Author: Severin

TL;DR

• Fren Pet's pets can essentially be understood as mining machines, continuously extracting a portion of all players' expenditures as profit.

• Compared to friedn.tech, Fren Pet has designed more for product vitality and user retention, but the wealth creation effect of Fren Pet is significantly weaker than that of friedn.tech, which may pose a risk to user growth.

• Base and Fren Pet complement each other, and it is expected that more FrenX will explode and go viral on Base in the future.

On November 17, as soon as Base's official tweet about Fren Pet was released, it quickly ignited the community, and people flocked to this on-chain electronic pet game. A myth of wealth effect surrounding the electronic pet game quietly began.

Core Gameplay Introduction

In Fren Pet, players first need to spend 100 $FP to mint an electronic pet. Subsequently, players need to spend $FP in the shop to purchase various foods to reset the pet's death timer, avoid pet death, and increase pet points. Each pet can get a free spin of the wheel once a day, with a chance to win points, shields, insurance, and other items. Every 15 minutes, each pet can also harass other pets, with a 40% chance of defeating other pets and earning a 0.5% point reward. Additionally, players can join dice games among players to take greater risks for higher points. Finally, the pet's points will determine the distribution of the ETH reward pool; if players choose to claim rewards, their pet points will be reset to zero, ending the game.

Fren Pet's Fomo Design

From the perspective of gameplay, UI design, player interaction experience, and server quality, Fren Pet is not considered a high-quality game; it can even be described as a poorly made game. After the Base official Twitter retweeted, Fren Pet even experienced server overload due to excessive traffic, causing game interruptions. At this stage, Fren Pet relies more on its Fomo gameplay design to attract new players.

source：https://twitter.com/frenpetonbase

Gameplay:

• Not Free to Play but better than Free to Play: The premise of playing Fren Pet is that players need to spend 100 $FP to mint an electronic pet. However, whenever a new player enters and mints a pet, Fren Pet will refund the previous player's 100 $FP mint cost. From a cryptocurrency perspective, this is equivalent to Free to Play. However, from a user perspective, as long as there are continuous new players entering and spending in the game, the price of $FP is expected to rise, and players will benefit from the minting behavior, which is akin to Give to Play. This will increase players' willingness to participate, stimulate old players to mint more pets, and encourage new players to actively join. (It has now been modified so that minting a pet only requires 10 $FP, and the spent $FP will enter a multi-signature contract to be distributed to long-term active players, encouraging user retention.)

source：DEXTools

• Guide players to frequent, high spending to expand economic benefits: Food has two attributes: survival time and point yield. Generally, the more expensive the food, the higher the point yield, but the shorter the survival time. This requires players to balance between survival time and point yield. Moreover, points will be linked to player earnings. Therefore, if Fren Pet players want to obtain as much ETH reward as possible, they need to buy relatively expensive food with higher point yields. However, at the same time, such food will have a shorter survival time. This means that players aiming for high rewards will frequently purchase relatively expensive food, contributing a large amount of revenue to the game. In this process, players' investment costs will also accumulate, forcing them to continuously buy food to avoid the cost losses caused by pet death. The design of food survival times of up to 2-3 days will also enhance user interaction with the game and increase user stickiness.

• Provide users with low-cost future earnings expectations to stimulate positive social diffusion: Each pet has a chance to spin the wheel once a day, with rewards ranging from 1 point to 2000 points, and may also receive shields or other special rewards, or nothing at all. The free spin gives users a low-cost expectation of future earnings and leverages players' love for lotteries, encouraging players to continuously participate in the game and increasing the frequency of user interaction with the game. Moreover, the free spin will also encourage positive social diffusion. When users win high rewards, they tend to post and share on social media, which will also bring more new traffic to Fren Pet.

source：Fren Pet

• Utilize users' gambling tendencies to enrich gameplay and improve user stickiness: Every 15 minutes, each pet can also harass other pets, with a 40% chance of stealing rewards, and the winner will receive 0.5% of the loser's points. This mechanism encourages gambling players to continuously initiate attacks to earn points from other players. At the same time, more rational players will choose to increase their pet points, adopting a passive defense posture to earn points from challengers' failures with a higher win rate. Additionally, Fren Pet has introduced a more gambling-oriented dice game, where players can use a 100 $FP paid ticket to gamble for a maximum reward of 500 $FP.

source：Fren Pet

• Claiming rewards resets points to zero, blocking mining and selling: The Ponzi model fears that early entrants will exit the game too quickly. Once Fren Pet players choose to claim rewards, their pet points will be reset to zero. This mechanism will encourage players seeking sustainable earnings to delay claiming rewards as long as possible, thus keeping players in the game and to some extent blocking the damage caused by players mining and selling to the game's economy.

Token Economics:

• Invite commissions to encourage players to promote themselves: Similar to exchange rebates, 10% of the $FP used by players in the game will be automatically sent to the referrer, which will incentivize players to actively promote and share their Fren Pet invitation codes, gaining a continuous income source from new players' spending.

• Token destruction creates future deflation expectations: The total supply of $FP is fixed, and 90% of the tokens used by players in the game will be directly destroyed, creating expectations of token deflation and encouraging players to hold and purchase $FP tokens earlier.

• Token rewards flow back to players to create future earnings expectations: Whenever a user buys or sells $FP tokens on BaseSwap, a 5% tax must be paid. When the smart contract accumulates 1000 $FP tokens from taxes, they will automatically be converted into ETH, with 2% proportionally distributed to leaderboard players, 2% to developers, and another 1% as a supplement to the $FP liquidity pool. The 2% reward flowback will serve as players' future earnings expectations, encouraging players to continuously participate in the game.

source：https://dune.com/whale_hunter/fren-pet

The Fomo game mechanics and token economic design have attracted more and more players to Fren Pet. However, this game is expected not to last, as the motivation for players to pay to continue playing does not come from the game's playability but from players' expectations of future earnings. The pets in Fren Pet can essentially be understood as mining machines, continuously extracting a portion of all players' expenditures as profit. When players' expected earnings decline, rational players will begin to flee Fren Pet, leading the game into a vicious cycle of player attrition, reduced $FP trading activity, decreased flowback rewards, and declining expected earnings, further driving player loss. If the game cannot attract players to continue paying through its playability or introduce positive external economic benefits, then Fren Pet will also face a hasty conclusion.

Comparison with Friend.tech

Fren Pet and friend.tech have quite a few similarities, even sharing a lineage in their names. Both Fren Pet and friend.tech essentially rely on users' expectations of future earnings, guiding players to promote themselves through social viral effects, triggering community Fomo, and attracting a large number of new players. Early entrants can obtain higher future earnings after new players enter at a lower initial cost, thus attracting user retention.

The difference is that Fren Pet has more unique small designs based on the gaming scenario to enhance product vitality and user retention. For example, the pet feeding mechanism will guide users to continue spending, bringing lasting revenue to the application. The wheel spin lottery and the ability to attack pets every 15 minutes will guide users to engage in more frequent interactions, enhancing user retention willingness. Additionally, the design that resets points to zero upon claiming rewards can also delay early players' premature exits.

However, the pet nurturing model of Fren Pet also somewhat limits the wealth creation effect of Fren Pet's outreach. Unlike friend.tech, which reflects massive price fluctuations through simple key trading via a bonding curve, the point growth and reward stacking of Fren Pet pets require time accumulation. Therefore, it is difficult for users to accumulate substantial wealth gains in the short term. This may also lead to Fren Pet's narrative being less attractive, resulting in insufficient appeal to users, which poses a growth risk for Fren Pet. Thus, we expect that Fren Pet will not attract a large number of users rapidly like friend.tech through exaggerated wealth effects in its early stages, nor will it lead to early user attrition and collapse due to designs similar to bonding curves. Fren Pet is more likely to remain in a lukewarm state for the long term.

Base Needs More Fren Pets

The explosive popularity of Fren Pet is certainly also due to Base's retweet. In fact, Base and Fren Pet achieve mutual success; Fren Pet needs Base for greater traffic exposure to trigger users' Fomo psychology. Meanwhile, Base also needs more Fren Pets to bring more funds, traffic, real users, and revenue to the Base chain.

Similar to friend.tech, Fren Pet relies on users' expectations of future earnings to guide users to engage in high-frequency interactions and trading operations in both gaming and social scenarios. This will bring a more prosperous on-chain user ecosystem to Base and accelerate the expansion of on-chain gas revenue. At its peak, friend.tech contributed nearly half of the daily gas expenditure on the Base chain by itself. Compared to the simple buying and selling of keys in friend.tech, Fren Pet has more high-frequency interaction scenarios within the game, such as feeding and Bonk, which means users incur more gas fees as real income for Base while frequently operating.

source：https://dune.com/whale_hunter/fren-pet

As L2s become increasingly homogenized, Base has captured a large amount of active user traffic by directing traffic to popular applications, carving out a development path different from other L2s. It is expected that more FrenX applications with Fomo attributes and high-frequency interaction scenarios will emerge on Base in the future, continuously injecting fresh blood into the Base ecosystem. While FrenX may not bring users huge wealth effects, Base is indeed the behind-the-scenes winner reaping real profits.

MT Capital

MT Capital is headquartered in Silicon Valley and is a crypto-native fund focused on Web3 and related technologies. We have a global team, and our diverse cultural backgrounds and perspectives allow us to have an in-depth understanding of global markets and seize investment opportunities in different regions. MT Capital's vision is to become a leading blockchain investment firm globally, focusing on supporting early-stage technology companies that can create significant value. Since 2016, our portfolio has covered various fields, including Infra, L1/L2, DeFi, NFT, and GameFi. We are not just investors; we are the driving force behind the founding teams.

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