Tokenization Social Web: The Rise and Challenges 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 in beta version on August 11, 2023, with an invitation code mechanism, and within two days of its launch, it generated over $500,000 in revenue, making it the hottest SocialFi project in the Base ecosystem.

According to the data panel, as of August 19th at 20:30, Friend.Tech has exceeded a trading volume of 11,000 ETH in about 10 days since its inception, with over 39,000 independent users and more than 518,000 transactions completed.

The Operating Model of Friend.Tech

Friend.Tech tightly binds with Twitter, allowing users to buy and sell "shares" of users on the platform through Ethereum on the Base chain. Owning shares of a certain KOL grants access to that KOL's private chat room. This model enables users to earn income through social influence while also participating in the social value of other users.

KOLs can issue tokens for their personal IP, 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 directly converse with the KOL. This is essentially an investment in the KOL's influence, realizing the monetization of KOL value and the quantification of user social value.

The Business Model of Friend.Tech

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

1. Share Growth Model: Share price (ETH) = (Total shares^2) / 16000. This model reveals a simple supply and demand structure, where the price of each share changes "exponentially" as the number of buyers increases.

2. Points Incentive: Friend.Tech plans to distribute a total of 100 million points during the 6-month testing period, distributed every Friday to attract and retain users.

During the trading process, Friend.Tech charges a 10% fee on each transaction of group shares, of which 5% is allocated to the holders of the shares being traded, and the remaining 5% goes to the platform's revenue.

The Future and Challenges of Friend.Tech

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

1. Potential legal risks: Due to its nature of group founders issuing tokens through fans, this may pose legal risks in certain regions.

2. High barrier to entry: As the floor price of popular group shares rises rapidly, the cost for newcomers to join becomes increasingly high.

3. Low liquidity: Although users are given the option to "trade coins and buy coins", participation may be limited due to high entry costs, resulting in low liquidity.

4. Insufficient information transparency: Currently, there is very little information about the project, and the website lacks common information such as the project roadmap, founders, or white paper.

5. Data privacy issues: Due to the strong binding with Twitter, users' data privacy may face risks.

Conclusion

The SocialFi sector has attracted significant attention in Web3, but a true leading project has yet to emerge. The popularity of Friend.Tech has brought new heat to the concept of "Web3 social," but whether it can become an industry leader or is merely a flash in the pan remains to be seen. Regardless, the emergence of Friend.Tech offers a new idea and possibility for tokenization of social networks, and its development trends are worth our continued attention.