The Rise of Tokenization in Social Web: Can Friend.Tech Become the Leader in SocialFi?

Friend.Tech, as a decentralized social network (DeSo) based on the Base ecosystem, allows users to achieve the tokenization of the social network by buying and selling "shares" of any user on the platform. The project was launched on August 11, 2023, in an invitation-only beta version, and within just two days of going live, it generated over 500,000 USD, making it the hottest SocialFi project in the Base ecosystem.

According to relevant data, 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 more than 518,000 transactions completed. This article will delve into the operational mechanisms of Friend.Tech and its potential impact.

The Core Concept of Friend.Tech

Friend.Tech allows users to buy and sell "shares" of any user on the platform using Ethereum on the Base chain through a strong integration with Twitter. Owning a share of a certain user will grant access to that user's private chat room.

This model is essentially an investment in the social influence of users. Key Opinion Leaders ( KOLs ) can issue personal IP tokens, and fans can purchase the corresponding tokens to enter the KOL's private community, thereby gaining the right to have direct conversations with the KOL. This process realizes the monetization of KOL's value and the quantification of users' social value.

Operating Mechanism

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

Users can freely choose to join groups by paying the corresponding base price of the group to acquire shares and join. Joining a certain group represents an investment in that group and its leader, so users often choose to buy shares in potential groups at an early stage. If they need to exit the group, they can sell the shares they hold 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 floor price also rise. The value of shares will fluctuate, and the group owner who creates the group increases the share floor price by attracting more users to join.

During the trading process, Friend.Tech charges a fee of 10% on each transaction, of which 5% is allocated to shareholders and 5% belongs to the platform.

The economic model of Friend.Tech mainly includes a share growth model and point incentives:

1. Share Growth Model: Adopts a quadratic relationship pricing, with the price per share changing "exponentially" with the number of purchasers.
2. Points Incentive: A total of 100 million points will be distributed over the next 6 months, once every Friday, aimed at attracting and retaining users.

Future Outlook and Challenges

Despite the recent strong performance of Friend.Tech, it still faces numerous challenges:

1. Potential legal risks: The issuance and speculation of fan tokens may pose legal issues in certain regions.
2. High entry threshold: The base price for shares in popular groups has reached around 2 ETH, making it expensive for users to join later.
3. Insufficient liquidity: Due to high participation costs, the user base may be limited, affecting the platform's liquidity.

In addition, the platform's pricing model and data privacy issues are also worth paying attention to. Currently, Friend.Tech lacks detailed project information, such as a roadmap, founder background, or whitepaper.

Conclusion

The SocialFi sector has always attracted attention, but a true leader project has yet to emerge. Whether the popularity of Friend.Tech can reignite the enthusiasm for the "Web3 social" concept and whether it will become an industry leader remains to be seen. Nevertheless, the emergence of Friend.Tech provides new ideas and possibilities for the tokenization of Social Web, which deserves continuous attention from the industry.