What I Think About Friend.tech

Friend.tech (FT) has been gaining traction, hitting an inflection point of interest this weekend. If you’ve not been initiated yet, this is the new Web3 social app that allows you to buy and sell shares of Twitter accounts.


TVL — Doubled again in the past 24H to 3,372 ETH ($5.5M)

Transactions — Hit a new peak of 16,000+/hour on Saturday

Protocol Fees — 825 ETH ($1.3M) since inception

Some reasons:

  • Announcement of Paradigm’s investment.
  • 1st points airdrop was released. Still early: It will run for 6 months.
  • Lots of chatter by top CT influencers, who have nothing better to do in a crabby market.

My weekend thoughts on Friend.tech:

1. For a new social network to survive, it needs to enable a new set of winners to emerge on it.

Right now, top accounts are all your fav CT influencers. Understandably so because we use the heuristic that more followers = more potential buyers = higher share price.

In the coming weeks-months, I expect that to change. We’ll see lesser known accounts climb up the ladder and some will become huge. New FT features will probably help enable this.

2. It’s all about the superfan thesis.

There’s always 1% of the audience that’s willing to pay unreasonable $$$ to get greater access to their favorite stars, and we haven’t found a good way to monetize that yet. FT is one way.

3. The play: finding the arbitrage between future social capital and FT share price.

I.e., buy people who you think are going to be the stars on this new network (not Twitter) but whose share price doesn’t reflect this yet.


Example: @iam4x quickly built the most powerful FT trading tool available and token-gated it. He has 3k followers on Twitter but is #8 on the FT leaderboard with a 1.3 ETH share price.

Others that seem to be doing well: girl accounts, alpha callers.

4. Friend.tech showcases how powerful crypto is in building incentive loops, & why I’m so bullish on Web3 consumer apps taking off.

It would have been dead in the water — clunky UX, laggy, generic social app — without its promise of an airdrop & speculation.

But now it’s been able to gain early traction, which gives it an actual fighting chance at mega success. Still a huge challenge ahead IMO (I’ve been somewhat skeptical of decentralized social), but the odds are not 0%.

5. The bull case for Friend.tech is not CT adoption.

Crypto Twitter is only the sandbox: leveraging an audience that’s highly active on Twitter and familiar with airdrops/buy/sell behaviors as early adopters to test and learn.

Imagine if the big fintwit, tech twitter, etc. accounts get on board with this as an enticing way to monetize their large audiences. It could open the doors to many new folks using crypto. It has the potential to create a win-win-win situation.

6. Beyond Twitter, this could become a monetization layer for other social networks that have been struggling with this piece.

Friend.tech for TikTok, Instagram soon? Is anyone building this?

Leave your comment...

What are the the best proxy plays if the socialfi trend really takes off?

Been thinking about the potential of this too and have some initial thoughts / questions at this stage (some of which may be solvable). I'll use the term "creator" to represent any person/account with tradable shares for simplicity.

  • 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 onboard larger 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 mitigate this risk and give creators more flexibility to create value in their own unique way(s).

  • Don't believe most people want a real-time price associated with their likeness (can lead to negative sentiment about a creator if price dumps which can lead to emotional distress or just become a big distraction).

  • If the primary revenue source for creators is a % of trading fees then your incentive is to drive as much speculation (and turnover) to 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)

There are some interesting use cases that could spawn from this though:

  • Token-gated content (or exclusive access to things like early product launches, premium features, or even limited merch for fans, etc.)

  • Co-created products or co-authored content (i.e. hold shares of two or more names to get access to X). Again, likely need customizable bonding curves for these things to really scale though.

  • New avenue for discoverability, especially among smaller lesser known creators who are SMEs in specific areas (via curation boards)

I'm sure there's plenty of others, but playing devil's advocate one alternative is why not just issue your own NFT collection and use that to create token-gated products or access to exclusive content (like a private group channel) given you have more control over the supply and pricing dynamics (vs. using a pre-set bonding curve).

Could be because the virality of FT creates a 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). Not to mention the seamless link to Twitter accounts makes the account creation process much easier for non-crypto native creators. 

Anyway bit of a ramble here but wanted to spill some early thoughts.. curious to hear others' takes too

There's a few cool things about friend.tech:

  • they call it shares, not token. easier to digest for noobs
  • the CT influencers don't get any sales proceeds but the 5% trading fee. there is no individual selling shares which looks like it mitigates regulatory risk

I wonder in how far there's a new primitive in the making? The tools emerging around it are interesting

That's the thing that makes me optimistic about FT: seeing people build tools around it. Still early days but could get huge in time.

What do we think about the bonding curve, fees, spread, etc?

Do we think this is something that can gain a wider audience outside of CT given these mechanisms?

They'll definitely need to adjust the bonding curve and taxes if they're looking to expand to a wider non-crypto native audience. It's too heavy right now