Tokenization Social Web: The Rise and Future of Friend.Tech

Friend.Tech is a decentralized social web (DeSo) based on the Base ecosystem, allowing users to tokenize their social networks by buying and selling "shares" of users on the platform. The project was launched on August 11, 2023, in a beta version with an invitation code mechanism, and it generated over 500,000 USD in revenue within two days. It is currently the most popular SocialFi project in the Base ecosystem.

According to the data panel, as of August 19 at 20:30, Friend.Tech's trading volume has exceeded 11,000 ETH within approximately 10 days since its inception, with more than 39,000 unique users and over 518,000 transactions completed.

What is Friend.Tech?

Friend.Tech is a DApp based on the Base ecosystem, which allows users to buy and sell "shares" of users on the platform through a strong integration with Twitter via the Ethereum of the Base chain. Owning shares of a certain KOL will grant access to that KOL's private chat room.

Users can earn rewards through social influence while also participating in the social value of other users. KOLs can issue Tokens for their personal IPs, and fans can purchase the corresponding Tokens to enter the KOL's private community, thus becoming investors in the KOL's "shares" and gaining the right to communicate directly with the KOL. This is essentially an investment in the KOL's influence, while also achieving the monetization of KOL value and the quantification of user social value.

Currently, Friend.Tech still participates with an invitation code mechanism. Users need to obtain an invitation code, bind their Twitter account, and inject at least 0.01 ETH into the Base network to access the application.

How does Friend.Tech work?

Friend.Tech combines the Social Web and token economy, allowing users to tokenize the social network by buying and selling "shares" of themselves and others. Users can earn profits by trading social tokens, and this model not only incentivizes users to pay more attention to KOLs on the platform but also encourages users to contribute content to become KOLs, thereby improving the quality and efficiency of the social network.

Users can choose to join a specific group by paying the corresponding base price of the group to acquire shares in the group, thus joining the corresponding group. Joining a group represents an investment in this group and its owner, so investing users often choose to buy more shares in groups they believe have potential in the early stages. If they want to exit a group, they can sell the shares they own in the group.

Friend.Tech's Business Model

The user's Twitter account is quantified into social Tokens on Friend.Tech, and other users can purchase shares of these Tokens with ETH to enter the corresponding groups. As the number of people entering a certain group gradually increases, the total amount of group shares increases, and the floor price of each group's shares also rises.

The value of these "shares" will fluctuate. The group founder attracts more users to join their group by promoting their fan Token, which causes the base price of the group shares to rise. Conversely, when the group loses its appeal, the base price of the shares will decrease accordingly.

During the entire trading process, all transactions will be recorded and can be viewed on the chain. The platform charges a 10% fee on each transaction of group shares, of which 5% is distributed to the holders of the shares being traded, and the remaining 5% goes to the platform's revenue.

The economic model of Friend.Tech mainly includes the group share growth model and point incentives.

1. Share Growth Model: The group shares of Friend.Tech start from 0, and the only variable affecting the price per share is the number of shares issued. The price per share changes "exponentially" as the number of buyers increases.

2. Points Incentive: Friend.Tech will distribute a total of 100 million points during the 6-month testing period, with distributions occurring every Friday. The points will not be recorded on the blockchain. This is an important means to convert Twitter users into core users within the Friend.Tech ecosystem.

The Future and Challenges of Friend.Tech

Although Friend.Tech has experienced exponential growth since its launch, with many early participants profiting, its popularity and discussions remain high. However, the platform's pricing model and data privacy still require vigilance. At the same time, as a tokenized Social Web, Friend.Tech has the following potential pain points and risks:

1. Potential legal risks: Due to its nature of the group founders issuing tokens through fans, there may be potential legal risks in certain countries and regions.

2. High entry threshold: The floor price of shares in top-ranking groups has reached around 2eth, which poses a high entry barrier for users joining later.

3. Low liquidity: Although users are given the choice of "trading coins and buying coins," from the perspective of the share growth model, the cost of user entry in the later stage is relatively high, the volume of users is still small, and the participating users are limited by the cost of the share底价, so liquidity may not be very high.

Conclusion

The SocialFi sector has been a focal point in Web3, but so far, no leading projects have emerged. Whether the popularity of Friend.Tech will reignite interest in the concept of "Web3 social" and related projects, and whether Friend.Tech will become an industry leader, remains to be seen.