Research Summary
The report discusses the rise and impact of ‘Friend Tech’, a Base on-chain social application that experienced a surge in popularity, followed by a decline, and then a resurgence after securing seed round financing from crypto venture capital firm, Paradigm. The report also explores the background of Friend Tech’s development, its economic models, and the challenges it faces in the future.
Key Takeaways
Friend Tech’s Popularity and Paradigm’s Endorsement
- Initial Popularity: Friend Tech initially attracted tens of thousands of users, but its activity declined sharply after less than three days. However, it regained popularity after announcing a seed round of financing from Paradigm.
- Paradigm’s Impact: The involvement of Paradigm led to a swift increase in Friend Tech’s active user count, marking a new historical peak.
- Performance Metrics: In roughly 10 days since its inception, Friend Tech achieved a volume surpassing 11k ETH, with the number of unique users exceeding 39k and a cumulative total of over 51.8k transactions.
Friend Tech’s Development and Economic Models
- Development Background: Friend Tech was built by Racer, the chief developer of TweetDAO and Stealcam, both of which are explorations of decentralized social networks.
- Economic Models: Friend Tech’s economic model primarily encompasses the group share growth model, fee structure, and point incentives. It charges a 10% fee for each group share transaction, with 5% distributed to the group share holders, and the remaining 5% going to the treasury income.
- Point Incentives: Point incentives are crucial for Friend Tech to transform Twitter users into core app users. It plans to distribute a total of 100 million points during the test period of the next 6 months.
Future Challenges and Opportunities
- Challenges: Despite the potential of decentralized social networking, transitioning to new social platforms is costly and faces strong competition from established centralized social networks.
- Opportunities: The author believes that the private chat scenarios represented by Friend Tech possess certain objective conditions for success, especially in attracting Discord community users.
- Improvements Needed: Friend Tech needs to refine its features to enhance the user experience for its groups, as its current offerings are rather simplistic compared to platforms like Discord.
Actionable Insights
- Explore the Potential of Decentralized Social Networks: Friend Tech’s rise indicates a growing interest in decentralized social networks. Stakeholders should investigate this trend and its implications for the future of social networking.
- Consider the Impact of Financial Incentives: Friend Tech’s use of point incentives to attract users highlights the potential of financial incentives in user acquisition and retention strategies.
- Assess the Need for Feature Enhancements: Friend Tech’s need for feature enhancements underscores the importance of robust and comprehensive features in user experience and satisfaction.
