How does Friend.tech transform social interactions into a new generation of "online luxury goods"?

Original Title: Friend.tech hints on luxury online experiences

Original Author: Hill

Compiled by: Qianwen, ChainCatcher

This article is not intended to praise Friend.tech; the author does not believe that the product, in its current form, can replace Twitter (perhaps that was never its intention). However, it does provide a shot in the arm for social media with luxury properties and may inspire the development of a new generation of online luxury experiences.

What is Friend.tech?

There is already a lot of content explaining how Friend.tech works, and this article will only address some common misconceptions I have seen in the community.

Misconception 1: Friend.tech is an exclusive content platform ------ it may seem so on the surface, but it is not the best use case in this regard. Besides continuous subscription revenue, maintaining exclusive content through other means is quite challenging. Long-term development requires the continuous production of new high-quality content. To minimize information arbitrage, maintaining a uniform user cost is essential. Friend.tech does not provide creators with continuous subscription revenue ; instead, it only allows income through transaction fees.

Misconception 2: Friend.tech is a platform for creators to gain popularity ------ yes, creators can appear on the "hot" or "trending" lists. However, as the price of keys rises, fewer users can afford the keys, which gradually reduces the audience that creators can reach, making it difficult to expand their user base.

To understand what Friend.tech really is, I want to start with the biggest difference between Friend.tech users and regular social media users. It is worth noting that Friend.tech users view the funds spent on purchasing keys as an investment rather than an expenditure. However, when they invest, they feel they are supporting creators with the full amount of their investment, rather than just the actual 5% transaction fee.

Therefore, I believe Friend.tech is a social platform with luxury attributes where users can gain opportunities for in-depth interaction with creators through investment.

• Luxury Attributes

The definition of luxury varies; some define it from the perspective of luxury products: the demand for luxury goods increases as their prices rise. Others refer to them as "Veblen goods," which share similar attributes and also affect the social status derived from owning/using the item. One very interesting phenomenon we see in luxury goods is that the price users pay far exceeds the pure utility of the product. Designer bags can hold as much as ordinary bags, but the premium of the former comes not only from its practicality but also from the identity it represents. Friend.tech exemplifies this well. The cost of buying a key is high, and as a person's key becomes more expensive, more buyers will chase the profit. This symbolizes status. Creators compare the prices of their keys with each other, and the more expensive the key is, the more bragging rights it has. People feel they have paid full price for the key, while in reality, they have only paid 5% of the total investment amount.

• Social Attributes

Friend.tech is an interesting social platform. Users can only interact with creators when they hold the creator's key. Users cannot communicate directly with other users. Creators can talk to all users. The status between users and creators is not equal; rather, creators are at the top and have access to all information, while users can only access the limited information released by the creators.

• Investment Attributes

Users do not invest X dollars once or monthly; instead, they invest 100 times X dollars. This amount is much larger, and the user's interests are closely tied to the content they invest in. This symbolizes a form of trust; if the investment makes money, users can also reduce their actual costs of using the platform.

• Opportunities for In-Depth Interaction with Creators

Connecting with creators is not difficult. Users can message creators on Twitter or leave comments under their tweets. However, establishing a deep connection with creators is a challenge. There is no guarantee that when users send messages to creators, the creators will see and respond.

Friend.tech has created such a platform. This is not the first "pay for creators' time" platform. If users want to attract creators' attention, Patreon and OnlyFans are great platforms. However, Patreon and OnlyFans are not marketplaces; creators do not have an easy way to set "appropriate" entry barriers for users, and they usually price randomly, failing to attract the right audience. Friend.tech sets entry barriers through the price of keys. Users' priority is determined by the key price, which measures the intensity of their intention to engage in dialogue with creators. Ownership of keys represents an exchangeable item that opens the right to converse with creators.

In summary, we can see the first instance of a market created based on personal social relationships. The keys representing this social relationship are both a luxury item and an investable tool.

Implications for Social Applications

1. Certain content in the social domain can be investable.

Economic activities on social or content platforms have always been purely expenditures, such as paying for YouTube Premium, WhatsApp, or SuperLikes on Tinder. They do not allow users to " invest " or " trade " any rights or items. In Friend.tech, users can invest in social relationships and trade them. This introduces a market-based pricing mechanism that can more effectively discover prices.

2. Social relationships can also have luxury attributes.

Friend.tech's product possesses high-quality social characteristics, representing a high status; as prices rise, the allure increases, and users feel they are paying not just for pure utility but also for the premium of social attributes. Essentially, users spending money on creators is an investment behavior. This kind of expenditure is merely a consumption behavior on Web2 platforms like Patreon or OnlyFans.

3. Trust between creators and users can be publicly displayed.

Comparing the Friend.tech experience with Twitter, the most important point of financializing this luxury experience is that social graphs can now be priced in the open market. On Twitter, different users have the same social graph. Creators do not know which users are more enthusiastic than others. In Friend.tech, creators can easily see who are the most early (early buyers at low prices), most "heavyweight" (later buyers at high prices), and most loyal supporters ( steadfast holders ). This brings a new sense of trust between issuers and buyers/holders.

Buyers essentially deposit their funds ****into a pool heavily influenced by the issuer, thus creating a convergence of interests between both parties. This deep trust relationship is highlighted when there is a connection of interests between creators and users. Pricing in an open market makes it even more exciting.

If you are building a social application in Web3, from a product perspective, here are some things you can learn from Friend.tech:

• Trust is a scarce resource that is undervalued/absent in Web2 social applications.
• Luxury can enhance social status, thereby driving the adoption of high-value user groups.
• Fundamentally, investment behavior is very suitable for the Web3 environment, so it is necessary to operate in a decentralized and trustless environment.

To facilitate understanding, here are a few examples:

If you are building a Web3 version of Spotify, to differentiate yourself from other providers, you should ideally offer carefully curated, exclusive music. To achieve the best curation while making the platform more participatory and engaging, you may need to incentivize members to help curate the platform and allow them to earn from the curation, thereby optimizing incentives for individuals and groups. To identify the best curators, you can track and reward specific behaviors on the platform that demonstrate breadth and depth of knowledge.

Marine Snow allows members to participate in platform building using their monthly and annual subscriptions, helping the platform curate the best music and music artists in the world while owning DCA of the platform itself. Spotify's music curation used to be a consumption behavior: users spent time listening to music. Now, it is an investment behavior, where users pay monthly for songs and musicians.

If you are building a luxury version of Bumble (an online dating app), charging $5 for more matching opportunities may not be effective. Instead, a better option is to require users to recharge based on a bonding curve of lucky points; the higher the points, the more matches and higher quality they receive.

For example, Mercurius Club* is establishing a new way to socialize with strangers, where the process of sending and receiving each message is financialized. Users are rewarded based on the ratio of received/sent messages and can invest the rewards into* social status projects. Essentially, users are not spending money to connect with other users, which is a consumption behavior. Instead, users invest their time and energy into meaningful conversations. As conversations deepen, users can better allocate rewards into social status projects, thus gaining more "conversation investment opportunities."

If you are building a Web3 advertising platform that requires users to spend time watching an ad and wait for conversion rates, it will not surpass Twitter ads. Instead, giving users a meaningful expected return for their time spent watching ads may be a unique Web3 way to acquire customers.

For instance, Vessel is a platform that allows users to collect NFTs from any branded content on the platform. This includes minting from branded articles or events. Users' "time-consuming behavior" is no longer just spending time reading content; it has transformed into a "time investment," where they invest their time into "collecting" content, which may later yield returns in upgraded interactions with the brand. This makes watching ads truly meaningful.

All of these cases can transform consumption behavior into investment behavior. This helps establish trust through ownership and build social status through holding luxury items.

The achievements of Friend.tech have inspired us greatly, and we hope to see more innovations in online/on-chain luxury experiences.

Note: Contributors to this article also include the author's friends and key holders on Friend.Tech, as well as Siddharth from Superscrypt, Hongyu from Mercurius Club, Tony from Marine Snow, and Steph from VESSEL.