TL;DR
The app Friend.tech has only been on the scene for about three weeks and has been a breakout application that attracts people from outside crypto. More than 100 thousand users have been trading shares in each other. The fact that the app is another way of ‘financializing’ traditional stuff – in this case social relations – has met criticism. Other points of critique are that the app is not user-friendly and infested with trading bots. Still, there are things to be said about the underlying business model. Is Friend.tech a new crypto primitive, a new proof-of-concept?
Although the name contains the word Friend, a more apt name currently would be Influencer.tech. The follower base of influencers can buy shares (called keys, maybe to appease Gary Gensler but also because they don’t come with voting rights) to get into direct touch with them, in a chat room. Indeed, it’s not surprising that the accounts that have gained traction are accounts from people who already have large Twitter accounts. There is just more liquidity for those ‘shares’. For a while, Cobie (Jordan Fish) was the influencer with the highest share price: roughly 5 thousand dollars at the peak.
But it’s not just crypto influencers who are joining. Like with NFTs back in the heydays of the bull market, this app is leaking into the mainstream. NBA players and Only Fans creators are jumping in. There are talks about an airdrop. Read more about this in premium investor report 246.
Let’s take a step back and look at what the app is like.
How Does it Work?
First of all, Friend.tech isn’t really an app in the app store. The creators worked around the Apple app store requirements and the 30% cut Apple would demand. So the interaction happens through a web page on your mobile.
These are the steps (this is no endorsement of the app, there are some issues).
- Go to Friend.tech in the Safari browser of your iPhone and bookmark this webpage on the home screen of your phone. Sign up with Google, preferably.
- You need a referral code, so basically you must be invited. This is a major bottleneck.
- You connect your
TwitterX account, so that you can bootstrap your twitter network to bootstrap your social graph on friend.tech. This is a step that, understandably, not everyone is willing to take. - You get a Base (Ethereum Layer 2) address and send some ETH there (at least 0.01 ETH).
- You buy your first share/key of yourself and that opens up your ‘room’.
- People can buy keys of you and unlock your room and chat with you. More and more ways to provide content to users are added.
- The more keyholders you have, the more shares are issued. But it doesn’t dilute the price. Instead, the base price for new members rises.
- Existing holders can opt out of the ‘room’: their shares are burned, and they get the current price in ETH back.
Of each transaction 10% in total is taxed. 5% goes to the platform and 5% to the influencer.
What is cool from a technical and fundamental perspective is that these shares or ‘keys’ can be plugged into the rest of defi. You could for example make ERC-20 tokens of the keys. In that case, ‘you’ can be traded on the vast defi market.
Very cool, or very creepy? The impression below by famous artist Beeple envisions the creepy…
Erik started as a freelance writer around the time Satoshi was brewing on the whitepaper.
As a crypto investor, he is class of 2020. More of a holder than a trader, but never shy to experiment with new protocols.
