Author: Sukie.eth
The fundamental way to trap users is to improve the efficiency of establishing relationships of interest.
A social product needs to exist for a long time to give users a reason to be trapped in your system.
Before we get into the specifics, let’s review how the (3,3) and ve(3,3) flywheels used by large-scale Ponzi schemes work:
- Delphi Digital Came for technology, left behind Friend Tech. Is there still something worth looking forward to?
- Delphi Digital Came for the technology, left for the friends. Is Friend Tech still worth looking forward to?
- Is the Metaverse still far away? Meta instances reveal that VR and other technologies have already penetrated various industries.
First is (3,3). OHM uses a classic case in game theory called the prisoner’s dilemma, which is a type of non-zero-sum game in game theory. Simply put, when users choose either (stake, stake) or (bond, bond), the bubble will grow larger and larger.
Then there is ve(3,3), which is a combination of Curve’s ve (vote escrow) model and OlympusDao’s (3,3) model. ve refers to the CRV token that users can lock by pledging, allowing them to receive a share of Curve’s transaction fees, boost LP profits, vote for projects, and receive airdrops of other partner project tokens, etc. ve(3,3) adjusts the token issuance by locking the quantity of tokens to encourage everyone to lock their tokens, preventing dilution of token value (the founder AC has already run away).
Now let’s go back to the economic model of FT. The pricing formula for FT shares is each share price (ETH) = (supply^2) / 16000.
To explain this formula simply, the square of the total share quantity represents the market value of KOL. For example, if you have 10 holders, your market value is 100. After dividing by 16000, the price of one Key is 0.00625 ETH.
We can see that this is a typical prisoner’s dilemma problem.
As the number of supply increases exponentially, when the 10th person buys in, the first buyer earns 100 times. When the 100th person buys in, the 10th buyer earns 100 times.
There is always a price difference in buying and selling, with the price difference being (2n + 1) / 16000. This formula indicates that as n increases, the price difference will increase linearly. For every unit increase in n, the price difference will increase by 2/16000, which is 0.000125.
Therefore, selling is a typical weak equilibrium behavior (-3,-3).
So, let’s take these two models as an opportunity to explain how a FT blogger can turn themselves into a Ponzi model.
Actually, the core of a Ponzi scheme is a few things:
1. Persuade holders not to sell tokens through game theory, incentivize users but encourage them not to cash out rewards. Find ways to lock tokens or delay user selling, keeping users trapped in the system and reducing selling pressure.
2. Create a frenzy to increase influence, achieve early network effects through word-of-mouth, and continuously attract new members and external funds.
3. Create income cash flow, incentivize users, and achieve positive externalities.
I have always said that we should not underestimate Ponzi. The ideal form of Ponzi is actually a win-win situation, which is Nash equilibrium. The premise is that the speed of positive externalities catching up with the speed of new recruits slows down.
This is how the FT group is designed:
1. Establish rules, incentive mechanisms, and ranking systems:
a. Users must purchase the Key of this KOL to join the group. After joining the group, they need to leave their Twitter account, introduce themselves, and promise to never sell and be a family with everyone. The KOL will reply to the user and make their message visible to everyone. Other members in the group will follow their Twitter account/purchase their Key.
b. Design incentive mechanisms to provide users with more benefits without leaving the group, such as 1) gaining attention from other users in the group, self-promotion, and obtaining social value from the community; 2) obtaining high-quality alpha information from the group; 3) upgrading within the group, negotiating cooperation with the community to obtain whitelist status, airdrops/advertising, and other benefits.
c. Establish a ranking system and create a sense of community identity.
Regularly elect managers for the community, setting 10% of the members as administrators responsible for maintaining an active community atmosphere, organizing activities, attracting new members, etc.
The group owner distributes a portion of the transaction fees to a small number of people in the group as incentives, triggering competition.
Make everyone feel a sense of presence in the community, for example, electing high-quality content produced by group members every day, releasing it to the outside, attracting new members, and giving everyone a share of the profits.
d. Inviting someone to join the group will unlock new privileges.
2. Establish a punishment mechanism other than 0.000125:
a. Sellers will be publicly exposed, and everyone will unfollow the seller’s account on Twitter and write words like “shame on you”.
b. For each person who leaves, the group owner will use the transaction fees to repurchase and encourage group members to buy together. By increasing the price together (3,3), it will make it more costly for sellers to join the group.
3. Create a VE model for the community and seek external benefits for community dividends:
a. After the community grows, it can host AMA sessions with project parties.
b. Determine the direction of future profitability for the community through voting.
c. Moral lock-up, where each user promises not to sell at a certain point in time.
d. Repurchase using transaction fees.
If we look at the mechanism, I am inclined to focus on the number 16,000. That is, if more group members choose to lock up their assets, the divisor of 16,000 will decrease. (Just a small inspiration, I don’t know what will happen.)
According to this model, we will obtain a profit matrix for Friend Tech:
In this matrix, if all users choose not to sell, the community will grow, and each user will receive exponential returns (+3, +3). However, selling the Key will result in a penalty of 0.000125.
In fact, I have seen many people criticize FT for not having a social graph and having no content, and only being a Ponzi scheme. The previous introduction of Thread by Facebook and the short-lived Nostr Damus all illustrate one truth: short-term traffic input cannot sustain a social product.
What is the fundamental reason for a social product to exist in the long term?
It is to give users a reason to be trapped in your system.
The fundamental way to trap users is to improve the efficiency of establishing relationships of interest.
For example, the social app Taobao connects merchants and users.
So what are users looking for in Friend Tech? I think besides the so-called airdrop expectations, there is also the opportunity to communicate with top users. This is similar to the essence of some high-end communities, MBA classes, and paid communities, which is to say that I have the people you want to know here, and you just need to pay to have a conversation with top KOLs. And if you come late, the price will go up.
What about you? Are you afraid of missing out (FOMO)? After all, going to Singapore to attend Token2049 will cost a few thousand dollars in travel expenses. This small E is definitely worth it.
How to achieve the early launch of a social product? Who says using Ponzi is not a good way?
Of course, I also think that there are obvious flaws in the design of this economic model by Friend Tech:
1. The sell-out is arbitrary, and when the value goes up, the buying pressure decreases, making it difficult to prevent subsequent selling pressure.
2. Other people cannot see the comments of others unless the group owner replies, which reduces the sense of community existence and reduces stickiness. It is difficult to classify users within the group. The group owner becomes a super node facing a large number of users. If there are more than 100 people, the group owner is powerless to manage. Without user classification and user management, the group will die. Because the inflow of top users and the socialization of mid-level users have been proven to be effective social software operation systems, but Friend Tech seems to be a one-to-many relationship, and many ordinary users are silent and find it difficult to gain attention. It is difficult to achieve sustained growth.
3. The functionality is single and cannot accumulate valuable content, making it more difficult to expand social functions such as red envelopes/voting/greetings, etc.
4. Because compared to traditional social media, there are functional and product flaws, it is difficult to expand external users except for degenerate users in the cryptocurrency circle, and subsequent growth is weak. The story cannot be told.
So currently, it is only supported by the expectation of token issuance. I don’t think there are any other methods to continue to motivate the project after the token is issued, unless it becomes like Curve.
The problems that need to be urgently resolved at the current stage:
1. Add lock-up function, such as locking up keys, which allows free speech in the group without the group owner’s reply.
2. Grant corresponding privileges based on the lock-up period to unlock more functions.
3. Develop a multi-chain ecosystem, no longer using ETH for payment, but instead use other currencies or even develop traditional knowledge planet models, advertise, and attract external funds. Of course, from the perspective of the interests of the Base chain and ETH, this matter is not of high priority.
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