There has been a huge hype around the new social media platform friend.tech during the last months. Let’s have a closer look at this amazing decentralized application to figure out how you can best use it.
What is friend.tech?
Friend.tech is a decentralized social media app built on the Base blockchain (Ethereum Layer 2 chain by Coinbase). At the center of friend.tech are so-called keys. Keys are basically like shares of a friend.tech influencer which give the key holders access to the influencer’s private chatrooms and exclusive content.
But friend.tech does not try to build a new social network from scratch. Instead, it builds on the vibrant X (formerly Twitter) community by linking every friend.tech account to an X account. This means that if you want to have a direct channel to your favorite X influencer, you can check whether this influencer has a friend.tech account and if she does, then you just buy her friend.tech key and you immediately have a direct private channel to her. Pretty cool, right?!
How did we get here?
Friend.tech went live (beta release) on August 10, 2023, and has created a huge hype ever since. At the time of writing, the platform has seen almost 12 Mio. transactions and more than 1 Mio. unique key buyers and sellers. Friend.tech fees have cumulated to USD 23 Mio to date.
How can I make money on friend.tech?
One way to make money on friend.tech is to buy keys of an up-and-coming influencer at a low price and sell them later at a high price. Of course, the success of this investment strategy depends on your ability to identify the next big influencers.
Another way to earn money is to become an influencer yourself: Head over to X, build a fan base (if you don’t have one yet), and cash in on your fan base on friend.tech by having fans buy your keys. Each time that a user buys or sells one of your keys, the user pays a 10% fee, of which half (i.e., 5%) goes to you and the other half to the friend.tech treasury.
Yet another way to potentially make money is to just actively use the friend.tech app and therefore qualify for the platform’s airdrops. Friend.tech points are airdropped every Friday and might be tradable in the future.
How does the market for friend.tech keys work?
At the center of the friend.tech key market is an automated market maker (AMM) which calculates key prices. This means that users do not trade keys with each other but instead, they trade keys with a code-based (i.e., smart contract-based) AMM.
In the case of friend.tech, the AMM is implemented using a so-called bonding curve. A bonding curve is a mathematical function that determines the price of a token based on the available supply of this token. For friend.tech, we have the following quadratic bonding curve:
Price of next key = ((current number of keys)^2) / 16000 * 1 ETH
Let’s make an example, where we assume that for a certain influencer, there currently exists only one single key; i.e., only one fan has bought a key for this influencer. You now want to buy a key for this influencer as well. This means that a second key needs to be created for this influencer which you then buy. And the price for this second key is calculated by the AMM as follows: Price of 2nd key = (1^2) / 16000 * 1 ETH = 0.0000625 ETH. This is roughly USD 0.12 at the time of writing.
But remember that as a key buyer you not only have to pay for the key itself but you also have to pay a 10% fee which is split equally between the influencer and the friend.tech treasury. So, to buy the 2nd key of an influencer you end up paying 0.00006875 ETH (= 0.0000625 * 1.1).
What are the risks with friend.tech?
Amongst others, we see the following risks:
- Not battle-tested: Friend.tech is very new, only available as a beta release, and therefore not battle-tested.
- Missing transparency: There is very little information about the team behind the platform and no technical documentation or data protection concept you could check as a user.
- Forgery: Everybody can create fake celebrity accounts and sell keys for those fake accounts.
- Not tested and approved by app stores: The app is not available via the Apple App Store or the Google Play Store but only via downloading from the friend.tech website. Hence, you can’t rely on Apple or Google having checked the app.
- Potentially overhyped: There has been incredible hype around this app and chances are that this hype is not sustainable.
Step-by-step guide to setting up a friend.tech account
Step 1 – The friend.tech app is not available on the App Store or the Play Store. Therefore, head over to the friend.tech website, click on the menu in the top right corner of your browser, and click Install app.
Step 2 – Next, start the installed app and set up your account using either your mobile number or your Google or Apple account.
Step 3 – At the moment, friend-tech can be used on invitation only. Therefore, either get an invite code from a friend of yours or look for codes via Google or social media channels.
Step 4 – Then, link your newly created friend.tech account to your X (formerly Twitter) account.
Step 5 – Friend.tech keys are bought using Ether (ETH). Therefore, in the next step you need to fund your friend.tech account. The minimum deposit is 0.01 ETH which currently equals 19 USD.
Step 6 – Now that your account is funded, you can explore influencers via the Explore tab, buy their keys to build your key portfolio (see Home tab), and start chatting with influencers from which you hold keys (see Chats tab).
Continue your journey…
Thank you for reading our friend.tech guide to the end. To continue your friend.tech journey we recommend the following next steps:
This friend.tech guide is for general information only and does not constitute financial advice. Always do your own research before investing. See also our disclaimer.