In-depth analysis of friend.tech V2: core functions, token distribution and room for growth
Original title: "Everything you need to know about friend.tech V2"
Original author: Karen, Foresight News
Friend.tech, the Web3 social transaction protocol that once became popular overnight, launched its V2 version during the May Day holiday. Although its token experienced a process of high opening, low closing and then rebounding, friend.tech has once again become a hot topic thanks to its new paid group Club feature, unique fee design mechanism and LP APY of nearly 600% (even reaching 1400% yesterday).
The friend.tech V2 page continues the simple design style. Taking the official website as an example, there are Club and creator search boxes at the top. The left navigation bar is divided into wallet, activity and Chat modules from top to bottom. Among them, the wallet displays the ETH, FRIEND, Keys and mining rewards held; the activity page lists the Key trading activities of the creators you follow; the Chat page aggregates the Clubs and creators holding Keys to facilitate user social interaction.
Friend.tech V2 Core Function: Paid Group Club
The paid group Club is the biggest highlight of friend.tech V2. On the basis of the value of V1 monetization KOL and creators, the Clubs space is added, which is equivalent to the existence of paid groups. However, those who join the group later need to pay a higher price, and transactions only support friend.tech platform token FRIEND, and each transaction will be charged a 1.5% fee (this part will be discussed later). Key holders can also vote for the president of their club at any time. The president of the club is responsible for managing the club and selecting moderators.
The price of the Club Key follows a specific formula. The price of the next Key is S^2/100 (in FRIEND), where S is the number of current Keys. The following table is a price chart of the Sth Key counted by the author for readers' reference.
Anyone can create a Club of any theme. When creating a Club, you can choose the standard curve (according to the above formula) or a dedicated curve that is 10 times the price of the standard curve. If you choose the standard curve, when the number of people in a Club reaches 50, the Key price is 25 FRIEND; if you choose the dedicated curve, at this time, the Key price is 250 FRIEND. It should be reminded that different Clubs can have the same name, so you need to pay special attention when trading.
According to Dune data, as of the time of writing on May 6, the number of Clubs on the friend.tech platform has exceeded 110,000, the number of Club members has exceeded 61,592, the number of transactions has exceeded 450,000 times, the total Club transaction volume is close to 17 million FRIENDs, and the total fees generated by friend.tech within 24 hours have reached US$820,000.
Source: Dune
According to the market value of Club, the top two groups of friend.tech Club are "Ansem's Army" created by trader Ansem: No. #59528, Key price is 2766 FRIEND, and there are 371 members in the group, and "Fight Club" created by friend.tech founder Racer: No. #1, Key price is 2371 FRIEND, and there are 125 members in the group.
In addition to Club, friend.tech said it will also launch new features such as Keydrops, Memeclubs and Pinned Rooms to bring users a more diversified social experience. Memeclubs alone are enough to make the community excited and imaginative.
Platform Economy and Token Distribution
When friend.tech released the V2 airdrop, each point could be exchanged for 1 FRIEND, but at the beginning, only 10% of FRIEND could be claimed. After joining a Club and following 10 people, the remaining 90% could be claimed. This helps to motivate the platform activity to a great extent in the short term, but it has also been complained by community users.
friend.tech has not enabled token transferability. Currently, it only provides token exchange and FRIEND/ETH liquidity services on its own platform (DEX "Bunnyswap" https://www.friend.tech/lp). Due to the high returns provided by liquidity on friend.tech's own platform (currently close to 600%), the current liquidity of FRIEND/ETH is close to 47 million US dollars.
On friend.tech, users need to deduct 1.5% of the exchange fee for FRIEND/ETH pool exchange, and 1.5% for Club Key trading. These fees will be shared by LP providers (in the form of FRIEND). In addition, friend.tech will allocate a total of 12 million FRIEND incentives to LP providers in the next 12 months.
That is, providing FRIEND/ETH liquidity on friend.tech can obtain three kinds of benefits, including 1.5% exchange fee (current APY is 1071%), 1.5% Club Key transaction fee (current APY is 202%), and sharing 12 million FRIEND incentives (current APY is 135%).
Regarding the distribution of tokens, friend.tech has stated that its investors have agreed to give up the right to sell tokens to users, and the tokens will be controlled by users, and the points of venture capitalists including Paradigm will be distributed to users.
However, friend.tech has not announced the detailed details of the token supply, which has also aroused doubts from the community. According to the BaseScan page, the current maximum total supply is 91,082,420, and the contract details show that the tokens have no upper limit. The official LP page of friend.tech shows that the circulating supply is 79.1 million FRIEND (combined with Dune data, the circulating supply is the claimed token airdrop and token incentive release), and the circulating market value is US$204 million (calculated based on the FRIEND price of US$2.65 as of the time of writing).
However, in August last year, when friend.tech was first launched on the platform, it stated that it planned to distribute 100 million points in 6 months (every Friday). According to the current exchange rate of one point for one FRIEND, the airdrop volume is 100 million, and then add the 12 million FRIEND incentives allocated to LP providers in the next 12 months, the total supply will be at least 112 million.
Who are FRIEND holders and LP providers?
According to Dune data produced by @willprice, the address that provides the most liquidity on friend.tech is owned by Taiwanese singer Huang Licheng, who provides 1.7588 million FRIEND liquidity (on May 7, he spent 661 ETH to purchase nearly 800,000 FRIEND at a unit price of 2.57); followed by the address starting with 0xe3879b, which provides 625,500 FRIEND in LP, and 263 ETH and 42,552 PRIME liquidity in Aerodrome ETH/PRIME. The fourth, fifth and sixth users are @bitgoten, Christian2022.eth (Partner of NextGen Digital Venture) and Cryptoyieldinfo, etc. NFT KOL dingaling also holds more than 410,000 FRIEND, but has not yet pledged.
What is the upside potential of FRIEND?
The author believes that in the context of the recent widespread controversy over token airdrops, friend.tech distributed 100% to the community, and the token launch was relatively successful, which also gave FRIEND the practicality of payment in Clubs. It can be imagined that with the increase and development of Clubs, the FRIEND tokens paid by users will also increase. These tokens are essentially locked in the system, forming a stable value support. In addition, friend.tech provides LPs with generous rewards, which will also attract more FRIEND token liquidity locks.
As mentioned earlier, friend.tech has not yet enabled token transferability, which means that CEX has no way to list FRIEND tokens. The only way to obtain FRIEND is to claim airdrops or buy FRIEND with ETH on the friend.tech platform. At the same time, users can also combine FRIEND and ETH into LP to provide liquidity and earn rewards.
What will happen if friend.tech turns on the transferability of tokens? The author believes that this will greatly improve the liquidity of FRIEND and further drive FRIEND into the price discovery stage. However, this may also lead to the cancellation of the 1.5% exchange fee mechanism originally set by the platform, thereby reducing the rewards of LP. However, in the long run, the widespread circulation of tokens will help improve their market awareness and value stability.
DeFi researcher Ignas put forward a unique point of view, hoping that FRIEND will not enable transferability, but instead create a packaged FRIEND, namely wFRIEND, which can be launched on the exchange without affecting the function of the original token. However, I personally think that there will not be much difference in essence, because once wFRIEND is launched on the exchange, on-chain traders can still buy wFRIEND from the exchange first, and then unpack it to provide liquidity. Therefore, the key lies in how friend.tech can balance the liquidity and transferability of tokens with the stability of platform functions to achieve the long-term value growth of FRIEND tokens.
Of course, in the process of observing the transaction data of FRIEND, the author found an interesting sign. In the first two or three days after the token was launched, although the amount of buy orders was significantly more than the amount of sell orders, the number of buy orders was much lower than the number of sell orders. Such single buy orders of thousands or even tens of thousands of dollars were common. Calculated based on the data of the past 24 hours at a certain moment on May 5, although the total transaction amount of buy orders was 15% higher than that of sell orders, the number of buy orders was 70% less than that of sell orders. However, since yesterday, there have been many buy orders with very small amounts, even less than $0.01, in the market, which equalized the number of buy orders and sell orders. These transactions are most likely to be brushing orders executed by robots. The motivation behind them is still unclear, and it is difficult for us to determine whether this is an operation for a specific purpose. This phenomenon undoubtedly adds a touch of mystery and uncertainty to FRIEND. However, as of 17:15 on May 7, the number of FRIEND buy orders continued to decrease, only 1/10 of the number of sell orders, while the transaction volume was not much different.
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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