Nick Almond

Crypto Twitter was in need of something new. The recent waves of hyper-degenerate memecoins and <a href="https://blockworks.co/news/hamsters-gambling-binance">hamster-racing-fuelled GambleFi</a> ended in a storm of painful rug pulls. But fear not, there’s a new crypto craze in town: Friend.tech.



Friend.tech is a platform to tokenize yourself, or perhaps more accurately, marketize your online identity.



And so far, it’s a roaring success.&nbsp;



Friend.tech reveals the extreme potential of social layer decentralized apps (dapps) to become mechanism-powered money printers, with roughly <a href="https://dune.com/msilb7/friendtech-on-base-activity">$7 million in fees generated in its first week</a>, half of which got distributed to creators on the platform. 



Sounds great. So, what’s the problem?&nbsp;



One could wax philosophical here and draw concern over the trend of Web3 tools being used to hyper-commodify human personhood and identity, as seen now here and before with <a href="https://blockworks.co/news/worldcoin-privacy-concerns">Worldcoin</a>. One could argue that these dapps are reducing us to the incentive chasing hamsters at which we’ve been throwing our magic internet money. 



But I actually don’t think we’ll need to worry about any of that.&nbsp;



The real problems are with Friend.tech’s economic sustainability. The application is based on an exponential bonding curve which is, well&#8230; exponential. 



<h2 class="wp-block-heading">Bonding curves and digital status games</h2>



Friend.tech effectively bridges the worlds of the old-school Web2 social media esteem games with the hyper-marketization-of-everything Web3 dynamic.



It achieves this through a “bonding curve” — a bit of smart contract wizardry first proposed by <a href="https://medium.com/@simondlr/a-bonded-curation-community-247f14a6de04">Simon de la Rouviere</a>. This allows a smart contract to generate a kind of synthetic market, where tokens can be bought and sold against a curve, in this case a (dampened) quadratic curve. 



Much like Uniswap, this means that you’re not waiting around for a counterparty to fill your trade: You can buy and sell tokens against a mathematically mediated market at any time.&nbsp;



With Friend.tech, what people are buying are “shares” of a personality on X, formerly Twitter, which have now been <a href="https://blockworks.co/news/friendtech-social-sec">hastily rebranded </a>to “keys” following regulatory fears of treading on the US Securities and Exchange Commission’s sacred ground. These keys allow you to gain access to a private chat room with your “portfolio” of crypto frens on X, where you can send them private direct messages and essentially run a group broadcast announcement channel. 



The idea taps into a long prophesied crypto vision of social tokens, whereby literally everyone can have a token. I myself have long thought the influencer + token combo was a path to “mainstream adoption.” And then, I put the idea back in the nightmarish dystopia box to worry about later.&nbsp;



But here we are now.



<h2 class="wp-block-heading">A conceptual fork</h2>



The idea of tokenizing your internet personality is not a new one; in fact, almost the exact same mechanism was launched two years ago with the ill-fated (and frankly terrible) Bitclout. The idea is so similar, right down to the bonding curve mathematics, that you might as well call this a conceptual fork of Bitclout.&nbsp;



So why is Friend.tech riding the hype wave, while Bitclout was almost universally panned? 



It all comes down to the execution.&nbsp;



Bitclout began with such a heinous invasion of digital identity that even Mark Zuckerberg would have winced. By preloading the app with Twitter&#8217;s top accounts and the promise of free Fugazi money, they managed to growth hack their way to being the talk of X. Bitclout also came with a bull market-tastic venture capital raise and public sale — they raised an obscene amount of money ($250 million), half of which is still in their Bitcoin <a href="https://blockchair.com/bitcoin/address/1PuXkbwqqwzEYo9SPGyAihAge3e9Lc71b">wallet</a>. 



Friend.tech didn’t do that. Instead, this iteration of tokenizing yourself was launched by one of X&#8217;s very own: 0xRacer, previously known for the short lived but brilliant little experiments such as TweetDAO.



Friend.tech has now led a rare app-centric hype wave, with the crypto community on X piling into their bonding curves and trading digital representations of each other. 



But I will reiterate here what you need to remember about exponential bonding curves — they are exponential. It’s like the pump is built in for day one. But nothing can pump forever, and the market is saturating quickly, pricing out almost everyone from creators&#8217; keys. It’s also worth remembering that exponential up also means exponential down, and the real test of Friend.tech’s longevity will be when this initial hype dies off. 



Of course, all of this could change. The app is backed by maestros of mechanism design Paradigm, so the game could well upgrade. As it stands though, Friend.tech will need massive inflows of new buyers to sustain its prices and put it in the running to be crypto&#8217;s next “killer app.”



If I was being difficult, I now could go on about Friend.tech’s questionable opsec implications and lackadaisical approach to <a href="https://x.com/nftnow/status/1693635196837347655?s=46&amp;t=h5fzhVN9u2Ubumo1ljWsfA">privacy</a>. I could flag the fact that our social apps of the future live in the adversarial cryptoeconomic world of blockchains and already, this app is an arbitrage bot <a href="https://x.com/arixoneth/status/1694039285970731080?s=46&amp;t=h5fzhVN9u2Ubumo1ljWsfA">playground</a>. I could moan about how we’ve reduced humans to market price data and hyper-financialized our souls. 



But honestly, I can’t help but feel a bit numb to it. We’re in a world with TikTok NPCs; nothing can surprise me now.&nbsp;



I despised Bitclout, but Friend.tech’s crypto-native origins here do make a huge difference. The fact that Worldcoin has so effectively re-priced grimy late-stage capitalist techno-atrocities makes this feel like a strong case of “degens gonna degen.” It’s mostly harmless, let them have fun. 



And that’s what it is, a bit of fun. Let’s not conflate Friend.tech with the broader social token use case set, which is vast and genuinely has the potential to unlock huge value in the creator economy (the OnlyFans crowd are already checking it out). Friend.tech, however, is a social speculation game, and at this point not much more — unless they could sort out that small bonding curve issue.



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<div class="wp-block-post-author-biography">Nick Almond (@DrNickA) is Founder and Architect of FactoryDAO, a next generation modular DAO creation protocol. </div>


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