Research Summary
The report discusses FriendTech (FT), a new application built on the Base blockchain, which allows users to monetize their social interactions by selling “keys” for access to private group chats. The platform has gained popularity due to its potential for immediate monetization for influencers and speculation on a future airdrop. However, the report also highlights potential risks and challenges, including the volatility of key prices, the sustainability of the platform, and the potential impact on mental health.
Key Takeaways
FriendTech’s Innovative Monetization Model
- Monetizing Social Interactions: FriendTech allows users to monetize their social interactions by selling “keys” for access to private group chats. This model has intrinsic value, as demonstrated by the potential demand for a chat room with a celebrity or a popular crypto influencer.
- Key Pricing Mechanism: Keys are priced on a bonding curve, where the price increases with supply but also decreases as supply diminishes. This provides instant liquidity for sellers. A 10% tax is applied on key transactions, split between the room’s creator and the FT protocol.
- Popularity and Growth: FriendTech’s popularity is surging due to speculation on a future airdrop and the platform’s immediate monetization potential for influencers. This has led to widespread promotion on Twitter and rapid growth in user engagement.
FriendTech’s Potential Risks and Challenges
- Revenue Model Criticism: The report criticizes FriendTech’s revenue model, noting it relies on high turnover/volume rather than fostering loyal holders. The volatility of key prices complicates financial planning for creators.
- Comparison with Past Crypto Experiences: The report draws parallels between FriendTech and OlympusDAO, suggesting that while FriendTech may have value, it is not immune to the risks that affected OlympusDAO, such as unsustainable token emissions and dramatic price crashes.
- Impact on Mental Health: The report highlights the potential impact of tokenization on mental health, noting the struggle of witnessing one’s perceived value fluctuate in real-time. It argues that equating personal worth with financial value can be detrimental.
FriendTech’s Potential Future
- Anticipated Market Drop: The report anticipates a significant market drop of over 90%, but the timing of this downturn is uncertain. It predicts “FT-fatigue” as participation in multiple rooms becomes increasingly challenging.
- Questions about Sustainability: Critical questions are raised about the sustainability of FriendTech, its comparison to Web2 options, and whether engagement will persist without airdrop farming or in a declining price environment.
- Step Towards a Decentralized Social Finance Ecosystem: The report posits that FriendTech could be a step towards a decentralized social finance (DeSo/SoFi) ecosystem that rewards creators. However, concerns are raised about the future incentives for creators if there is no airdrop farming, speculation, or trading volume.
Actionable Insights
- Consider the Risks and Rewards of Participating in FriendTech: While FriendTech offers an innovative way to monetize social interactions, potential participants should carefully consider the risks and rewards. This includes understanding the volatility of key prices, the potential impact on mental health, and the sustainability of the platform.
- Explore the Potential of FriendTech as a Creator: Creators may find value in exploring FriendTech as a new revenue stream, especially as royalties from NFTs have diminished over the past year. However, they should also consider the challenges of financial planning due to the volatility of key prices.
- Stay Informed About the Future of FriendTech: Given the uncertainty surrounding the future of FriendTech, potential participants should stay informed about developments in the platform, including potential market drops and changes in user engagement.
