Is there still a chance for frend.tech to launch V2?
Original title: "Friend Tech V2: Opportunity or Blodbatch?"
Original author: FRANCESCO
Original translation: Lucy, BlockBeats
Editor's note:
On May 4, friend.tech officially released version V2 and introduced a major new feature, the club. According to the airdrop claiming standards released by friend.tech, only by joining the club can you have the opportunity to claim all airdrops. Subsequently, according to Dune data, the number of clubs has reached 107,000 today, with a total transaction volume of more than 16.46 million FRIENDs and club fees of 246,142 FRIENDs. Crypto researcher FRANCESCO analyzed the new mechanism of V2 based on the new and old version mechanisms of frend.tech. He believes that V2 may just be an experimental product launched by the team for the new version.
frend.tech (FT) is one of the most successful Web3 dapps in SocialFi, achieving an all-time high revenue to net deposit ratio, with over $2 million in revenue in the first month and over $33 million in net deposits.
This was supposed to be a big week for FT as they launched V2 of their product and the platform token FRIEND, introduced major changes to enhance the sustainability and appeal of the protocol, etc., but it turns out that this could be the end of it.
Previously, some were optimistic about these developments while others remained pessimistic, but after today’s developments, everyone is in disbelief.
In this article, we will dive into the new mechanism of FT V2, FRIEND, explore any mistakes it has gone through or is still going through, and discuss whether this business model is sustainable.
Let’s start by analyzing the challenges faced by the early versions of frend.tech.
About frend.tech V1
FT is the first decentralized social application to consistently generate revenue by aligning the interests of well-known crypto figures with the interests of ordinary users.
This alignment has resulted in one of the largest user base growth, activity growth, and revenue growth of any new project during the bear market.
However, this model was not sustainable due to the fees charged by the platform.
While KOLs and FTs earned significant revenue, regular users were losing money every day. Due to a 10% tax imposed on purchases and sales, they could only profit by selling their keys for at least 20% more than they had purchased them for.
This was only possible during periods of high platform activity and inflows, and was the main reason for the volatile behavior observed in the chart below.
Ultimately, fees became a barrier to entry for many, causing FT V1 to leave a bittersweet feeling for many.
Even so, FT v1 achieved some milestones in 6 months that few protocols achieve in their entire lifetime:
· Generated approximately $13M in fees:
· Reached $130M in transaction volume (probably the highest volume achieved by the SocialFi dapp):
· Distributed approximately $6M in revenue to its users:
About frend.tech V2
FT V2 was released on Friday, March 3, 2024. As part of the much-anticipated update, users were finally able to claim their FRIEND tokens. However, the launch seemed to fall short of expectations, with issues such as a lack of surrounding information.
This was the only official announcement on Twitter since the launch of V2.
As you can guess, this left many confused as to the status of the airdrop claim.
Users can only claim 10% of their airdrop (provided they follow at least 10 people), and need to join a club to claim the remaining 90%.
However, these requirements are not clear as there are no pop-ups or guidance in the app, and in most cases, users cannot claim airdrops even if they join a club.
What is a club?
Clubs are one of the major new features introduced in FT V2.
Anyone can create a new club. Clubs are defined as "group spaces" owned and managed by key holders; however, we don't know what they will do in the future.
Here’s how club works:
· Key holders vote for club hosts
· Hosts manage the club and select moderators
· All club keys transact using FRIEND
· Every club transaction is subject to a 1.5% transaction fee, split between farmers and FT
Some interesting things we observed when using the Base Scan contract interface, changeBestFriend and changeBestFriendfee, we can speculate that these will be used to allow anyone to add a best friend, which will allow us to get less or no fees when trading our keys.
We can also speculate that FT will soon introduce referral fees (point 7), and we also know that club keys are transferable (maybe even user keys will be transferable?).
The Fight Club in the picture below is the first club represented by FT#1, and Racer is actually its organizer, as can be seen from the key price.
However, he did not create this club himself, which can be observed from the picture below.
When creating a club, users can select the following:
· Name
· Description
· Price curve (standard or exclusive)
· How many keys to buy
However, to be fair, most of these are just assumptions, and it is expected that the FT will provide more information about clubs and their mechanisms.
There are also some elements that users need to be aware of when interacting with clubs: Anyone can transfer club shares to someone else and name them as a host. Therefore, you have to be very careful about considering well-known people who are nominated as hosts: they may not even know they have been nominated. For example, this morning we created a random club and invited Racer to join.
Note that clubs can have the same name, so always check the FT# of a club to make sure you are buying the right club. In addition to these changes, the front page of the Web App has also changed. New elements are now displayed, including "farms" (LP), airdrop claims, and rewards.
Currently, users can only claim their airdrops, create clubs, buy and sell tokens, and add them to the farm to receive rewards.
In addition, many people emphasized that the role of keys has not actually changed, their utility has not expanded, and the social media elements that were supposed to change the direction of the platform seem to be gradually dissipating. However, we don't know if this is the final version or a new update will be released soon.
It is also important to note that many people have higher expectations for the price of FRIEND tokens. Coupled with the fact that there is no new use case for the keys, which could be the difference between whether the airdrop was worth it or not, many people sold their FRIEND tokens in a panic. All of these factors combined make it even harder to imagine the long-term sustainability and success of this model, and given the current design, it is difficult to determine whether it is the final version.
It is also worth mentioning that there is a delay between actions completed on-chain and what is reflected in the FT UI, we observed a delay of about 3-4 hours.
Is the frend.tech model sustainable?
Many have questioned the sustainability of the FT model, and while initially dismissed due to the incredible initial traction of the dApp, these critics have become increasingly vocal as the FT hype seems to be fading.
With FT V2 moving away from the influencer-centric model of its V1 launch, the protocol aims to reduce its dependency and become more sustainable.
In fact, dependency on influencers is a single point of failure: a social network is only as valuable as its users. If many of the big names are missing, FT will become less appealing.
If Hsaka or Ansem are rarely connected to the app, let alone sharing alpha there, then what is their value? This is likely one of the key reasons why the team has recently moved towards a more community-centric (read: degen) approach.
This is a key question for FT: how can they ensure that users are incentivized to choose their app over others like Twitter, Farcaster, Lens, etc.? Although after the token launch, FT did not attract the same level of attention as the previous two times.
Many had speculated that with the release of FRIEND, the protocol would gradually attract more attention. However, the current indicators are far from expectations. Will this be another case of "selling the news"? Or will the long-awaited V2 release turn frend.tech into a leading social finance application and attract new user groups?
The current FT V2 version seems to be missing several key features, which have been removed from the application. For these reasons, it can be speculated that this will not be the full version of FT 2, and an updated version may be released next.
We want to end this post with a reflection: Is this all that FT could develop in 8 months with crazy funding, resources, and hype? Or is it another careful plan by the team to compile all the negative feedback, iterate, and release the final version of the app?
It seems to be the latter.
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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