Author: Jill, LD Capital
1. Introduction
Friend.tech is a decentralized social platform built on the second-layer network Base chain launched by Coinbase. It obtains users’ Web2 identities through strong integration with Twitter, and based on these identities, achieves the possibility of profitability. In this product, each user can be tokenized, and the user’s influence can be directly priced by the market.
2. Product
As a social application, friend.tech’s core is fan economy. Before using the app, users need to pre-deposit 0.01 E, and ETH will be used as the main payment currency within the app, used to purchase shares of other users. Shares represent the tokenization of a user’s influence, and for buyers, the purpose of purchasing shares is to obtain the permission to have a conversation with the user being purchased (friend slot). After the purchase is completed, one-on-one chat can be initiated. In order to prevent spam messages, friend.tech allows each holder to send three messages, then wait for the other party’s reply and reset the limit.
After entering the app, users can see the most popular users on the homepage, and can also use the Explore button to search for the users they follow and purchase their shares. The initial price of each user’s share is set based on Twitter data, and there is no limit to the supply of shares. The price of shares will fluctuate with changes in market supply and demand. Therefore, the more popular a person is, the more their shares will be purchased, and the more valuable the shares will become.
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Twitter users @functi0nZer0 and @9527yyds_1 have summarized the product pricing model, and as the sale of shares increases, the price will increase exponentially.
From the following figure, it can be seen more intuitively that the slope is relatively steep, so the token price can be quickly raised to a relatively high position in a short period of time. Similarly, once someone starts selling, the price will quickly drop.
For social influencers (KOLs) whose shares are purchased, each buy and sell of their shares can earn a “subject fee” of 5%. If KOLs want to earn higher returns, their tokens need to have a higher trading frequency. According to their pricing model, the higher the trading frequency, the faster the price will rise. However, this brings a problem: because there is no value support, in the case of weak fan stickiness, personal influence tokens will quickly face the situation of “not being able to rise”. From the current trading situation of the top influential tokens within the app, there are only 168 token holders for the highest influential KOL, but the token price has already risen to 2.78 ETH.
3. Financing
Friend.tech announced on Twitter that LianGuairadgm participated in its seed round financing, but the amount of financing was not disclosed. In addition, friend.tech has collaborated with LianGuairadigm to build new online social interaction tools this year.
Source: Twitter
A Twitter user revealed that friend.tech has completed Series A financing with a valuation of $50 million. This round includes token certification, so friend.tech is likely to issue tokens.
Source: Twitter
4. Business Data
1. Users
According to the data panel of Dune Analytics, Friend.tech has accumulated approximately 626,000 transactions, with about 44,000 buyers and 16,000 sellers. After the first weekly points airdrop on August 18, the number of participants in transactions has increased significantly.
Source: Dune Analytics
From the number of transactions, it is more obvious that on-chain transactions have become more active after August 18.
2. Transaction Volume
The following figure shows the transaction data for buyers and sellers: the buying volume is 8,623 ETH, worth about $15 million, and the selling volume is 5,585 ETH, worth about $9.95 million.
From the buying and selling data, there are currently about 49,000 subjects being traded, with a buying transaction volume of 533.9 ETH and a selling transaction volume of 352.6 ETH.
3. Protocol Value
The current Total Value Locked (TVL) on the Base chain is $178 million, and the asset value of friend.tech is $6.24 million, ranking 9th on the chain, accounting for 3.5%. As a newly launched social application, its asset growth rate is relatively fast.
Source: defillama
According to the data from the Dune dashboard, friend.tech has accumulated a trading volume of 21,000 ETH, worth about $35 million. When the personal influence token is traded, a 10% transaction fee is charged, with 5% going to the buyer and 5% going to the protocol. Currently, the protocol has generated 973.5 ETH in revenue, worth about $1.63 million.
Source: Dune Analytics
Project Progress
On August 18th, friend.tech announced on its official Twitter account that it had distributed the first round of airdrops to 44,000 users. In addition, the team stated that they will distribute 100 million points during a 6-month testing phase, with a weekly airdrop on Fridays. The points will be recorded off-chain and will have special uses after the testing phase.
friend.tech stated that the airdrops will be based on user activity before Thursday each week, and the criteria will be updated weekly. Users are not recommended to use any specific methods to earn points. If any issues arise, friend.tech reserves the right to modify previously distributed points.
Based on the proportion of points in token supply and FDV, some users have made predictions about the value of points: If the FDV reaches $20 million and the airdrop accounts for 10%, the value of each point would be $0.2.
Source: Twitter
As an example, @Cobie, who currently holds the most personal influence tokens, received 1.1 million points from the first airdrop. Based on an estimated valuation of $50 million in Series A funding, if the airdrop accounts for 10%, each point would be worth $0.5, resulting in a profit of $550,000 from the first airdrop for Cobie.
Conclusion
friend.tech is a social application software that focuses on the fan economy, but its current functionality is relatively simple. The pricing model of the personal influence token indicates that its mechanism is quite FOMO-driven. With high expectations for airdrops, the current popularity is continuing to rise. The number of active addresses on friend.tech is growing rapidly, and the value of assets locked on-chain is also increasing rapidly. However, if the product fails to truly connect fans with KOLs, the growth potential of the product is limited and cannot be sustained.
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