Friend.tech is mostly harmless — for now

Let’s not conflate Friend.tech with the broader social token use case set, which is vast and actually has genuine potential

OPINION
article-image

Midjourney modified by Blockworks

share

Crypto Twitter was in need of something new. The recent waves of hyper-degenerate memecoins and hamster-racing-fuelled GambleFi 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. 

Friend.tech reveals the extreme potential of social layer decentralized apps (dapps) to become mechanism-powered money printers, with roughly $7 million in fees generated in its first week, half of which got distributed to creators on the platform. 

Sounds great. So, what’s the problem? 

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 Worldcoin. 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. 

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

Bonding curves and digital status games

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 Simon de la Rouviere. 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. 

With Friend.tech, what people are buying are “shares” of a personality on X, formerly Twitter, which have now been hastily rebranded 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. 

But here we are now.

A conceptual fork

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. 

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

It all comes down to the execution. 

Bitclout began with such a heinous invasion of digital identity that even Mark Zuckerberg would have winced. By preloading the app with Twitter’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 wallet

Friend.tech didn’t do that. Instead, this iteration of tokenizing yourself was launched by one of X’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’ 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’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 privacy. 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 playground. 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. 

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.



Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

4.png

Research

This months PPGC covered four main areas. Firstly, debriefing the progress and status of the mainnet implementation of the Ahmedabad hard fork. Secondly, a retrospective on the testnet phase of the Ahemdabad Hard Fork. Thirdly, an update on PIP-36 which involves replaying failed state syncs. Lastly, PIP-47 which pushes upgrades to the Polygon Protocol Council.

article-image

Institutions to test out the settlement of “digital assets and currencies” on a network that annually carries more than 5 billion financial messages

article-image

After Bitwise’s XRP ETF filing this week, one industry watcher notes: “Politics will determine whether this happens soon or in a few years”

article-image

Plus, a look back at some of the SEC’s biggest enforcement moves under Gurbir Grewal

article-image

The forward-looking financial system is being championed by several contributors to India’s UPI digital money system

article-image

Multiple teams are pursuing integration cross-chain and off-chain

article-image

An SEC spokesperson told Blockworks the Ripple judgment clashes with Supreme Court precedent and securities laws