Friend.tech's social innovation strategy leads the crypto market: Can it break through the intersection of tradition and innovation under the new model?

In the dynamic cryptocurrency market, Friend.tech is rapidly attracting attention with its innovative community-driven model. According to CoinGecko data, the price of the $FRIEND token surged from $1.54 to $2.65 in a short period, with a 24-hour increase of up to 72.6%, bringing its market capitalization to approximately $227 million and ranking it at 271. Additionally, the daily trading volume of $FRIEND reached $56.22 million.

Recently, Friend.tech announced the release of its platform's V2 version and launched the accompanying BunnySwap native DEX, showcasing its technological advancements and market responsiveness. These developments not only demonstrate the platform's technical strength but also highlight its ability to build a sustainable ecosystem.
Next, this article will focus on how Friend.tech stands out in the fierce market competition.

Friend.tech in Web3 Social: From Unique Social Monetization to Top Capital Support

Friend.tech is a Web3-based social finance (SocialFi) platform that innovatively transforms users' influence on social media into tradable assets. Platform users can buy and hold other users' KEYS, which represent the right to access specific content and interact with content creators. The main features of Friend.tech include social interactions related to KEYS, such as joining private group chats, which provide direct opportunities to converse with content creators. Furthermore, all transactions occur on the Ethereum-based Layer 2 network—Base chain, ensuring higher transaction speeds and lower fees.
As the cryptocurrency market enters a prolonged bear market and the hype around gaming and NFTs gradually wanes, Friend.tech has rapidly risen in the market with its unique SocialFi model, attracting widespread attention. Here are several key analyses of the factors behind Friend.tech's success:

1. The Expansion Potential of Social Networks in Web3
   Social networks have proven their immense potential on the traditional internet. Successful cases like Facebook, Instagram, and TikTok demonstrate the strong ability of social features to attract and retain users. Attempts at social networks in Web3 projects, such as Cyber Connect, Debank, and Lens Protocol, although merely replicating existing successful social network models and adding crypto features, also show the vast development potential in the Web3 social space.
2. Friend.tech's Unique Social Monetization Model
   Friend.tech officially launched in August 2023 and experienced a surge in user growth just a week later. The core of the platform lies in monetizing social influence on Twitter into tradable tokens. Users can gain access to and interact with content by purchasing other users' KEYS, which are akin to paid subscriptions in traditional social networks. ETH serves as the primary payment currency within the application for trading these KEYS.
3. Dynamic Pricing Mechanism and Market Response
   Another feature of Friend.tech is its dynamic pricing mechanism. Through a parabolic pricing curve, represented by 𝑦=𝑥216000y =16000x 2, where 𝑦y represents the price in ETH and 𝑥x is the current total supply of KEYS. This design initially keeps KEY prices relatively low, but as purchases increase, prices rise rapidly, triggering market buying sentiment. Additionally, each transaction incurs a 10% fee, with 5% going to KOLs and the other 5% as platform revenue, effectively regulating speculative behavior in the market.
   
4. Market Strategy and Support from Top Capital
   Friend.tech not only seized the market dividends at the early launch of the Base chain but also received support from top investment fund Paradigm in the crypto space, adding extra trust and market expectations for the project. Moreover, the project's user invitation mechanism and points system are similar to other successful crypto projects like Blur, designed to incentivize long-term user participation and active trading.
   Through these innovative strategies, Friend.tech has established its position in the Web3 social space, demonstrating the immense potential of social features in driving user growth and engagement.

Friend.tech V1 and V2: Innovation Brings Growth, but High Fee Model Raises Doubts?

Friend.tech V1: Innovation and Challenges Coexist

Friend.tech V1 introduced a unique model that aligned the interests of well-known cryptocurrency figures with those of ordinary users, achieving significant growth in user base, activity, and revenue during the bear market. This alignment allowed FT to excel among new projects, becoming one of the fastest-growing decentralized social applications. However, this model also faced challenges: with transaction fees as high as 20%, ordinary users often found it difficult to profit from normal transactions, especially during periods of low activity and inflow.
During the operation of V1, despite successfully generating approximately $13 million in fees and driving trading volume to $130 million, nearly $6 million in revenue was distributed to users, the high fees ultimately became a barrier to market entry. Therefore, although V1 reached several important milestones, the high fees and unsustainable profit model limited its long-term development.

Friend.tech V2: Discrepancy Between Expectations and Reality

The long-awaited Friend.tech V2 was released on March 3, 2024, bringing many updates, including allowing users to claim $FRIEND tokens. However, this update seems to have fallen short of community expectations, primarily due to a lack of clear information dissemination and complex token claiming conditions. Users encountered obstacles when claiming airdrops, such as being able to claim only 10% of the tokens and needing to join a club to claim the remaining 90%.
The main new feature introduced in V2 is "clubs," which are community spaces owned and managed by key holders. Although the concept of clubs aims to enhance social interaction and network building, their specific application and utility remain unclear, leaving much speculation among users. Additionally, each club transaction incurs a 1.5% fee, allocated to farmers and FT, increasing transaction costs.
Despite some interface updates in V2, such as adding new elements like "farming," airdrop claiming, and rewards, questions remain regarding the practicality and long-term value of the $FRIEND token. The lack of innovative use cases and genuine expansion of key functionalities limits the acceptance and market impact of the V2 version.
In summary, both Friend.tech V1 and V2 demonstrate the innovative potential of crypto social platforms but also expose significant challenges in user experience, fee structure, and information transparency. While the release of V2 introduced some new features, it seems to have failed to adequately address the core issues of the community, which may affect its continued success in the increasingly competitive Web3 social market.

The Future of Friend.tech: Innovation or a Short-lived Fad?

In the wave of innovation among Web3 social platforms, Friend.tech has showcased its unique business model and technological applications. By transforming users' influence on social media into tradable NFTs, the platform creates a new interaction dimension for KOLs and their fans. Fans can purchase KOL's NFTs to gain direct communication opportunities, deepening the connection between fans and idols while creating new revenue streams for KOLs.

However, despite this model attracting a large number of users initially and rapidly increasing the platform's activity and revenue, some key issues have gradually surfaced. Especially after the launch of Friend.tech V2, although expectations were high, the actual results did not meet the community's hopes. The new version attempts to reduce reliance on KOLs through a more community-centered approach, aiming to create a more sustainable ecosystem. However, the problem arises when the value of a social network heavily depends on its users, particularly core influencers, as this dependency becomes a vulnerability.
Some features of the V2 version, such as clubs and the introduction of the $FRIEND token, were intended to enhance interaction and engagement among users, but the complex airdrop rules and technical issues significantly detracted from the user experience. Additionally, for some latecomers, high entry prices could lead to capital being trapped, increasing the platform's instability.
Considering these factors, while Friend.tech has created significant market hype in the short term, critics' voices are growing louder over the sustainability of its model. Is the market's enthusiasm merely a result of novelty and initial hype? As the excitement fades, we can't help but ask: Can this NFT model based on social influence truly continue to attract users and become the future of social media?