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

Friend.Tech, as a decentralized social web (DeSo) based on the Base ecosystem, allows users to achieve tokenization of the social network by buying and selling "shares" of users on the platform. The project was released on August 11, 2023, in a beta version with an invitation code mechanism, and within two days, it generated over 500,000 USD in revenue, making it the hottest SocialFi project in the Base ecosystem.

According to data platform statistics, as of August 19 at 20:30, Friend.Tech has been established for about 10 days, with a trading volume exceeding 11,000 ETH, over 39,000 unique users, and a cumulative total of more than 518,000 transactions completed.

The Core Concept of Friend.Tech

Friend.Tech is a DApp based on the Base ecosystem, operating through a strong binding with Twitter. Users can buy and sell shares of any user on the platform using Ethereum on the Base chain. Owning a share of a user will grant access to that user's private chat room.

This mechanism allows users to earn rewards through social influence while also participating in the social value of other users. KOLs can issue tokens for their personal IP, and fans can enter the KOL's private community by purchasing the corresponding tokens, becoming investors in the KOL's "shares" and gaining the right to communicate directly with the KOL. This is essentially an investment in the influence of KOLs, realizing the monetization of KOL value and the quantification of user social value.

Operating Model

Friend.Tech combines the Social Web with the token economy, allowing users to earn profits by buying and selling social Tokens. This model not only incentivizes users to pay more attention to KOLs on the platform but also encourages users to become KOLs by contributing content, thereby enhancing the quality and efficiency of the Social Web.

Users can freely choose to join a certain group and acquire shares in the group by paying the corresponding base price. Joining a group represents an investment in the group and its leader, so investors often choose to buy into groups they believe have potential at an early stage. To exit the group, users can sell their held shares in the group.

Business Model

The core of Friend.Tech lies in quantifying users' Twitter accounts into social tokens. As the number of people in a group increases, the total amount of group shares and the base price of each group share will correspondingly rise.

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 treasury.

The economic model of Friend.Tech mainly consists of two parts: the group share growth model and the points incentive.

1. Share Growth Model: A quadratic relationship is used to determine the relationship between the number of shares held by individuals and the next share price.

2. Points Incentive: The platform will distribute a total of 100 million points during the testing period of the next 6 months to encourage user participation.

Future Outlook and Challenges

Despite the exponential growth of Friend.Tech since its launch, the platform still faces some potential challenges and risks:

1. Potential legal risks: As the platform essentially issues tokens and speculates through fans, there may be legal risks in certain regions.

2. High entry barrier: The share price of some popular groups has reached a high level, which may deter some users.

3. Low liquidity: Due to the high cost of user entry in the later stages, the number of participating users is limited by the base price of shares, and liquidity may not be very high.

4. Lack of information transparency: Currently, the platform lacks common Web3 project information such as project roadmaps, founder information, or white papers.

Conclusion

The SocialFi track has always attracted attention in the Web3 field, but a true leading project has yet to emerge. The popularity of Friend.Tech has injected new vitality into the "Web3 social" concept, but whether it can become an industry leader or is just a fleeting phenomenon still needs time to verify. Regardless, this innovative model that combines social networks with tokenization provides new ideas and possibilities for the development of future social platforms.