend tech's active users grew rapidly, with more than 1.7k buyers per hour, setting a record high. In this article, let's learn about Friend.Tech together.

What is Friend.Tech?

Friend.Tech is a DApp based on the Base ecosystem. Through strong binding with Twitter, users can buy and sell any user's "shares" on Friend.tech through the Ethereum of the Base chain. Investors of KOL shares will obtain the right to communicate directly with KOLs. It allows users to buy and sell shares of related Twitter accounts. Owning shares of a KOL will authorize users to enter the KOL's private chat room.

The essence of Friend.Tech is to invest in the influence of KOLs and is a KOL tokenization project. It is equivalent to Friend.tech issuing coins for KOLs, which are personal IP tokens; in this way, the value of KOLs is monetized, which can also be regarded as an attempt to quantify social value.

According to Dune Analytics data, within less than 24 hours after the launch of the beta version, Friend.Tech brought in 7,860 users, 4,400 Ethereum (US$8.1 million), and more than 126,000 transactions, far exceeding OpenSea's transaction volume in the same period; on August 10, Base's daily active users reached a new high. Friend.Tech broke through 1.8 accounts within 4 days of its launch, with a weekly transaction volume of 6,900 ETH and Share's royalty income exceeding 300 ETH.

Background of Friend.Tech

Racer is one of the founders of Friend.tech. He previously created TweetDAO, a DAO organization that grants access to its Twitter account by holding its NFT called the "TweetDAO Egg."

Later, Racer and Shrimp, another co-founder of Friend.tech, created Stealcam, a photo sharing app based on the Arbitrum ecosystem. In Stealcam, users can upload pictures, which will be mosaiced and require other users to steal (open the picture) to view the original picture. Each steal will increase the price according to the rules. This design combines curiosity, celebrity effect, Twitter communication and owner economic model, giving the project itself a high-intensity self-communication attribute.

Eventually, the developers decided to reposition Stealcam and created a project called Friend.tech. Shrimp and Racer originally planned to deploy the project on Arbitrum, but perhaps based on market popularity, they eventually chose Base; thus, the popular Friend.tech was born. Friend.tech goes a step further than previous products, combining social attributes with cryptocurrency. In this way, KOLs and ordinary users on Twitter can build social tokens to monetize.

How does Friend.tech work?

Each user who registers on Friend.tech needs to link their account with Twitter. In this way, the user's Twitter account will be quantified as social tokens on Friend.tech, and other users can buy shares of these tokens with ETH, which represent the user's equity in popularity and interaction on Twitter.

Similar to other digital assets, the value of these shares fluctuates. Let's say you buy a user's shares at a certain price, and then the floor price (minimum price) for their shares increases shortly afterwards. You can choose to sell your shares at a higher floor price, potentially making a profit. Conversely, if the floor price is lower than what you paid for it, you can choose to hold on or sell at a loss. All transactions are recorded and viewable on-chain. Whether buying or selling, each transaction will have an additional 10% fee added to it: 5% goes to the protocol, and the other 5% goes to the stake holder who is trading.

@functi0nZer0 tweeted about Friend.tech’s stock price pricing model (which has yet to be officially confirmed), which reveals that it is a simple supply and demand structure. The quadratic relationship between the number of shares held by an individual and the price of the next share is determined using a quadratic relationship, with the price of each share “changing exponentially” as the number of buyers increases. The formula is: Price in ETH = Supply ^ 2 / 16000. *Where Supply represents the current number of shares owned by an individual. Points incentive is an important means for friend tech to transform Twitter users into core users of the application. It uses potential token airdrop expectations and provides tangible points to motivate users. Friend Tech will distribute a total of 100 million points during the next 6-month test period, once every Friday, and the points record will not be uploaded to the chain. On August 19th, friedn tech completed its first points airdrop.

How to use Friend.Tech

1. Access platform

First, open the friend.tech website on your phone's browser. Once you're on the website, tap the "Share" button on the browser menu; then select the "Add to Home Screen" option. Then open the friend.tech app on your phone's home screen.

2. Register and fill in the invitation code

  • After opening friend.tech, register (you can log in through Google or the App Store). After registration, users need to fill in the invitation code to obtain full access. Users usually receive three invitation codes that they can share with others.

  • Set up your account

After filling in the invitation code, users need to bind their Twitter and deposit 0.01 ETH of Coinbase's Base chain into the address to activate the account. You can go to the official Base cross-chain bridge, connect your wallet and transfer your mainnet ETH to the Base chain. Once you have ETH of the Base chain in your account, you can receive your 3 invitation codes.

3. Buy shares and chat

  • After entering the App, you can see the most popular users on the homepage and buy their shares. You can also search for users you are interested in and buy their shares. Before purchasing, a lock icon will appear on the chat interface after clicking on the user, prompting the user to purchase shares. Once the purchase is completed, you can have a one-to-one chat. In order to prevent spam, each holder of Friend.tech can send three messages, then wait for the other party to reply and reset the limit.

  • withdraw

If you have successfully earned money and wish to withdraw your funds, tap on your profile within the app to withdraw your ETH to your own address. Use the Base cross-chain bridge to transfer your funds back to the mainnet for further use or trading.

Issues to watch out for

Although Friend.tech has experienced exponential growth in the 24 hours since its launch, many crypto KOLs have begun to profit, and its popularity and discussion remain high, some people have expressed concerns about the platform's pricing model and data privacy.

Friend.tech’s PC website currently guides users to download the app using their mobile devices. This website, which consists of only one page, contains very little information about the project, including the project’s roadmap, founders, or white paper, which are common information for Web3 projects. The privacy policy link displayed on the page only displays “Coming soon!” after clicking on it.

At the same time, Friend.tech's user experience is not friendly. On the first day, the App experienced network failures due to the influx of users. More and more KOLs registered on the platform, and many users complained about delays and app crashes. In fact, rather than being a new social product, Friend.tech is more like a variant of NFT gameplay, and the logic behind it is actually the logic of NFT holding: users are optimistic about a certain KOL, believe that the KOL's views are helpful to themselves, or that the KOL community is active and its share will rise in the future, so they will choose to hold it. But this means that how to screen high-quality KOLs has become the most critical decision-making consideration for users. Just like choosing the right target from the countless NFT products on Ordinals, users in Friend.tech must first know which accounts on Twitter are active and which accounts can easily pull up a community. This requires users to observe the reading volume of Twitter KOL tweets in advance for analysis. It is worth noting that at present, Friend.tech is mostly dominated by European and American KOLs, and Chinese KOLs are relatively weak. After a simple screening, after selecting high-quality KOLs, users still have to identify which KOLs are willing to operate Friend.tech for a long time and which KOLs are just here to join in the fun and leave. In general, Friend.tech has given users' attention a cost in disguise. If you want to get more high-quality information, you need to invest equivalent assets. But each user's attention is very limited. If you pay too much attention, it will lead to deviations in industry judgment. Therefore, Friend.tech itself has an upper limit on user attention, which has become the development line of the Friend.tech product itself to some extent.

Conclusion

The SocialFi track has been continuously watched by the crypto world, but no leading project has emerged so far. Will the popularity of Friend.tech make the concept of "Web3 social" and related projects popular again? Will Friend.tech be a short-lived hot spot or will it achieve long-term success? This question still needs time. Like any Web3 innovation, the future of Friend.tech will depend on its ability to adapt, develop, and continue to provide value to users. The delicate balance between social interaction and investment potential may play an important role in determining its longevity.

Reference: @functi0nZer0 speculated price function source: https://docs.google.com/spreadsheets/d/1AW6by8ZXqD1vV3z4TfC8N7SZwt8RD-lFT-G9_hGMdPk/edit#gid=0

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