Social networking app Friend.Tech has raked in $12 million in fees for its more than 160,000 users since its inception.
Everyone who joins the app gets their own channel where users must have at least one of their keys to access the channel. When a key is bought or sold, a 5% fee goes to the app and a 5% fee goes to the channel owner. The value of buying a key decreases or increases along the bond curve, which means that it becomes increasingly expensive to get into someone’s channel the more people there are.
Lots of revenue has been generated, especially for popular crypto influencers, some of whom have won more than $50,000 in fees, according to one report. Dune dashboard created by TK Research. Yet those who buy keys lose 10% of the cost of joining or leaving a channel, while also taking on the volatility of the key’s value. While influencers have benefited from the fees, it is unclear whether the entire system is sustainable in the long term.
“The bonding curve is definitely a bit rough and it would have been better if you could select a specific bonding curve for your audience,” says the pseudonymous crypto influencer and NFT collector known as Dingaling, who has the 13th most expensive channel on the list . app.
“The fees are actually pretty insane too. I don’t think they expected such high volumes right away,” he said. “It should remain successful until the first airdrop and token launch. I’m not sure because realistically I don’t think there’s much point in paying 10k as an entry fee to someone’s secret chat room.”
The allure of a potential airdrop has been a carrot to get people to trade keys and burn their money in fees. Some speculate that the points distributed weekly could eventually be converted into tokens if an airdrop occurs, although this has not yet been announced.
Dingaling added that its continued success will depend on how the project structures the tokenomics of a potential airdrop and token. If it continues to drive activity in the app or adds revenue sharing, users can stay engaged. Without these features it could be difficult.
Friend.Tech’s Hype Cycles
The app has seen three waves of activity in its short history so far. The latest increase increased daily fees for channel owners to as much as $2 million per day. That said, the app still hasn’t surpassed its peak of 85,700 transactions per day during the second wave of activity. Between waves, transactions and fees have dropped significantly, showing that activity on the app can decline quite quickly if users lose motivation.
Friend.Tech has seen three major waves of activity since its founding. Image: TK Research/Duin.
“I think Friend.Tech builds on the previous social token concept and further improves it by incorporating some DeFi elements such as the bonding curve that provides natural liquidity to all social tokens,” said Arthur Cheong, founder of DeFiance Capital, who launched the 19th has. most expensive channel on Friend.Tech.
Cheong added that the app works because it is a hybrid of multiple crypto elements, including yield farming, bonding curves, paid groups, ego/pride monetization, and cult-like communities.
He noted that the current design is optimized for serving superfans, and one benefit of the connection curve is that it keeps the room size small so room owners can still communicate with their keyholders.
However, he said the team needs to maintain the app’s momentum and retention rate while eliminating some drawbacks, such as people editing their own keys. Otherwise, it can be difficult to find a balance.