Research Summary

Folius Ventures has conducted an analysis of Friend Tech, a company that currently only engages with Paradigm for venture capital. The report highlights the company’s growth through strategic collaboration and rapid iteration, its potential for at least two more DAU peak surges, and the need for a continuous payment mechanism. The report also discusses the risk of KEY being classified as a security and the possibility that the company might not issue any tokens.

Key Takeaways

Friend Tech’s Development Journey

  • Addressing Industry Pain Points: Friend Tech has filled a market gap in the Web3 community by enabling direct payment to industry individuals with high cognitive and money-making abilities.
  • Overcoming Cold Start: Friend Tech gained initial traffic by directly paying Twitter KOLs cash and giving homeowners a share of the profits from users purchasing Keys.
  • Paradigm’s Secondary Rocket Boost: News of Paradigm leading the investment laid a strong foundation for Friend Tech’s development, reducing the risk of abandonment and boosting users’ willingness to use and invest.

Friend Tech’s Points System and Airdrop Expectations

  • High Potential Return Rate: Holding Keys and commenting are currently the only means to gain exposure to Friend Tech, offering a high potential return rate.
  • Anticipated Token Issuance: The current hype around Friend Tech is due to its anticipated token issuance, with every 1 point potentially converting to an airdrop token worth between $1 to $5.
  • Opportunity for Retail Investors: Friend Tech is currently declining to engage with any VCs other than Paradigm, presenting an opportunity primarily for retail investors and secondary funds.

Product-Market Fit and Revenue Issues

  • Quick Realization of Reputation: For the average professional, a quick realization of reputation can result in short-term gains of $1,000 — $10,000.
  • Continuous Payment Mechanism: Friend Tech must introduce a continuous payment mechanism, as a decline in KEY + token prices in subsequent cycles and users abandoning the platform could trigger a death spiral.
  • DAU Peaks: Given strong execution, Friend Tech might still experience at least two more DAU peaks.

Actionable Insights

  • Maximizing Points: To maximize the acquisition of Points every week, the product should be opened frequently, and voices should be raised in one’s own and other groups.
  • Improving Product Fluidity: Friend Tech needs to significantly improve product fluidity to retain users and ensure a smooth experience.
  • Addressing Risks: Friend Tech faces several risks, including the risk of premature collapse if the product doesn’t break into the mainstream, high transaction fees, and the significant risk of KEY being defined as a security in terms of regulation.

Related Research