LD Capital: Analysis of the upstart friend.tech on the SocialFi track

Original Author: Jill, LD Capital

1. Introduction

friend.tech is a decentralized social platform. This product is built on the base chain of the two-layer network launched by Coinbase. It obtains the user's Web2 identity through strong binding with Twitter, and achieves the possibility of profit based on this identity. Because in this product, each user can be tokenized, and the influence of users can be directly priced by the market.

2. Products

As a social application, friend.tech's core is fan economy. Users need to pre-deposit 0.01 E before using the app, and ETH will be used as the main payment currency in the app to purchase other users' shares (Share). The share is the tokenization of the user's influence. For the purchaser, the function of purchasing the share is to obtain the permission to talk to the purchased person (friend position). When the purchase is complete, you can chat one-on-one. friend.tech In order to prevent spam, each holder can send three messages, and then wait for the other party to reply and reset the upper limit.

When users enter the app, they can see the current most popular users on the homepage, and they can also search for the users they follow through the Explore button and buy their shares. The initial price per user share is set based on Twitter data, and there is no upper limit to the share supply. The price of a share will fluctuate with changes in market supply and demand. Therefore, the more popular a person is, the more shares will be bought, and the share will be more valuable.

Twitter users @functi0nZer0 and @9527yyds_1 put together a pricing model for the product that increases exponentially as shares are sold.

From the figure below, it can be seen more intuitively that the slope is relatively steep, so the token price can be pulled to a relatively high position in a short period of time. Likewise, once someone starts selling, the price will drop very quickly.

For social influencers (KOLs) whose shares are purchased, they can get a 5% "subject fee" (subject fee) for each purchase and sale of their shares. If KOL wants to obtain higher returns, it needs its tokens to have higher transaction frequency. According to its pricing model, the higher the transaction frequency, the faster the price will be raised, but this brings about a problem: because there is no value support, when fans are not sticky, personal influence tokens Soon you will face a situation of "not moving up". Judging from the current trading situation of the top influential tokens in the app, there are only 168 KOL token holders with the highest influence, but the token price has risen to 2.78 ETH.

3. Financing

friend.tech announced on Twitter that Paradgm participated in the seed round of financing, and the financing amount was not disclosed. And, friend.tech also partnered with Paradigm this year to build new online social interaction tools.

Source: Twitter

A Twitter user broke the news that friend.tech has completed its A round of financing with a valuation of $50 million. This round has token certification, so friend.tech should be able to issue tokens.

Source: Twitter

Four, business data

1. User

According to the dune data panel, friend.tech currently has a total of about 626,000 transactions, with about 44,000 buyers and 16,000 sellers. On August 18, after friend.tech issued the first weekly Friday point airdrop, the number of both parties to the transaction increased significantly.

Source: Dune Analytics

It can be seen more clearly from the number of transactions that on-chain transactions became more active after August 18.

2. Trading Volume

The figure below shows the buyer/seller transaction data: Buyer transactions amounted to 8,623 ETH, worth about $15 million, and seller transactions amounted to 5,585 ETH, worth about $9.95 million.

Judging from the target transaction data, there are currently about 49,000 targets traded, including 533.9 ETH for buying and 352.6 ETH for selling.

3. Protocol value

The current locked asset value (TVL) of the Base chain is 178 million US dollars, and the asset value of friend.tech is 6.24 million US dollars, ranking 9th on its chain, accounting for 3.5%. As a newly launched social application, its asset growth rate is relatively fast.

Source: defillama

According to the Dune data panel data, friend.tech's cumulative transaction volume reached 21,000 ETH, worth about 35 million US dollars. When personal influence tokens are traded, a 10% transaction fee will be charged, 5% of which will be distributed to the purchased person and 5% to the agreement. The current protocol income is 973.5 ETH, worth about 1.63 million US dollars.

Source: Dune Analytics

Five, project progress

On August 18, friend.tech officially tweeted that it had issued the first point airdrop to 44,000 users. In addition, the team stated that 100 million points will be distributed during the 6-month test phase, and an airdrop will be conducted every Friday. The points will be recorded off-chain and will be used for special purposes after the test phase ends.

friend.tech stated that the airdrop will refer to the user's activity before every Thursday, and the standard will be updated every week. Users are not advised to use any particular method to earn Points. friend.tech reserves the right to amend previous point distributions if problems arise.

According to the proportion of points in the token supply and FDV, some users have predicted the value of points: if the FDV reaches 20 million US dollars and the point airdrop accounts for 10%, each point is worth $0.2.

Source: Twitter

Take @Cobie, who currently holds the largest position in personal influence tokens, as an example, and received 1.1 million points for the first airdrop. Based on the valuation of US$50 million in the A round, if the airdrop accounts for 10%, then each point is worth $0.5, and Cobie's first point airdrop made a profit of US$550,000.

Summarize

friend.tech is a social application software with fan economy as its core, and its current functions are relatively single. From the pricing model of personal influence tokens, it can be seen that its mechanism design is more FOMO. Based on good airdrop expectations, the current heat is continuing to rise. The number of active addresses of friend.tech is growing rapidly, and the value of locked assets on the chain is also growing rapidly. If you return to the social product itself, you can’t really connect fans with KOL, and the room for product growth is relatively limited and unsustainable.