Everything You Need to Know about friend.tech V2

Everything You Need to Know about friend.tech V2

Everything You Need to Know about friend.tech V2

Written by: Karen, Foresight News

Web3 social trading protocol friend.tech launched its V2 version during the May Day holiday, attracting attention once again with new features such as paid group Club, unique fee design mechanism, and LP APY close to 600% (reaching 1400% yesterday).

The design of friend.tech V2 continues its minimalist style. Taking the official website as an example, the top section includes the Club and creator search boxes, while the left navigation bar includes Wallet, Activity, and Chat modules. The Wallet displays the holdings of ETH, FRIEND, Keys, and mining rewards. The Activity page lists the key transaction activities of followed creators, while the Chat page aggregates Club and creator holders of Keys, facilitating user interaction.

Table of Contents
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Core feature of friend.tech V2: paid group Club
Platform economy and token distribution
Who are the FRIEND holders and LP providers?
What is the upside potential of FRIEND?

The paid group Club is the highlight of friend.tech V2. Building on the monetization of KOLs and creators in V1, it adds Club spaces, similar to paid groups. However, newcomers to the group need to pay a higher price, and transactions are only supported with friend.tech platform token FRIEND. Additionally, a fee of 1.5% is charged for each transaction (which will be discussed later). Key holders can also vote for the chairman of their Club, who is responsible for managing the club and selecting moderators.

The price of Club Keys follows a specific formula, where the price of the next Key is S^2/100 (measured in FRIEND), with S being the current number of Keys. The table below shows the price chart when the S-th Key is reached, for reference.

Anyone can create a Club on any topic. When creating a Club, you can choose the standard curve (based on the above formula) or the dedicated curve priced at 10 times the standard curve. If you choose the standard curve, when a Club reaches 50 members, the Key price is 25 FRIEND; if you choose the dedicated curve, the Key price is 250 FRIEND. It should be noted that different Clubs can have the same name, so extra caution is needed during transactions.

According to data from Dune as of May 6th, the number of friend.tech Clubs has exceeded 110,000, with over 61,592 Club members, over 450,000 transactions, and a total Club transaction volume of nearly 17 million FRIEND. Within 24 hours, friend.tech has generated total fees of $820,000.

In terms of Club market value, the top two groups on friend.tech are “Ansem’s Army” created by trader Ansem: number #59528, with a Key price of 2,766 FRIEND and 371 members, and “Fight Club” created by friend.tech founder Racer: number #1, with a Key price of 2,371 FRIEND and 125 members.

In addition to Clubs, friend.tech also plans to launch new features such as Keydrops, Memeclubs, and Pinned Rooms, bringing users more diverse social experiences. The presence of Memeclubs alone is enough to excite and stimulate the community’s imagination.

When friend.tech released its V2 airdrop, each point could be exchanged for 1 FRIEND, but initially only 10% of FRIEND could be claimed. The remaining 90% could be claimed after joining a Club and following 10 people. This helps to significantly incentivize platform activity in the short term, but has also received criticism from the community.

Friend.tech has not enabled token transferability and currently only offers token exchange and FRIEND/ETH liquidity provision services on its own platform (DEX “Bunnyswap” https://www.friend.tech/lp). Due to the high liquidity provided on the friend.tech platform (currently close to 600% APY), the liquidity of FRIEND/ETH is close to $47 million.

On friend.tech, users need to deduct a 1.5% exchange fee when exchanging in the FRIEND/ETH pool, and also need to pay 1.5% for Club Key transactions. These fees are shared by LP providers in FRIEND form. In addition, within the next 12 months, friend.tech will also distribute 12 million FRIEND as incentives to LP providers.

Providing FRIEND/ETH liquidity on friend.tech can generate three types of income: a 1.5% exchange fee (current APY is 1,071%), a 1.5% Club Key transaction fee (current APY is 202%), and a shared incentive of 12 million FRIEND (current APY is 135%).

Regarding token distribution, friend.tech has stated that its investors have agreed to give up the right to sell tokens to users, and tokens will be controlled by users. The points of risk investors, including Paradigm, will be distributed to users.

However, friend.tech has not disclosed detailed token supply details, which has raised questions in the community. According to the BaseScan page, the current maximum total supply is 91,082,420 FRIEND, and the contract details show that there is no upper limit to the token supply. The official friend.tech LP page shows a circulating supply of 79.1 million FRIEND (combining data from Dune, this circulating supply includes claimed airdrop tokens and token incentive releases), with a circulating market value of $204 million (calculated based on the FRIEND price of $2.65 at the time of writing).

However, in August last year, when friend.tech just launched its platform, it stated that it planned to distribute 100 million points over 6 months (every Friday). Based on the current exchange rate of 1 point for 1 FRIEND, the airdrop amount is 100 million tokens. In addition, the distribution of 12 million FRIEND incentives to LP providers in the next 12 months results in a total supply of at least 112 million tokens.

According to Dune data compiled by @willprice, the address with the most liquidity provision on friend.tech is owned by Taiwanese singer Huang Licheng, who has provided 1.7588 million FRIEND liquidity (and purchased nearly 800,000 FRIEND at a price of 661 ETH on May 7th). The second address starting with 0xe3879b provides 625,500 FRIEND liquidity in LP and also provides 263 ETH and 42,552 PRIME liquidity in Aerodrome ETH/PRIME. The fourth, fifth, and sixth-ranked users are @bitgoten, Christian2022.eth (partner of NextGen Digital Venture), and Cryptoyieldinfo, respectively. NFT KOL dingaling also holds over 410,000 FRIEND but has not staked it.

In my opinion, given the recent controversy surrounding token airdrops, friend.tech’s 100% distribution to the community and the practicality of using FRIEND for payments in Clubs has been relatively successful. It can be imagined that as Clubs grow and develop, the amount of FRIEND tokens paid by users will also increase. These tokens are essentially locked in the system, creating stable value support. Additionally, friend.tech provides generous rewards for LP providers, which will attract more FRIEND token liquidity.

As mentioned earlier, friend.tech has not enabled token transferability, which means that CEXs cannot list the FRIEND token. The only way to obtain FRIEND is through claiming airdrops or buying it with ETH on the friend.tech platform. Users can also provide liquidity by combining FRIEND and ETH to earn rewards.

What would happen if friend.tech enabled token transferability? I believe that this would greatly increase the liquidity of FRIEND and further drive it into the price discovery stage. However, this could also lead to the cancellation of the platform’s 1.5% exchange fee mechanism, thereby reducing LP incentives. However, in the long run, widespread token circulation will help increase its market awareness and value stability.

DeFi researcher Ignas has proposed an interesting perspective, hoping that FRIEND will not enable transferability and instead create a wrapped FRIEND, wFRIEND, which can be listed on exchanges without affecting the functionality of the original token. However, personally, I don’t see much difference fundamentally, as once wFRIEND is listed on an exchange, on-chain traders can still buy wFRIEND from the exchange and then unwrap it to provide liquidity. Therefore, the key lies in how friend.tech balances token liquidity, transferability, and the stability of platform functionality to achieve long-term value growth for FRIEND tokens.

Of course, while observing the FRIEND trading data, I noticed an interesting phenomenon. In the first two to three days after the token was listed, although the total amount of buy orders was significantly higher than sell orders, the number of buy orders was much lower than the number of sell orders. These transactions often involved single orders with amounts ranging from thousands to tens of thousands of dollars. Based on data from a specific moment on May 5th, within the past 24 hours, although the total transaction amount of buy orders was 15% higher than sell orders, the number of buy orders was 70% lower than the number of sell orders. However, starting yesterday, there have been multiple orders with extremely small amounts, even less than $0.01, equalizing the number of buy and sell orders. These transactions are likely to be wash trades executed by bots, and the motives behind them are unclear. We cannot determine if these operations were carried out for a specific purpose. This phenomenon undoubtedly adds a sense of mystery and uncertainty to FRIEND. However, as of 5:15 pm on May 7th, the number of buyers for FRIEND continues to decrease, accounting for only 1/10 of the number of sellers, while the transaction amount does not differ much.

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