The social media industry continues to rise, and decentralized social platforms are emerging.

The global social media industry is experiencing rapid expansion. The market value is expected to reach $251.45 billion in 2024, a rise of 14.8% compared to 2023. Currently, approximately 62.3% of the global population uses social media, with an average daily usage time of over 2 hours.

Decentralization social media ( DeSoc ) provides creators with new ways to monetize content and manage online relationships. It promises to enhance privacy and security, and most importantly, empowers creators with complete control over their data and monetization.

With the development of Web3 technology, decentralized social networks began to receive widespread attention in 2023. Friend.tech, as an emerging blockchain-based decentralized social network, aims to explore this market. The platform stands out by addressing common issues in centralized networks, such as user data ownership, limited privacy options, and content censorship risks.

In 2023, Friend.tech not only achieved significant rise, but its revenue is also comparable to some top protocols, providing creators with the freedom to monetize on their own terms.

This article will delve into the platform, analyze its token issuance, compare it with competitors, and assess its potential and related risks for 2024.

Project Overview

Friend.tech is a decentralized social platform built on the Base chain. It is closely integrated with X to acquire users' Web2 identities, allowing users to profit based on these identities. On this platform, every user can be tokenized, and their influence is directly priced by the market.

It is one of the most successful Web3 dApps in the SocialFi field, achieving the highest income to net deposit ratio in history, with first month revenue exceeding 2 million USD and net deposits of 33 million USD.

The core of this project is based on the concept of fan economy. Users need an invitation code and must deposit 0.01 ETH to start using it, which is the main currency for in-app purchases of shares from other users. These shares represent a part of the user's influence. After purchasing shares, buyers can start one-on-one chats with the investors. This setup allows users to connect directly with their favorite influencers. Furthermore, this chat conducted through "keys" or "shares" can be traded, enabling users to potentially profit from the increasing popularity of content creators.

For KOLs, they earn a 5% fee each time someone buys or sells their shares, providing a financial incentive. To increase income, KOLs need to enhance the trading activity of their Keys. Additionally, 5% goes to friend.tech, with a total fee of 10% charged on each related transaction.

The decentralized social media protocol gained widespread attention last year, but has recently experienced a decline. On-chain data shows that daily activity on Friend.tech has significantly decreased since it peaked on September 13, when it recorded 539,810 transactions. Since then, interest in the platform has noticeably diminished.

However, despite the decline and some criticism, there is still heated discussion among Friend.tech users about a potential revival. This excitement stems from the anticipation of an upcoming airdrop, the announcement that users will have complete control over their tokens, and the upcoming release of V2, all of which have been positively received by the community.

Comparison of Friend Tech V1 and V2

Friend Tech V1 is an innovative Decentralization social platform that connects crypto influencers with followers. Users can create their own Key and potentially profit by buying and selling KOL's "Key". This model has been particularly popular during the bear market, helping the platform achieve a significant rise in users and activities. The platform generated about $13 million in fees from a trading volume of $130 million, paying users approximately $6 million in earnings.

However, this model also has drawbacks, mainly high fees. Since there is a 10% fee on both buying and selling shares, it is difficult to make a profit unless users sell at a price well above the purchase price. This high turnover demand leads to inconsistent user experiences, ultimately becoming a barrier for new users to join.

Friend Tech V2 was released on March 3, 2024, introducing several new features and changes. Notably, users can now obtain $FRIEND tokens, marking a significant update. However, this release has been criticized for the lack of clear information and guidance, especially regarding new elements such as "Club".

Club is the main addition to V2, serving as a group space owned and managed by Key holders. The club has autonomy, including the voting to elect a president to manage the club and appoint moderators. All transactions within the club use the $FRIEND token, with a 1.5% fee applied to each transaction. This allows for the introduction of referral fees and more flexible trading terms among members.

However, the implementation process and user experience are not smooth enough. Users are confused about how to claim airdrops, join clubs, or find established clubs, as the platform does not provide clear instructions or interface prompts.

In summary, V1 focuses on achieving rapid growth and revenue through high fees, while V2 aims to enhance user governance and interaction through the club, but faces challenges in execution and clarity, which may affect its long-term viability.

Team, Support, and Partners

Friend.Tech was developed in August 2023 by two anonymous individuals with controversial histories in the crypto community, 0xRacerAlt and shrimppepe. Community members pointed out that these developers were also involved in a failed NFT project. Further investigation revealed that 0xRacerAlt deleted several tweets linking to this NFT project and held an official position in the Kosetto Discord. These findings raised concerns about their reliability.

In August 2023, Friend.tech secured seed funding from a venture capital firm, although the amount was not disclosed, and collaborated with the firm to create an online social interaction tool.

There are rumors that Friend.tech has completed a Series A funding round, with a valuation of $50 million. This round of financing includes token certification, suggesting the possibility of eventually issuing its own token, which has indeed happened.

Controversy

Friend.tech originated from a developer named Racer, who initially practiced in a decentralized social media project called TweetDAO(. The platform allows users to post tweets from a shared account by holding an NFT called "TweetDAO Egg." Although the project initially achieved viral success, it eventually faded, leading to the closure of its main social accounts and website.

After that, Racer and a co-developer named Shrimp launched Stealcam, a Web3 platform where users can mint and purchase images as NFTs, which remain hidden before purchase. However, due to the difficulty in maintaining creator profitability, the developers ultimately renamed Stealcam to Friend.tech. Friend.tech was launched in May 2023, aiming to attract Web3 influencers and creators looking for a more effective way to monetize content, using a supply-demand driven economic model.

However, Friend.tech initially sparked controversy due to its vague privacy and data security issues. The platform requires users to download an application that does not have a readily available privacy policy. This lack of transparency raised concerns among users regarding the handling of personal data, but this has been partially addressed since.

In addition, the sustainability of the platform has also come under serious criticism. Initially, Friend.tech experienced a rapid rise due to its influencer-centric strategy, but as the initial excitement faded, doubts about its long-term viability deepened. Critics point out that the platform's over-reliance on influencers is a key weakness. If there is a lack of active participation from key figures, the platform's value may decline.

This is the reason for the strategic shift in the V2 update, moving from a KOL-centric model to one that places more emphasis on a broader community model. Nevertheless, questions remain regarding the level of influential user participation and the actual value they bring during periods of inactivity.

Friend.tech is striving to differentiate itself and retain users in competition with X, a decentralized social platform, and other decentralized competitors.

On the positive side, Friend.tech now has its own token, creating opportunities for trading and speculation. The project has over 160,000 followers on social media and has received positive promotion from some influencers who encourage others to try the app. This promotion clearly has economic benefits for them, but also indicates that the project has potential upside.

As of the writing of this article, Friend.tech has a market capitalization of $184 million, matching its fully diluted valuation. Compared to some other DeFi protocols or meme coins with higher valuations, $FRIEND is seen by many on-chain traders as an attractive risk-return investment considering the project's profitability on fundamentals. The involvement of a well-known investor further enhances the project's credibility.

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Competitive Analysis: Friend.tech vs Some Decentralization Social Platform

Friend.tech gained strong support by charging high fees and offering special club features, initially achieving great success. However, its popularity has declined, raising concerns about how to maintain long-term user interest. In contrast, a certain decentralized social platform does not have its own token and uses a certain token accepted by many within its ecosystem. This approach has helped the platform build a loyal community similar to traditional internet forums, leading to a steady rise in user numbers and daily activity.

In summary, despite Friend.tech earning considerable revenue in its early days, its fluctuating user data makes its future uncertain. A certain decentralized social platform focused on building a strong community with a certain token seems to promise more lasting success. This is because it has loyal users and various use cases within the ecosystem. As both platforms continue to evolve and respond to user needs, their success in the competitive SocialFi market will depend on adaptability.

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Token Economics

$FRIEND token is the core of Friend.Tech V2, serving not only as currency but also as a key to attract community participation. Its current market capitalization and fully diluted valuation is $185.26 million. A total of 92.63 million tokens were fully allocated to the community during the token generation event.

Token economics aims to promote participation; users can receive tokens by interacting with the platform—by following ten people, they can obtain 10%, while the remaining 90% requires joining a club. This ensures that token distribution supports active ecosystem participation.

$FRIEND can only be traded within the Friend.Tech system itself, which utilizes a local exchange feature with a 1.5% fee. This promotes liquidity and ensures that the platform benefits from fee revenue, but it also requires users to trust the stability of the platform.

The Club feature on Friend.Tech is similar to a micro government, allowing users to manage and customize clubs, from setting names to economic parameters. This structure supports Decentralization governance, with club leaders and moderators elected by key holders, reflecting a DAO-like transparency.

Despite maintaining a user interface similar to V1, the introduction of the $FRIEND token and the club adds a new level of engagement and monetization. Transactions within the club are subject to a fee of 1.5%, which is distributed between liquidity providers and the platform, helping to maintain the financial health of the ecosystem and reward active participants.

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Bullish Fundamentals

• According to data analysis, Friend Tech has seen a significant rise in user adoption and activity after the recent airdrop and v2 upgrade.

• Despite having a low market capitalization, especially compared to other projects and meme coins that generate less revenue, $FRIEND is attractive to on-chain traders for potential price appreciation. Although it is currently not listed on major exchanges, investors should keep a close eye on any potential listings on top exchanges.