Within a span of ten days, the number of active users on Friend.tech has diminished by a scale of ten, leaving players disengaged and swiftly departing once their interests have been exhausted.

DeMan
5 min readSep 8, 2023

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The rise of Friend.tech has once again made the SocialFi track the popular destination in the realm of Web3. What is the gameplay of Friend.tech? Why is it so popular? And how should one engage in the Web3 social scene that lies behind it? The following discussion will delve into these topics one by one.

In an economic downturn characterized by scarce financial resources and a larger population, the primary focus revolves around cultivating social connections swiftly and efficiently to gain popularity.

Friend.tech is a DApp based on the Base ecosystem. Through a strong integration with Twitter, it enables users to buy and sell shares of Friend.tech users on the Ethereum blockchain. Its primary functionality is similar to WeChat and Telegram group chats, but its core lies in the organic process of entering and exiting group conversations. Users have the option to join a specific group chat and acquire shares of the group by paying the base price. If they decide to leave the group chat, they can sell their held shares.

Joining a group chat not only satisfies social needs but also holds investment potential. As the number of participants in a group chat gradually increases, the total equity of the group also grows, leading to a rise in the bottom price of each share. This signifies that joining a group chat not only fulfills social needs but also enables one to enjoy investment returns. Hence, speculative users often buy shares of other promising group chats or their own affiliated group chats early on. To put it simply, the more participants in a group chat, the more valuable it becomes. This is particularly tempting during a bear market when money is scarce and people have more free time on their hands.

According to data from Dune Analytics, within less than 24 hours since the launch of the testing version by Friend.tech, it has attracted 7,860 users and generated a trading volume of 4,400 Ethereum (equivalent to 8.1 million dollars). The number of trades exceeded 126,000. In less than two weeks since its launch, Friend.tech’s trading volume has exceeded 25,633 ETH, attracting notable figures and venture capital firms to join in, highlighting its popularity.

Upon delving into the intricacies of Friend.tech, one can catch a glimpse of the profound underlying needs of both users and the market.

The name of the project, Friend.tech, strongly suggests its focus on fostering friendships. Unlike other SocialFi projects, it has also attracted a large number of users outside of established circles, demonstrating a powerful breaking-the-mold effect. Of course, this achievement can be attributed to its straightforward user interface and incredibly smooth user experience, which makes it irresistible to the vast Web2 community.

Creating a vibrant atmosphere is undoubtedly this project’s forte within the crypto community. Racer, the founder of Friend.tech, once stated that gamification is all about creating a sense of ambiance, and this statement aptly proves the game dynamics of this project. In Friend.tech, every interaction, connection, and even click can bring forth new surprises and challenges. Users not only engage with their friends but also participate in various tasks and activities to win rewards and even compete with other users. This integration of social and gaming elements allows users to enjoy the pleasures of socialization while experiencing the stimulation and joy of gaming. It is evident that Friend.tech seeks to blend gamified elements with social interaction, creating a unique and compelling social environment for users. This gamified experience resembles an adventure where each user can find their own role and story within it.

How can we imbue a product with sufficient social attributes? Utilizing the power of motivation and sharing is a tried and true technique, aiding in the rapid formation of a vast network of strangers. Friend.tech, by distributing a limited quantity of invitation codes, has successfully attracted a large group of early adopters. These loyal users further encourage their friends and family to join this platform. The phenomenal potential for exponential growth swiftly propelled Friend.tech to widespread acclaim. Furthermore, cleverly piggybacking on the influence of multiple renowned Key Opinion Leaders (KOLs) has also garnered substantial attention. Subsequently, these KOLs have promoted this exceedingly popular project on social media channels.

The rollercoaster-like market fervor inevitably prompts an examination of the sustainability of SocialFi.

As expected, Friend.tech has not escaped the fate that befalls the majority of hot projects in the cryptocurrency industry — a meteoric rise followed by a downfall. Yes, after its astounding debut, it has now left a mess behind.

Although Friend.tech set a record-breaking daily trading volume of 4000 ETH and 260,000 on-chain transactions on its second day, its trading volume took a steep nosedive after half a month. According to DefiLlama data, Friend.tech’s protocol revenue on September 1st was $60,000, a decrease of over 96% from its peak of $1.68 million on August 21st. The number of hourly active users on Friend.tech also dropped from a peak of over 4,700 on August 21st to less than 600 per hour.

As the market returns to rationality, we cannot help but ponder how SocialFi products and projects can ensure sustainability. From Friend.tech’s success, we can derive some insights, including the need for a unique and simple economic model to lower the barrier to user understanding and participation. Furthermore, it is important to incorporate a significant amount of social interaction and profit-sharing mechanisms to enable users to both have fun and earn money. Lastly, the product should provide genuine social functions, especially those tailored towards connecting with strangers.

The Variant team has delved deep into this matter, contemplating the role of speculation in social applications. This question has become particularly pertinent after the success of Friend.tech. Friend.tech’s model allows users to purchase and trade “keys,” utilizing users’ desire for economic benefits to attract their participation. However, this has raised concerns about ensuring genuine user interactions and avoiding a flood of bots and short-term users. These are challenges that Friend.tech must confront.

In fact, in social applications, speculation should be a feature rather than the core product. The primary focus of a product should be its content. When speculation is integrated into social products, its activities should complement the social experience. The monetization path for social capital varies across networks. Some networks directly bind payments to social capital: YouTube and TikTok directly pay individuals as their subscribers, views, and traffic grow. Other social networks, such as Twitter and Instagram, provide distribution tools and reward tokens to individual creators.

Furthermore, when designing encrypted social products, privacy and security considerations must be taken into account. This involves addressing various issues such as NFT identity verification, DAO governance, open-source data, and community governance. It poses a significant challenge for developers.

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