PaaS New Model: Decoding the Market Strategies of Top Players in Friend.Tech

Author: Aki Network Research

Friend.Tech and Its Core Gameplay

Friend.tech has been extensively introduced; it is an application that sells tickets for private rooms at a Twitter-level real-name system, with ticket prices determined by mathematical formulas and supply-demand relationships, allowing direct conversations with KOLs after entry. The core gameplay keyword is (3,3):

• What is (3,3)? A strategy that theoretically allows everyone to profit.
• More specifically? That is, "You hold, I won't sell; we promise not to let go of each other," allowing everyone to maximize benefits before a crash.

Driven by OlympusDAO, (3,3) has become one of the most viral Ponzi memes in the crypto world, bringing considerable economic benefits to participants.

Returning to Friend.tech, what role does (3,3) play in this new scenario?

In fact, this strategy is quite simple: Suppose Xiao Ming's Key is worth 0.1 ETH, and his friend Xiao Wang's Key is also worth 0.1 ETH. If they buy each other's Keys, the first income is a 5% fee (another 5% goes to the project team), and more importantly, according to the price curve (bonding curve), the value of both their Keys will rise to 0.12 ETH. Next, Xiao Ming continues to look for another friend, Xiao Hong, and they also complete a (3,3) commitment/transaction. This process continues, and all participants' assets will significantly appreciate. If this continues, all participants in this scenario will see their assets soar.

If there is no crash, everything looks great.

Let's put aside the crash analysis for now and talk about why Friend.tech is good.

PaaS - Ponzi as a Service: Decentralized Ponzi as a Service

The beauty of Friend.tech lies in its provision of a new paradigm for monetizing influence, allowing everyone to create their own Ponzi with low barriers. The trust and value foundation of these Ponzis is personal influence and social connections, providing a natural and straightforward incubator for imagining a community.

The Foundation: Monetizing Influence

Influence is valuable. In this era, getting others to listen to you and taking time to view your content on the toilet instead of selling meat on ABCFP is quite a skill.

Regardless of the circle, every influencer's biggest pain point remains how to monetize their influence. Don't be fooled by their ability to sway opinions on Twitter; converting influence into substantial income is still a challenge.

There are traditional methods, such as selling products or promoting on platforms; or one can take the reins and sincerely preach. The former brings quick money but consumes personal credit and carries the risk of product promotion failures; the latter is slow or may not yield any income, also consuming personal credit or even money.

In the Web2 era, content creators typically earned income through subscriptions and tips. Financial influencers often focus not on investing but on creating communities and charging subscription fees. In the Web3 era, many have added new twists to traditional monetization models but still haven't escaped the rut of product promotion. Is there a way for everyone to earn money without the vicious cycle of "either you take from my pocket, or I take from yours"?

Then, Friend.tech appeared, offering a solution: "Folks, let's gather together and profit from others!"

Ponzi schemes are common, but Friend.tech is rare.

How does Friend.tech innovate on this familiar routine to attract substantial funds and traffic?

Trust and Community

Trust is the primary consideration in the (3,3) strategy. Although (3,3) is the optimal solution in game theory, this strategy is essentially an unstable structure, and most participants have pondered the question, "When will I exit?" It's just a matter of time. In Friend.tech's (3,3), Key holders, under the "banner" of their KOLs, collectively form a community, establishing a higher trust threshold.

KOLs are individuals in virtual social networks, and their value and credibility become the anchor supporting the entire Friend.tech ecosystem. This is not a new revelation; just as personal tokens required real names in the early days, KOLs use their follower counts and online reputations as endorsements: the size of traffic itself is a proxy for credit.

Although rug pulls can happen faster than expected: during the day, they may swear to be family, but at midnight, they might dump heavily; or they might genuinely be "hacked and liquidated." Common tactics, no need to elaborate. Credit is inherently consumable; making money isn't shameful. In horizontal comparison, Friend.tech's credit baseline might still be relatively high— in the forest, as long as you run a bit faster than your peers, you're good.

On the point of "running faster than others," Friend.tech's inherent social attributes provide a subtle entry point: for Ponzi schemes, marketing is everything, and social interaction is the best marketing behavior. The setup of multiple smaller rooms under the large umbrella of Friend.tech has spawned various marketing methods suitable for each room. We will explore this phenomenon in more detail later.

Foolproof One-Click and the Broken Window Effect

Once we find a way to monetize traffic or credibility, the next question is how to implement it more easily and quickly. Friend.tech offers a very foolproof one-click method, requiring no coding or complicated steps. Anyone can become a room owner. This has been proven countless times in the Web2 era: the more steps there are, the more potential users may drop off.

The low entry barrier for Ponzi schemes is not always a good thing. The more schemes there are, the more existing funds will be divided, often leading to faster crashes. Friend.tech provides a common Ponzi platform, but people do not openly label it as such. Instead, it emphasizes social interaction—the essential function of the key is direct interaction with KOLs. This name and banner are crucial for persuading more people during the project's and community's growth phase, even though it does not affect the outcome of each Ponzi scheme.

Ordinary Ponzi schemes are like a chicken dinner battle royale, while Friend.tech, under the banner of social interaction, creates an atmosphere of "we can team up to profit." Everyone shares the profits and coexists harmoniously on the platform, creating a better experience. In such a harmonious atmosphere, credit becomes something shared within limits:

• "He also built a chat room on Friend.tech."

• "He hasn't rug pulled, so I definitely won't rug pull."

• "Even if he rugs, I won't rug pull."

• "If he rugs, I'm doing pretty well if I run slower than him."

Of course, this phenomenon can also be summarized with a somewhat inappropriate term: "Broken Window Effect." When everyone is monetizing traffic in this way, the question of "should we do this" is intentionally or unintentionally skipped, at least making it less burdensome for one person and more acceptable to the community.

Who is making waves on Friend.tech?

Since we define Friend.tech as "Ponzi as a Service" (PaaS), a B2B business, we might as well view individual participants on Friend.tech as businesses/projects/individuals. Thus, it is logical to use market capitalization (Market Cap) and trading volume (Volume) as standards to observe them.

We ranked individuals based on historical all-time high market capitalization and current market capitalization, specifically represented on Friend.tech as the price of Key Shares, filtering out a total of 14 individuals as follows. This table was established in mid-October 2023, and about 10 days have passed since then, with little change in rankings.

This table references @cryptokoryo's Dune table Friend Tech. Compiled into Who's on Friend.tech, with excerpts here.

The price of the key of Friend.tech founder Racer has not seen much interaction from Racer on social media; this curve can essentially represent Friend.tech's market performance—peaking in mid-September and gradually declining, stabilizing in the region.

This article was written in mid-October (see left image). Comparing the chart and price curve, the top market capitalization at that time was Vombatus_eth. Although the curve was stable and the price satisfactory, the number of holders was relatively small (34 people), with over 70% of the chips concentrated in individual hands. Returning to social platform X, Vombatus primarily promoted the project and posted memes, making it difficult to showcase connections and legitimacy with institutions, leading me to judge that there was a "rug risk" (i.e., investors unable to withdraw their investment).

Sure enough, by late October (see right image), news broke that "friend.tech's former top Vombatus sold 176 Keys (worth 850 ETH) and shifted to New Bitcoin City."

Among these 14 individuals, those with chips overly concentrated in personal hands include Machi Big Brother (machibigbrother, 60% share) and MURPHYWIFE (coinnlover, over 70% share). The former has hardly posted relevant information on social platforms to attract buyers, while the latter has only 110 followers on social platform X.

Among them, three individuals have relatively balanced shareholdings: Christian2022.mid (27%), HanweChang (17%), and CL207 (10%). What does "relatively balanced" mean? According to Friend.tech PaaS's setup, each individual on the platform is a business, and in crypto projects, team tokens typically range from 10-20%. Looking back at the identities of these three individuals, Christian (NextGen Ventures) and CL207 (Fairy Capital) are both investors, while HanweChang is also an NFT Degen, and these identities and experiences should provide some theoretical guidance on token economics and distribution.

The remaining eight individuals have less than 5% of the chips, with five of them below 1%. Unless there are combinations of multiple wallets and X accounts, these individuals are true advocates of decentralization.

Additionally, at least from the identities of these 14 big shots, the overlap between Friend.tech and the NFT circle is quite high, including Herro, Hanwe, Machi Big Brother, dingaling, Cbb0fe, etc. It cannot be ruled out that wash trading techniques were used in Key transactions, but we will not delve into that here. The cost of conducting wash trading on Friend.tech is much higher than purely on-chain, as each Friend.tech account needs to correspond with a web2 social platform, meaning multiple email addresses/phone numbers must be provided.

Top Participants' Market Strategies

Low Investment + Decentralization: No Marketing Yet Claiming Kingship

Among the top participants in Friend.tech, three have only paid the entry fee (0.02-0.2 ETH) with no other investments. Moreover, their token holdings are very decentralized, and the rooms are highly decentralized.

These three big shots are:

• 0xRacerAlt - the real insider
• HsakaTrades - TOP traders
• Cobie - OG

Through data analysis, we found that these individuals share some common characteristics:

• Key holding addresses are dispersed: Both supply and number of holders are relatively high, with an average holding of less than 1.5. This indicates a higher consensus in their rooms.
• High Key trading volume: In terms of total trading volume, these three rank among the top three of the 14 big shots, while the total trading volume of other individuals is below 3000 ETH.
• Profit exit decisions: From the perspective of profitable exits, Friend.tech founder Racer and seasoned trader Hsaka Trade have successfully exited with profits of 271.3 ETH and 114.8 ETH, respectively (calculated at a price of 1600-1800 USD per ETH, equivalent to 200,000-500,000 USD). Cobie seems to be conducting an experiment and has not shown signs of exiting yet.
• Early entry: They all started participating within the first three days of Friend.tech's launch (August 10). The internal testing of Friend.tech was invite-only, achieving about 4,400 ETH (over 8 million USD) in trading volume on the first day.
• Their profiles indicate they have their own reputations, work, and profit methods, not relying on Friend.tech for income, but rather participating for entertainment, interest, or experimental purposes, occasionally posting relevant information on Friend.tech:
• Cobie has not actively tweeted since June 2023, only replying; UpOnly's last update was in December 2022.
• Racer's X account is set to an external invisible mode.
• Hsaka participates more in trading discussions.

The Drunkard's Intent is Not in the Wine: Seizing Opportunities to Build Personal Brands

There is a group of smart individuals who realize that Friend.tech is not just a platform for monetizing influence but also an opportunity to leverage power. For them, Friend.tech is a method and framework they can utilize to create a speculative channel to promote their personal parallel brands. The most obvious examples are 0xCaptainLevi (Levi) and HerroCrypto (Herro).

These two individuals share common characteristics on Friend.tech:

• They invested over 100-150 ETH of their own capital into Friend.tech.
• Their token holdings are dispersed, and their price curves remain quite attractive.

Levi has been dedicated to creating his parallel community from the start. In the first phase, this community was called BLYC (BoredLeviYachtClub), and after October, he depersonalized it, renaming the community brand to GamHaus. Levi's main promotional channels include public domains (X) and private domains (Discord).

In terms of market strategy for his parallel community, he adopted the following tactics:

• Leveraging Brand Recognition: Skillfully utilized the brand recognition of BAYC (Bored Ape Yacht Club), eliminating the need for users to remember a new brand, quickly opening up the market.
• Family Recognition and Community Interaction: The BLYC community uses its unique diamond and lightning (⚡) as symbols, a method widely adopted by Link3 and Lens Protocol, primarily aimed at allowing community members ("family") to recognize each other and mutually purchase keys; there was even exclusivity, only purchasing tokens from community members.
• Personal Image Building: The "L" in BLYC refers to Levi personally, and he even issued a personal token $LEVI on August 20. Throughout late September, Levi actively promoted BLYC's UGC (user-generated content) activities, with these UGC contents primarily aimed at enhancing Levi's personal idol image.
• Instant Rewards: Levi encourages UGC behavior through purchases and follows, promoting community membership, etc.
• Brand Restructuring: Once his brand gained recognition, Levi restructured it, removing traces of BAYC and depersonalizing it, making the brand more universal to lay the foundation for attracting more business collaborations in the future.

Among these market strategies, some methods have proven effective, with the most important being the instant rewards strategy, continuously stimulating user participation and interaction. For example:

If you change your name suffix to my community mark, I will buy your Key.

If you put me on your watchlist, I will buy your Key.

If you do a good job uploading and promoting UGC, I will buy your Key.

Actions should be swift, and rewards should be immediate. Important information should be communicated repeatedly to boost community confidence, reminding everyone 800 times a day, "I haven't rug pulled." Additionally, establishing a unique community language ("gm @friendtech"); sharing personal insights, continuously outputting, and maintaining personal image, while not fearing mistakes. Conducting regular AMAs, retweeting any information related to oneself, and periodically presenting achievements with data to keep social media activity high. Levi excels in these aspects, with Professor Jo (a major KOL from Korea) and Herro frequently assisting in promotion and interaction.

Herro's performance in the social market is also outstanding, posting a large number of tweets daily, with about 10 related to Friend.tech. Similar to Levi, she is very adept in brand promotion, market perception, and strategy application, skilled at timely incentivizing users, maintaining her room's (3,3) faith without collapse, and regularly showcasing her achievements through data. If Levi focuses on building his parallel community, Herro has three notable characteristics:

First, she has her own NFT virtual idol brand called AnataNFT. She has previously used her virtual idol to create tutorials and promotions for Friend.tech, which has significantly boosted her success on Friend.tech and contributed to her own project's brand development.

Second, she promotes two projects related to Friend.tech, one being frenbot and the other frenlend. Particularly for the former, Herro began discussing frenbot and its token $MEF (a name clearly inspired by MEV, clearly conveying the project's nature) in early September, sparking much speculation. From late September to early October, she began crafting a "scientific approach to profit-sharing" persona.

Third, starting in mid-October, Herro began mentioning new opportunities for Friend.tech clones—New Bitcoin City. She fully utilizes her influence on Friend.tech to redirect attention to other opportunities.

Overall, Herro's promotional strategy before mid-September resembled that of an analyst, relatively objective and monotonous, mainly recommending potentially profitable keys and displaying charts. However, over time, she gradually formed her unique style, discussing "about me and my projects" in various ways, rather than just analyzing others, which reflects a more project-oriented mindset.

Lastly, it's worth mentioning 0x5f_eth, who is clearly a Punk holder and part of the Punk OG community. He has been dedicated to building his image as an analytical KOL and a community co-builder. His successful promotion on Friend.tech may have, in turn, boosted user interaction on his social platforms—his view counts are quite impressive (usually exceeding 10K) compared to his follower count (4.7K). After two months of playing, he finally recognized Friend.tech's potential and began creating a personal AMA brand called "Between the Two Hoodies."

Anonymity and Obscurity: Born for Arbitrage and Profit

There are some users on Friend.tech with high market capitalizations whose identities and profiles on social media remain a mystery, somewhat resembling "meme tokens."

This table has two rows of data about Vombatus. Vombatuseth 1 is his data from mid-October, while Vombatuseth 2 is his data post-rug, still being his largest holder and not fully recouped.

According to data from platform X, the user Coinnlover, nicknamed MurphyWife, has her largest holder as Murphy, reportedly her husband, who owns a community of 3,800 members. According to Murphy's own description, his basic strategy is very simple: privately invite friends to buy his wife's Key, and after purchasing, he will refund the full amount, with all buyers being Koreans. He explains, "I realized that I should make my wife's account (@coinn_lover) expensive because she doesn't know anything about crypto, and I wanted to get her interested."

Strategy explanation: https://twitter.com/murphys1d/status/1713801758814941354

Fee refund: https://basescan.org/txs?a=0x4ec86d29Bd3a1926CA390bc4E8f3F0c2BcC816bA

Vombatus's X platform account has always been characterized by a style of "meme culture" and "shitposting." I don't think it can be considered a "rug" (fraud) now; it's somewhat similar to how project teams cannot continuously recharge their love for the faith, choosing to sell part of their tokens for profit. However, he remains his largest holder and has not fully recouped, predicting that various strategies may still be available in the future. Since October 10, he has also been actively promoting New Bitcoin City.

Beyond

Cbb0fe seems to be the one who understands Friend.tech the best. Clearly, he has surpassed merely enhancing personal visibility or building his community or brand through Friend.tech; he launched Ponzi design services on the Friend.tech platform on 10/18, successfully creating a client named CBBuuull, which is quite impressive.

Summary and Outlook

As a breakout product in a dull bear market, FriendTech's most striking feature is its new answer to the age-old Web3 dilemma of monetizing traffic, namely PaaS (Ponzi as a Service), providing KOLs with a new method and tool.

The "Key" model may become a new model for paid content.

Unlike previous tipping or subscription methods, this resembles an "investment." Driven by tangible benefits, the atmosphere and development of fan communities will adopt a new paradigm.

As a monetization method that does not require product promotion, it avoids some traditional reputational risks but creates new, more direct issues, such as (3,3) turning Key transactions into a hardcore and mandatory PVP game. When the benefits are substantial, we should not expect goodwill. This could lead to a series of problems, including market cap fluctuations, insider trading, and midnight liquidations.

The age-old dilemma of how to sustainably operate a "Ponzi scheme."

Beyond money, content or ideals are also needed. The collapse of Ponzi schemes usually results from insufficient new capital inflows or people turning to other Ponzi schemes. FriendTech's response is that they focus on social interaction and content, which may retain some traffic. Similar to Stepn, there are indeed some people using it as a running app.

On the other hand, the market cap ceiling issue inherent in the Bonding Curve serves as both a limitation and protection for Ponzi schemes. Large funds find it difficult to participate, which is a problem. However, lower liquidity and fewer participants may make community management easier, leaving some space for KOLs who seriously operate on the Friend.tech platform and those who use Friend.tech as a means to attract traffic.

The Ecosystem of Friend.tech

Although the project team likely appears behind the scenes, these ecological applications seem very natural and intuitive. From tools to "derivative" markets, the development of the Friend.tech ecosystem demonstrates that projects can develop ecosystems on suitable foundations to attract more funds and users, while also bringing more Ponzi schemes.

Excluding various potential issues, the development of such an ecosystem tells us: Vital things will always find their way to survive. Those that cannot find it usually lack vitality.

Notes

Let’s recall the innovative entity of the Ponzi theory in the crypto circle in 2021, Olympus DAO, and their community's popular (3,3).

Don't panic; this is just a common table in game theory. The vertical column represents Player One's available strategies, and the horizontal row represents Player Two's available strategies. Here, both players have three choices; each entry in parentheses represents Player One's payoff under that strategy combination, and the second entry represents Player Two's payoff. Now let's review (or preview) the most viral game theory scenario, the Prisoner's Dilemma:

The common sense in the real world is that confessing leads to leniency, while resisting leads to severity, so the penalty for confessing is less than that for resisting.

From the above table, we can see that if both suspects remain silent, their sentences will each be six months; if both choose to confess, their sentences will rise to two years each. So it is evident that both suspects choosing silence is the best outcome. However, such an outcome is often difficult to achieve because they will find that if they choose to confess while the other party remains silent, they will be released immediately; if the other party also chooses to confess, they will be sentenced to two years, while if they choose silence, they will be sentenced to five years. Therefore, in both scenarios, confessing is the better choice. In game theory, achieving such an outcome is called Nash Equilibrium.

Returning to the Olympus DAO Ponzi scheme, the term (3,3) represents the ideal situation where if everyone chooses staking, everyone's profits are maximized. Other strategy combinations yield lower returns than (3,3), so staking is the highest yielding strategy among all possible strategies in the Olympus Ponzi scheme, and thus all participants should choose staking.

With the widespread dissemination on Twitter, (3,3), representing the best possible outcome in game theory, became a viral Ponzi meme, indeed bringing substantial economic benefits to Olympus DAO participants, of course, all before the crash.