Discovering Friend Tech
A few months ago, we talked about Optimism, (for those who don't remember, please click here) about its ambitious goals and the collaboration with Coinbase. From this collaboration, BASE was born, a project incubated within Coinbase but with the plans to gradually decentralize with the ambition of bringing the next billion users on-chain. (click here base.org)
BASE is built as a second-layer (L2) solution on Ethereum, with the necessary security, stability, and scalability (to some extent guaranteed by Coinbase's reputation), but with extremely low costs and the incorporation of the latest Ethereum blockchain features, such as account abstraction (ERC4337 ... we'll talk about it soon), simple APIs for developer transactions without gas fees, and dedicated wallets for smart contracts.
Based on this very recent opportunity, the Base network was officially launched on August 9th and we already have an interesting case to discuss.
Launched in beta on August 11th, Friend.Tech generated $1.12 million in fees on August 19th (following the widespread crypto market crash in the previous days). Technical timelines for writing and sharing this article don't allow us to comment on data that is moving at an incredible speed, but for those who are savvy an update and insight into the phenomenon can be found clicking here.
Friend.tech is a decentralized social application that originates from the guy who had launched TweetDAO, a decentralized structure to control a Twitter account (oops, X) and Stealcam (the site is currently offline), an application aimed at monetizing images from art to selfies.
To access Friend.tech, which is connected to X but also functions as a decentralized wallet (it's essential to value it to gain access), an invitation is currently required. Beyond advertising campaigns with invitation codes published on X, the number of users is significant just 12 days after the launch.
All these phenomena fall within the trend of capitalizing on online reputational capital through the so-called "social tokens," targeting a digitally sophisticated audience that seems ready for mass adoption. Social tokens are nominally utility tokens with which prominent figures in the digital world (influencers, artists, athletes) create their own currency that fans can use to buy goods or services and even influence artistic choices or specific activities of the token issuer.
We can consider them as small advances on future sales or mini pools for consulting fans or trusted friends to guide new strategies – essentially, using crypto terms, mini Airdrops or mini DAOs.
Friend.tech aims to spread it, allowing everyone to earn by promoting their own image or online content. Let's give a couple of examples: a particularly skilled trader sells subscription services, or a highly famous influencer has exclusive content for top members of their community. These mechanisms are already known, but by accessing them with a social token, users can access the course, use the content, and if the trader is highly successful and the influencer becomes even more important, the tokens could increase in value, benefiting those who bought them.
Obviously, in this dynamic, users are more content to buy the course or the curious selfie of the current star because they think they can resell it, and they will work to highlight the course's value or the fame of the star to increase the token's value.
Shortly, if the online image is a real capital and if an X account can become a collectively managed opinion leader, the associated tokens allows us to share that value, so much so that initially, Friend.tech's social token was called SHARE, and only recently has been renamed KEY, with a message on X that has garnered almost 750,000 views, stating: "We’ve renamed Shares to 𝗞𝗲𝘆𝘀. The original name was a placeholder during development and we think Keys better illustrates their purpose as in-app items used to unlock your friends' chatrooms."
The explanation is simplified, and more likely, due to its success, someone revisited the entire legal framework and found the name risky, especially given US regulations and the SEC's concerned attention on the crypto world.
But getting to the substance, it's not enough for me to make a profit by reselling the token to define it as a security. There are some clues to pay attention to regarding how the token is proposed and distributed, how the chat/group is managed, and what promises the founder makes to those who buy the keys.
The first example that could certainly face requalification risks is that of a trader who, through their Keys, offers copy trading programs, which might stretch the definition of a utility token.
Exchanges are not affected because, for now, no Keys or access to Friend.tech go through an exchange.
However, the app itself could be worth keeping an eye on to understand the evolutions of business models in the digital asset world. The homepage menu, in addition to highlighting the wallet balance, the ability to search for friends and manage chats, provides access to a page for Airdrop points, the current use of which is unclear, the ability to invite friends, and a ranking of each member.
Starting off strongly and perhaps unexpectedly, Friend.tech promises to highlight new decentralized business opportunities and provide us with opportunities for deep reflection on the meaning and opportunity of buying a friend, who is actually an informal partner in a business that includes both my and their online visibility.