#227: Friend.tech: What lies beyond the speculation?

🤔 And what is TPan doing on there?

Last week I published a piece on Base’s Onchain Summer campaign and interesting projects on Base so far.

One of these projects was friend.tech (which I will refer to as FT from here on out).

I specifically wrote:

The app launched last Friday and went viral over the weekend.

Boy, was I wrong about it going viral. It actually went viral this past weekend. How viral?

Some stats, courtesy of cryptokoryo’s Dune dashboard:

• As of this writing, there have been 1.8 million cumulative transactions on FT

• From those 1.8M transactions, there has been $66 million in volume (38.6k ETH)

• The FT protocol fee structure is 10%: 5% goes to FT and 5% goes to the creator. This means FT has already earned $3.3 million (1.9k ETH) in protocol fees, and creators have earned the same amount.

• There have been over 96k unique FT buyers (wallets)

• cryptokoryo also has a great Dune dashboard focused on the top earners on FT

  • 3 users have already earned over $100k, all of them are crypto influencers/personalities

Mouth-watering numbers for any builder, even outside of web3 and crypto.

How did friend.tech even get to this point?

There were multiple catalysts that caused FT to reach this degree of virality.

Launch on Base

FT launched on Base, a newly launched Layer 2 blockchain developed by Coinbase. $253 million in crypto has been bridged from other chains to Base since its Mainnet (public) launch in late July.

So besides minting NFTs and trading coins, what else was there do to for that $253 million hanging out? Base primed the pump and FT let out some of that pressure with their product launch.

Referral mechanics

FT incorporated a best practice from the growth world by requiring a referral code to sign up. Each user started with 6 referral codes — Enough to share with a small group of friends, but not enough to toss them around like breadcrumbs to a flock of pigeons.

Last Friday FT provided 3 more referral codes, suggesting they may add more referral codes every week for users to share.

Look! An unused referral code, go get it!

Financial speculation

This is the point that everyone focuses on and understandably so. Like sharks smelling blood in the water, the crypto and NFT degens swam over to the action. This led to the first spike in volume during launch weekend, and it continues to be a primary motivator for many users.

Airdrop speculation

Adding fuel to the fire, there was additional financial speculation in the form of an airdrop. Users earn points based on FT usage and these points will be airdropped every Friday over the next 6 months.

The first point airdrop last Friday led to the beginning of the larger spike in activity we saw this past weekend.

At minimum, this incentive will create a baseline level of activity on the app similar to how Blur incentivized activity on their NFT marketplace.

VC Funding

Prior to the airdrop, FT announced seed round funding by Paradigm, a top crypto VC. This helped the app reach the broader professional crypto and web3 circles and provide some legitimacy to what the team was building.

Non-crypto natives join

As news of FT spread heading into the weekend, FaZe Banks (FaZe Clan founder and influencer) and Grayson Allen (NBA player) joined, fueling excitement that FT could reach beyond crypto natives.

Since Banks joined, other FaZe members have onboarded as well including Apex (2.3M followers) and Rain (5.3M on Youtube).

This sequence of events was a set of ingredients for a delicious viral dish. Whether the dish could be reverse-engineered into a recipe and recreated remains to be seen.

If anything, FT had folks wondering:

A Tale of 2 friend.techs

With those numbers and everyone in the space having at least heard about friend.tech at this point, the buggy app has gone through a fair amount of scrutiny. Much of it is valid.

What are some criticisms?

• No privacy policy (yikes!)

• In order to access FT, users have to connect their X account. The authorizations allow FT to tweet and retweet for you, which is generally not a good permission to approve. Fortunately, you can revoke those permissions immediately after onboarding.

• FT is a progressive web app (think a website in mobile app form) instead of a standard app you download from an App Store. PWAs bypass an App Store rules and guidelines, which may be risky.

  • On the other hand, PWAs allow for the ability to build and ship for crypto users on mobile without the hindrances and limitations that Apple has on crypto apps, not to mention the 30% fee on transactions.

• FT prices are based on a bonding curve. Each incremental ‘key’ that is purchased is exponentially more expensive with the formula price = supply^2 / 16000. Assuming each holder purchases one key (holders can purchase multiple)

  • 1st holder price to get in: .0000625 ETH (10 cents)

  • 10th holder: .00625 ETH ($10)

  • 100th holder: .625 ETH ($1,000)

  • And so on…

• If you are on FT to make money, you may lose it to savvier speculators and bots

• The UI is terrible and the app is slow. The chat rooms only allow the user to broadcast to holders in a one-to-many fashion. Holders chat with the creator on a one-to-one basis. BoldLeonidas illustrates this dynamic well.

On the other hand

I believe friend.tech is a net positive for the space and serves as a source of inspiration for builders and creators. Although it isn’t ideal, the financial speculation helps to efficiently bootstrap FT’s user base. It is now up to creators and FT team to create a product that moves past the inevitable financial spotlight (at least partially) while retaining creators and holders. Li Jin describes this well.

What are creators doing on friend.tech?

What are we seeing creators do?

Giveaways using creator trading fees earned

Giveaways of creator holdings outside of FT

Giveaways based on behavioral psychology

Info/Alpha + Direct Access

Although I’m not a holder of any notable crypto influencers, I imagine there may be valuable info being shared in those chat rooms. Additionally, there is direct access to those individuals. Instead of fighting through the DM inbox for a popular influencer, you now have direct access to them in a much smaller chatroom via FT if they’re responsive.

Another way of looking at it is It’s a financially driven variation of ‘proof of fandom’.

What is TPan doing on friend.tech?

I’m far from an influencer, but I have subconsciously been looking for a platform like FT for a while.

Here’s my backlog of topics I’ve considered writing about but haven’t due to time, interest, and prioritization constraints. These topics are in reverse chronological order, meaning these ideas and topics are several months old. Some of these are getting close to a year old! 😱

On top of that, I have a ‘Graveyard’ column, which is a long list of perfectly good topics, but were less appealing than the above sections which should mostly also be in the Graveyard as well tbh.

For me, FT solves my problem:

• I want a platform that is not public where I can post interesting content

• I want to post informal and unpolished thoughts of this interesting content. I have a presence on Twitter and LinkedIn, but word vomiting thoughts and ideas doesn’t match my tone and voice on those platforms.

• I want to create a hub for this content outside of Substack. Substack is great for my public content and friendly for the web3 curious, but I’ve wanted a web3 native platform for everything else

• I went live on FT, a token-gated chatroom in a few minutes. The hardest part (setup) was complete.

What have I done so far?

• Shared my raw thoughts about FT several days before publishing the polished piece here. The terrible formatting makes those thoughts extra raw 😂. However, it’s cool to do a raw brain dump to a small audience.

• Shared early access to other forms of content. In this case, I shared a link to a deck for a talk I had earlier today about Brands in Web3.

There is more I will be experimenting with (I went down a rabbithole testing something to no avail which is why this was sent out later than usual), that’s all I’ll say for now 🤐.

What is (probably) on the friend.tech roadmap?

As you can see with the screenshots above, if the FT UI were a car it would look something like this.

In the coming months, I would imagine feature updates might include:

• Ability to DM specific holders, or message all holders

• Add photos and videos

• Key transfers to different users

• The ability to share FT content across other social channels. This may be the original reason why the FT authentication asked for post and repost access. It was actually to create previews of FT-only content. Similar to how Substack or X premium content can have sneak peeks

• Customizability for the bonding curve (this is not possible for the current FT protocol smart contract, so not sure what they would have to do to make it more flexible) and fee rates (this is customizable on the smart contract level)

Even if it all dies down…

Rampant speculation aside, I believe friend.tech has inspired some creators and builders in the industry. Ok…just me? Hopefully not lol.

Copycats, and even potentially better versions of this app will come along and take a stab at the decentralized social puzzle. Most decentralized social apps have looked more like X, but maybe it can also look like a group chat too.