I posted some initial thoughts on friend.tech in the comments of Teng’s earlier Alpha Feed post, but resharing here for visibility with some expanded thoughts. It’s a bit of a ramble but I’m more curious to hear others’ takes on this as it continues to dominate everyone’s feeds.

For simplicity, I’ll use the term “creator” to represent any person/account with tradable “keys” (which I’m gonna call shares again for simplicity).

There are some positives and possible use cases that could spawn from this, so I’ll start there.

• One of the more obvious is the ability to bridge users of incumbent social media platforms to a web3-based product. In today’s attention economy, the masses flow to platforms where their favorite creators are (including artists, athletes, entertainers, celebrities, etc.). Think more Grayson Allen’s, less crypto-native influencers.
• As a corollary, linking Twitter accounts to on-chain addresses can create a more robust on-chain social graph that extends beyond just the relatively small crypto-native community we currently have.
• Creates another avenue for creator monetization via things like token-gated content. What starts out looking like a simple private messaging channel could quickly expand into other benefits like exclusive access to things like early product launches, premium features, or even token-gated commerce like limited merch or pre-sale tickets for identifiable “superfans”. The list of possibilities is immense here.
• Co-created products or co-authored content (i.e. hold shares of two or more names to get access to X). Similar to the previous point but multi-player style.
• New avenue for discoverability, especially among smaller lesser known creators who are SMEs in specific areas (via things like curation boards).

These are just a handful of examples – there’s plenty more. But there are also some important considerations here too – some of which are likely solvable – especially if friend.tech is more than just a flash in the pan and a product that’s here to stay.

• For starters, don’t think a one-size-fits-all bonding curve will prove to be the best model given how quickly we’ve already seen the price of some shares spike, pricing out a lot of new potential buyers (these curves are hard to scale especially if you start onboarding big influential names with much larger audiences).
• By creating an account today, the inherent expectation is you engage with “shareholders” in some meaningful way. Think most creators won’t want to maintain a private channel with shareholders because constant engagement requires a ton of work and for most is hard to sustain over a long period of time. So need more perks/benefits for shareholders beyond private groups to give creators more flexibility to create value in their own unique way(s).
• If the primary revenue source for creators is a % of trading fees then your incentive is to drive as much speculation (and turnover) for your shares to maximize your creator “earnings”. Monetizing your audience by selling your own creator shares likely won’t be received well by shareholders (and could lead to spiraling prices if sell pressure compounds). So need additional ways for creators to monetize their followings (maybe in progress already if there’s plans for their own token launch after the beta test period?).
• This is more of a personal consideration, but I don’t believe most people want a real-time price associated with their likeness, including well-known cultural icons. This can lead to negative sentiment about a creator if price dumps (or experiences a ton of volatility as most inevitably will), which can have real knock-on effects like emotional distress or just becoming a big timesuck/distraction. FT certainly doesn’t need to capture the entire TAM of social media accounts, but I am curious about how many people will actually sign-up to be “tradable” in some sense.

Playing devil’s advocate for a second, one alternative to this type of creator share model could just be issuing your own NFT collection and using that to create token-gated products or access to exclusive content (like a private group channel), given you have more control over things like supply and pricing dynamics (vs. using a pre-set bonding curve).

The move towards optional royalties may impact the tradeoffs here, but if the primary purpose of creator shares is to either 1) speculate on a person’s ability to generate demand for their shares, or 2) get direct access to the people behind your favorite social media accounts, couldn’t NFTs also provide an avenue for this?

There’s an argument to be made for the virality of FT as a possible Schelling point where the concentration of attention increases the potential distribution of all creator shares (versus trying to garner interest and demand for an NFT collection in isolation, for example). Not to mention the seamless link to Twitter accounts makes the account creation process much easier for non-crypto native folks. Simplicity often beats complexity when it comes to consumer-facing apps, so maybe that’s enough.

This does remind me a bit of the model Rally.io developed for their creator coins (CCs) in some ways. Bonding curves were at the heart of their pricing model, in part because they offered immediate liquidity at a predictable exchange rate. We did an analysis a couple years ago on their original sigmoidal curve, and one of the potential consequences was it was difficult to scale for bigger creators with much larger audiences, something adding more customization and/or an alternative linear BC can possibly help with.

There are some notable differences too. One of the biggest is how CCs were priced against RLY (not ETH), which added another layer of price volatility. Also Rally.io was originally built on its own sidechain, which fragmented liquidity for CCs. But in general, this approach has been tried in some form before, so there’s much FT can learn from trials of the past.

Again, these are just some off the cuff thoughts. Like many web3 products, friend.tech is still in its infancy, so I’m more curious to hear others’ opinions on it (comment below!).