Can Friend.tech Become Crypto’s Social Platform?
By Noah Washington September 27, 2023
- Friend.tech is a decentralized crypto social platform built on Coinbase's Base layer 2 network
- It allows users to buy "shares" in chat groups, turning social engagement into investment opportunities
- Friend.tech has seen rapid growth recently, with tens of millions in total value locked and record trading volumes
In recent years, technology has reshaped how people communicate, work and engage with the world. Amid this whirlwind of innovation, one name has been causing a stir— Friend.tech. But what exactly is Friend.tech, and why is it capturing the attention of so many?
The Friend.tech Ideology
At its core, what sets Friend.tech apart from other social platforms is its innovative use of "shares" as digital assets. These shares represent ownership, much like owning stocks in a traditional company.
At first glance, Friend.tech might seem reminiscent of familiar platforms like WeChat or Telegram groups, where users can engage in conversations within specific communities. However, what truly sets Friend.tech apart is the organic process of entering and exiting group chats, a feature that defines its essence.
Friend.tech takes pride in offering a seamless and user-friendly onboarding process. For iOS users, accessing the platform is as easy as visiting the official website and adding it to their home screens. This streamlined approach eliminates the need for third-party downloads, ensuring a smooth entry into the application.
The Friend.tech home screen. Source: James Bachini
To get started, users must acquire an invitation code and link their Twitter accounts. Once these initial steps are completed, users are required to inject a minimum of 0.01 ether (ETH) into the Base network, Coinbase's layer 2 network. This crypto injection grants users access to the Friend.tech application and all its features.
Why Friend.tech Built on Base
Base is a new layer 2 blockchain developed through a collaboration between Coinbase and Optimism. Designed as an Ethereum sidechain, it aims to provide a more scalable and lower-cost environment for building decentralized applications compared to deploying directly on the Ethereum mainnet.
One project utilizing Base is Friend.tech, allowing creators to connect with their audience through tokenized attention. A creator's influence is represented by tradable keys that can unlock exclusive benefits like private chat rooms. By leveraging Base's sidechain capabilities, Friend.tech can offer an innovative social experience with lower transaction fees.
What is truly fueling the popularity of Friend.tech is its fusion of social engagement and investment opportunities. As the number of participants in a particular group grows, and the total quantity of group shares increases, the base price of each group experiences a corresponding rise. Group members have the flexibility to sell shares if they want to leave the group - they are not obligated to hold their shares indefinitely.
Friend.tech has seen rapid growth since its launch. Recent data shows hundreds of thousands of transactions facilitated through the app, with thousands of ETH in trading volume. This success implies joining new groups early on can provide social and financial upside for speculative investors. Users often buy shares in emerging groups, especially their own, hoping for future growth.
Conversely, Friend.tech's meteoric launch was followed by an equally stunning decline. Fees topped $1 million daily in August, briefly surpassing titans like Uniswap and Bitcoin. But by August 26, they had crashed 87% to just $215,000.
Other metrics followed suit. Transactions dove 90% from a peak of over 525,000 on August 21 to a mere 51,000 on the 27th based on Crypto Koryo's data. The number of buyers and sellers also plummeted from highs of 58,000 and 27,000 to only 10,000 and 7,800 respectively by August 27.
Despite the volatility, Friend.tech can still show off upswings. Despite starts and stops, metrics from Friend.tech show growth. The ether-based market capitalization of subject trades continues to hover over 2,000 ETH per day, which shows there is a marketplace for the app - for now.
Friend.tech subject trades by ETH market cap. Source: Dune Analytics
Some speculate that users have realized that Friend.tech group chats are akin to yield farms, offering potential gains from the 5% fee earned when users buy or sell someone's "key."
Additionally, the platform has seen an influx of non-crypto figures joining, including notable YouTubers and OnlyFans creators. Friend.tech's expansion into non-crypto verticals could highlight the platform's growing mainstream appeal. Once dominated by crypto traders, Friend.tech now attracts a diverse user base looking to connect on topics ranging from sports to photography.
Not Only Survived but Thrived
Friend.tech has undoubtedly come a long way since its launch on Coinbase's Base network on August 11. Despite early setbacks and premature declarations of its demise, it has not only survived but thrived. With ongoing developments and potential future growth, Friend.tech is poised to remain a significant player in the crypto social platform arena.
However, uncertainties and opportunities abound in the Friend.tech ecosystem. Its future hinges on various factors, including the team's strategies, fee adjustments, and efforts to onboard non-crypto natives. But it is possible that Friend.tech could someday be the social platform for crypto.