Friend Tech: The Rise and Hidden Dangers of a New SocialFi Star

Against the backdrop of an overall slump in the cryptocurrency market, Friend Tech has emerged as a focal point of discussion. This new SocialFi product has undergone three stages of development since its inception and is currently experiencing a new surge in popularity.

Friend Tech officially launched on August 10, 2023, drawing widespread attention in the Chinese community on its first day. Its novel model, airdrop expectations, and innovative gameplay attracted a large number of users. On the day of launch, it generated 130,000 transactions, with 1,000 active buyer accounts and 500 seller accounts.

However, the popularity comes quickly and goes quickly. Three days later, the number of active buyer accounts dropped to around 300, and the trading volume fell to about 30,000 transactions. During this period, there was a lot of negative discussion about the product. It wasn't until August 19 that the official announcement of obtaining seed round investment from a well-known investment institution caused the popularity to soar again. The number of active buyers reached 4,000 in a single day, trading volume exceeded 500,000 transactions, and the total locked value (TVL) increased from over 1 million dollars to 7 million dollars.

However, the market did not continue to be enthusiastic; three days later, the excitement dropped again. The number of active buyers fell to just over 100, and the trading volume returned to its initial level, with TVL stable at around 5 million USD. After a quiet period of half a month, Friend Tech suddenly erupted again recently. The trading volume doubled compared to before, and TVL surged to 31 million USD, with independent accounts reaching 140,000. This marks a new wave of enthusiasm for Friend Tech.

Why Friend Tech Can Stand Out?

Compared to the once-popular but short-lived SocialFi projects, why can Friend Tech attract more real users for long-term participation? There are several main reasons:

1. High-quality user base. The entry of well-known institutions, project founders, and high-traffic bloggers from the English-speaking community has driven overall market attention. At the same time, its incentive mechanism fundamentally eliminates low-quality accounts and retains deeply engaged users.

2. Airdrop Expectations. In addition to providing homeowners with a 5% transaction incentive, Friend Tech also plans to distribute 100 million points within 6 months. The community generally expects this to be closely related to future token airdrops, with an estimated value of up to $2 per point.

3. Strong background. Friend Tech has received support from a top investment institution and is built on the Base chain, potentially gaining assistance from Base officials and Coinbase.

4. Meet the social needs of upward mobility. Friend Tech provides users with the opportunity to connect with high-level individuals and obtain one-on-one consultations at relatively low prices.

Potential Risks of Participating in Friend Tech

1. The profitability of robots is too high. Currently, over 140 robots have made a profit of 2.2 million dollars through Friend Tech, accounting for a quarter of total profits, squeezing the space for ordinary users.

2. The price curve is steep. When the purchase volume exceeds a certain level, the price gap between users widens sharply, which can easily lead to vicious competition and a stampede within the group.

3. The contradiction between product logic and profit model. The points incentive encourages long-term holding, but the platform and homeowners' earnings depend on frequent transactions. In the long run, this may lead to homeowners providing quality services benefiting very little, creating a negative cycle.

Overall, Friend Tech has captured a market gap and attracted a lot of attention. However, its product logic still has hidden risks, and future development needs to be observed. Investors should carefully manage their positions and weigh the risk and return when participating.