Friend.tech skyrocketed, how is personal stock priced?

Written by: Loopy Lu, OdailyNews

friend.tech is currently one of the most talked-about projects on the base chain. In the distant "ancient internet" era, the "friend trading" mini-game was once active on major SNS websites. Friend.tech is a Web3 product that closely resembles the "friend trading" model.

The product ignited community discussions within a day of its launch, with Dune data showing that it has generated over $8 million in transactions.

What are the highlights of this rapidly rising product, and how does it differ from previous SocialFi offerings?

Web3 Population Trading Platform

friend.tech is built on the L2 network base launched by Coinbase. The product is forcibly linked to Twitter to obtain users' Web2 social identities; without linking Twitter, the product cannot be used.

This product is quite mysterious. Directly visiting its official website does not provide any product information. Currently, there is no product introduction, official documentation, or other content available.

To learn more about the product, users can only access and use friend.tech via their mobile phones. For specific operations, users can refer to the tutorial previously published by Odaily Planet Daily.

In friend.tech, each user is tokenized. A user's influence can be directly priced by the market.

Specifically, users are abstracted as a type of crypto asset. A user can purchase shares of "other users."

Why would someone be willing to spend real money to buy someone else's equity? For those with strong social influence (such as popular analysts, project founders, etc.), many of their fans hope to have private conversations with them or directly seek advice.

On traditional social platforms like Twitter, the private messaging feature is often abused due to its lack of restrictions. KOLs receive a large number of private message requests and cannot handle all of them. In friend.tech, however, it is different. By default, users cannot engage in private conversations. For buyers, only after owning shares of a person can they initiate private chats with them. The price of shares will also fluctuate based on market supply and demand. Users can also resell their shares to earn profits.

For those social influencers whose shares are bought, each transaction can earn them a "subject fee."

How is Real Person Stock Priced?

Roughly speaking, the more popular a person is and the more their stock is traded, the higher their stock price will be.

So how is the stock price specifically determined? Twitter user @functi0nZer0 has organized the pricing model for this product.

As the sale of stocks increases, prices also rise significantly. The more people buy a person's stock, the more valuable it becomes.

In each transaction, 5% is earned by the original "issuer" (the person whose stock is named). This leads to a very strong network effect. The more trading and speculation there is about a person, the more money they can earn.

Although this product is not a fan token issuance platform for KOLs, its design inevitably reminds people of traditional fan tokens.

Previously, the category of "fan tokens" held significant influence in the SocialFi space. It was generally believed that allowing influential people to issue fan tokens and empowering those tokens was a way to combine social and crypto elements.

However, as fan token products have matured, we can easily identify various issues with such products. On one hand, fan tokens struggle to establish a deeper connection (or binding) with influencers. Often, apart from the name, fan tokens have little more connection with the influencers they represent.

The problem this creates is that fan tokens find it difficult to have liquidity in the market. These projects are hard to trade and, in most cases, lack investment or speculative value.

The change that friend.tech brings to social tokens lies in the pricing curve, which mechanism-wise gives trading value to influencers' "stocks." Just as DEXs abandoned the more immediate "order book" in favor of the AMM mechanism, the fluctuation of an individual's stock price does not require constant trading. Even with very few transactions, personal stocks will still generate sufficient volatility based on the pre-set pricing curve.

The Invitation Code Farce Reappears, Do Social Tracks End Up the Same?

friend.tech is currently in a testing phase, and only users with invitation codes can use it.

Additionally, when an invitation code is used, users can also earn "points." Due to the expectation of receiving airdrops for "points," this further attracts people's enthusiasm for its "CX."

However, when we look back at past history, it is not difficult to find that such overnight sensations and hard-to-get invitation codes for social products appear in every cycle.

In 2021, the social product Monaco became an overnight sensation, and because it also adopted an invitation mechanism, registration was only possible with an invitation code. This caused the platform's invitation codes to be traded for hundreds of dollars.

Earlier this year, Nostr, strongly promoted by Twitter founder Jack Dorsey, became popular in the crypto world and was even repeatedly discussed as a potential replacement for Twitter.

Social networks are one of the core and pillar application scenarios of the internet, reaching the most common and widespread C-end users. This makes it a hot entrepreneurial field in the crypto industry.

However, with the rise and fall of concepts like SocialFi and DeSocial, users inevitably find that crypto social products seem to share the same fate—rapid "rise" followed by silence. Of course, Web2 is similar; everyone still remembers the former popularity of Clubhouse.

In the initial stages of a product, using an access mechanism to limit the large-scale influx of ordinary users is a common practice. Artificially raising the entry threshold and creating scarcity to attract attention is a standard approach for social products. But without genuine demand and a network of relationships, the initial novelty cannot determine user retention and conversion.

In the Web3 world, despite the support of popular concepts like DID and SBT, new social protocols and applications are emerging like mushrooms after rain, but none have truly settled a large number of active users after the expectation of benefits. How long can the popularity of friend.tech last?