The New PaaS Model: Demystifying the Market Strategies of Friend.Tech’s Top Players

Friend.Tech and its core gameplay

Friend.tech has been introduced in detail. It is a Twitter-level real-name application for selling private room tickets. The ticket price is determined by mathematical formulas and supply and demand. After admission, you can directly communicate with KOL. The key words of the core gameplay are (3,3):

(3,3) What is it? A strategy that in theory makes a profit for everyone.

What about being more specific? That is to say, “If you hold it, I won’t sell it, and we promise each other not to let it go.” Everyone can share and maximize the benefits before the collapse.

Driven by OlympusDAO, (3,3) has become the most out-of-circle MLM meme in the crypto world, bringing considerable economic benefits to participants.

Back to Friend.tech, what role does (3,3) play in this new game?

In fact, this strategy is very simple: assuming that Xiao Ming’s Key is worth 0.1ETH, his friend Xiao Wang’s Key is also worth 0.1ETH. If they buy each other’s Key, the first income will be 5% of the handling fee (the other 5% goes to the project side). More importantly, according to the price curve (bonding curve), the value of the Key of both of them will rise to 0.12ETH. . Next, Xiao Ming continued to look for another friend Xiao Hong, and they also completed a (3,3) commitment/transaction. As this process continues, the assets of all participants will increase in value significantly. If this continues, the assets of all participants in this game will fly into the sky with their left foot and right foot.

If it doesn’t crash, everything looks fine.

Let’s start with the crash analysis today and talk about why Friend.tech is so good.

PaaS - Ponzi as a Service Decentralized Ponzi as a Service

Fortunately, Friend.tech provides a new paradigm for monetizing influence, allowing everyone to create their own Ponzi with a low threshold. These Pond’s trust and value foundations are personal influence and social interaction, providing a natural and more direct breeding ground for imagining communities.

The basis of everything: the realization of influence

Influence is valuable. In this day and age, it’s a big skill to have people listen to you, to take the time to read your pictures on the toilet instead of selling meat on the ABCFP station.

No matter inside or outside the circle, big or small, the biggest pain point for every internet celebrity is always how to realize their influence. Don’t look at the daily influence on Twitter, the cheers in the circle, and the heroes winning food and shadow. How to convert influence into considerable income is still a problem.

There are more traditional methods, such as bringing goods, or promoting on the website; you can also be your own trader and preach sincerely. The former, when money comes in quickly, consumes one’s credit, and there is a risk that the platform with goods will overturn; the latter, when money comes in slowly or not at all, also consumes one’s credit and even money.

In the Web2 era, content creators usually earn income through subscriptions and rewards. The main business of financial Vs is not investment, but opening QQ groups on the planet to collect subscription fees. In the Web3 era, most people have added some new methods to the traditional monetization model, but they still have not deviated from the rut of bringing goods. Is there any way for everyone to make money instead of the vicious internal friction of “either you pick my pocket, or I pick your pocket”?

Then, Friend.tech came along. A solution to the problem was given: “Family members, let’s make a round and kill others together!”

MLM schemes are common in the world, but Friend.tech is not.

How did Friend.tech achieve this usual innovation and attract a large amount of funds and traffic?

trust and community

Trust is the primary consideration in the (3,3) strategy. (3,3) Although it is the optimal solution in game theory, this strategy is essentially an unstable structure. Most participants have thought about the question “when will I quit?” It is just a matter of time. . In Friend.tech’s (3,3), Key holders jointly form a community and community under the “flag” of their KOLs, building a higher trust threshold.

KOLs are individuals in the virtual social network, and their value and credibility become the anchor that supports the entire Friend.tech ecosystem. This is not a very new revelation. Just like in ancient times, real names were required to issue personal tokens. KOLs use their number of fans and reputation on the Internet to endorse: the size of the traffic itself is a proxy for credibility.

Although the rug may come a little sooner than expected: during the day, they vow to hold hands and say they want to be a family, but in the middle of the night they smash the market; or they may fake it and be “cleared out” by stealing their accounts. Common routines, no need to go into details. Credit itself is used for consumption, making money is not shabby. In horizontal comparison, Friend.tech’s credit benchmark may be relatively high - in the forest, just run a little faster than your companions.

In terms of “running faster than others”, Friend.tech’s natural social attributes are a silent entry point: for Pond’s, marketing is everything, and social interaction is the best marketing behavior. Friend.tech has several small-plate settings under the big plate, which has given rise to a variety of marketing methods suitable for every room. We will discuss this phenomenon in more detail later.

Fool’s One Click and Broken Window Effect

Once we find a way to monetize traffic or reputation, the next question is how to implement it more easily and quickly. The method provided by Friend.tech is very simple and one-click, and does not require manual coding or tedious steps. Anyone can become a homeowner themselves. It has been proven countless times in the Web2 era that every additional step may lead to a large loss of potential users.

MLM bureaus have low entry barriers, which is not always a good thing. If there are too many stocks, the existing funds will be dispersed, which often means a faster collapse. Friend.tech provides a platform for mutual MLM, but people do not openly use it under the banner of MLM. Instead, it emphasizes social interaction—key’s essential function is to interact directly with KOLs. This name and banner are very important to convince more people during the project and community growth stages, although it does not affect the results of every MLM bureau.

Ordinary MLM is a chicken battle royale, but Friend.tech, under the banner of social networking, has created an atmosphere of “we can form a team to cut leeks”. Everyone can share a share of leeks and coexist harmoniously on the platform. better. In such a harmonious atmosphere, credit has become something shared to a limited extent:

• “He also built a chat room on Friend.tech.”

• “He didn’t run away. I definitely won’t run away.”

• “Even if he runs away, I won’t run away.”

• “He has already run away. I am running slower than him which is pretty good.”

Of course, this phenomenon also has an inappropriate summary called: “broken window effect.” When everyone is monetizing traffic in this way, the question of “should this be done” is skipped intentionally or unintentionally. At least it has less psychological burden and higher community acceptance than doing it alone.

Who is making the big difference at Friend.tech?

Since Friend.tech is defined as “Ponzi as a Service, PaaS” and is a to B business, we might as well regard the individual participants on Friend.tech as enterprise/project/self-employed entities. So it is logical that we can use criteria such as market capitalization (Market Cap) and trading volume (Volume) to observe them.

We ranked according to the historical highest market capitalization (i.e. All-time-high Market Cap) and current market capitalization, which is specifically expressed as the price of Key Share on Friend.tech. A total of 14 individuals were screened out, as follows. This table was created in mid-October 2023, about 10 days have passed, and the rankings have not changed much.

This table refers to @cryptokoryo’s Dune table Friend Tech。Organized into Who’s on Friend.tech ，excerpts are available here .

The price of the key of Friend.tech founder Racer basically does not see Racer interacting on social media. This curve can basically represent the performance of Friend.tech in the market - the popularity in the market reached its peak in mid-September, and gradually Down, the area is stable.

This article was written in mid-October (see the picture on the left). Comparing the chart and the price curve, the number one market value at that time was Vombatus_eth. Although the curve is stable and the price is satisfactory, the number of holders is small (34 people). Most of the chips are concentrated in the hands of individuals, more than 70%. Returning to social platform

Sure enough, in late October (see the picture on the right), news broke that “Vombatus, the former leader of friend.tech, sold 176 Keys (worth 850 ETH) and switched to New Bitcoin City.”

Among these 14 individuals, those whose chips are too concentrated in the hands of individuals include machibigbrother (accounting for 60%) and MURPHY_WIFE (coinn_lover, accounting for 70%+). The former barely posts relevant information on social platforms to attract buyers, and the latter only has 110 followers on social platform X.

Among them, there are three others whose individual shareholdings appear to be quite satisfactory, including Christian2022.mid (27%), HanweChang (17%), and CL207 (10%). What does it mean to be average? According to the setting of Friend.tech PaaS, each individual on the platform is a business, and in crypto projects, it is normal for team tokens to be between 10-20%. Looking back at the identities of these three people, Christian (NextGen Ventures) and CL207 (Fairy Capital) are both investors, and HanweChang is also an NFT Degen. These identities and experiences should provide certain theoretical guidance for token economy and distribution.

The remaining 8 people have less than 5% of their individual chips, and 5 of them have less than 1%. Unless there is a combination of multiple wallets and X accounts, these people will be true decentralization advocates.

In addition, at least judging from the identities of these 14 big guys, the overlap between Friend.tech and the NFT circle is quite high, including Herro, Hanwe, Machi Big Brother, dingaling, Cbb0fe, etc. It cannot be ruled out that laundering was used in Key transactions. The method of wash trade is used, but there is no excessive screening here. The cost of money laundering transactions on Friend.tech is much higher than purely on-chain, because each Friend.tech account needs to correspond to the web2 social platform, which means that multiple sets of email addresses/phone numbers need to be provided. and other information.

Market Strategies of Top Players

Low investment + decentralization: no marketing but king

Three of the top players in Friend.tech only paid the entry fee (0.02-0.2ETH) and did not invest anything else. Moreover, their token holdings are very dispersed and the room is highly decentralized.

These three big guys are:

1. 0xRacerAlt - the real insider
2. HsakaTrades - TOP traders
3. Cobie - OG

Through data analysis, we found that this person has some common characteristics:

1. Key holding addresses are dispersed: both the supply (Supply) and the number of holders (Holders) are large, and the number of key holdings per person is less than 1.5. This means their room has a higher consensus level.
2. Key has large trading volume: From the perspective of total trading volume, these three are ranked among the top three among the 14 big guys, while the total trading volume of the remaining individuals is less than 3000 ETH.
3. Profitable exit decision: From the perspective of profitable exit, Friend.tech founder Racer and senior trader Hsaka Trade have both successfully exited profitably, with profits reaching 271.3ETH and 114.8ETH respectively (calculated at a price of US$1600-1800 per ETH) , equivalent to US$200,000-500,000). And Cobie appears to be running an experiment that shows no signs of quitting just yet.
4. Get in early: They started participating three days before Friend.tech launched (August 10). Friend.tech’s private beta was by invitation only, and it achieved trading volume of around 4,400 Ethereum (over $8 million) on the first day.
5. Their portrait is: having their own reputation, work and profit methods, not relying on Friend.tech to make money, but more like posting some relevant information on Friend.tech for entertainment, interest, or experimental purposes from time to time:
6. Cobie hasn’t actively tweeted since June 2023, only replying; UpOnly’s last update was in December 2022.
7. Racer’s X account is in external invisible mode.
8. Hsaka became more involved in deal discussions.

The drunkard’s intention is not to drink: take the opportunity to build a strong personal brand

There is such a group of smart people who discovered that Friend.tech is not only a platform that can realize influence monetization, but also an opportunity that can be leveraged. For them, Friend.tech is a method and structure that I can use to build a speculative channel to reversely promote personal parallel brands. Among them, the most obvious examples are 0xCaptainLevi (Levi) and HerroCrypto (Herro).

Common traits between these two individuals on Friend.tech include:

1. With the investment of its own capital, the net inflow into Friend.tech exceeded 100-150ETH.
2. Its token holdings are diversified and its price curve remains pretty nice.

Levi has been committed to creating his own parallel community from the beginning. In the first phase, the community was called BLYC (BoredLeviYachtClub), and after October, he depersonalized it and renamed the community brand GamHaus. Levi’s primary promotional channels include the public domain (X) and the private domain (Discord).

On the market side of his parallel community, the following strategies were adopted:

• Utilizing awareness: Cleverly using the brand awareness of BAYC (Bored Ape Yacht Club), users do not need to remember a new brand and quickly open up the market.
• Family members recognize each other and interact in the community: The BLYC community is marked by its unique diamond and lightning (💎⚡). This method has been widely used by Link3 and Lens Protocol. The main purpose is to allow community members (“family”) to recognize each other and interact with each other. Buy keys; there is even exclusivity, that is, only buying tokens from community members.
• Shape your personal image: The L in BLYC refers to Levi personally, and also issued a personal token $LEVI on August 20. Levi actively promoted BLYC’s UGC (user-generated content) activities throughout mid-to-late September. These UGC contents were mainly used to enhance Levi’s personal idol image.
• Instant rewards: Levi will encourage UGC behavior through purchases and attention, encourage joining the community, etc.
• Rebranding: After its own brand became popular, Levi rebranded. On the one hand, it removed the traces of BAYC, and on the other hand, it depersonalized and made the brand more universal, laying the foundation for attracting more business cooperation in the future.

Among these market strategies, some methods are tried and tested, the most important of which is the immediate reward strategy, which continuously stimulates user participation and interaction. for example:

If you change your name suffix to my community imprint, I will buy your Key.

If you put me on your watchlist, I will buy your Key.

If you do a good job in uploading and promoting your UGC, I will buy your key.

Act quickly and deliver quickly. Don’t be afraid to repeat important messages to increase community confidence, telling everyone “I’m not running away” 800 times a day. In addition, establish your own community-specific language (“gm @friendtech”); put forward personal opinions, continue to output, and maintain your personal image, but don’t be afraid of making mistakes. Conduct regular AMAs, forward any information related to yourself, and regularly present your achievements with data to keep social media active. Levi has done a good job in these aspects. Professor Jo (a major Korean KOL) and Herro have helped with publicity and have frequent interactions.

Herro also performs very well in the social market, posting a large number of tweets every day, including about 10 a day related to Friend.tech. Similar to Levi, she is very skilled in brand promotion, market perception and strategic application. She is good at motivating users in a timely manner, maintaining her own room (3, 3) belief in not collapsing, and regularly demonstrating her achievements through data. If Levi focuses on building his own parallel community, then Herro also has hers with three notable features:

First, she has her own NFT virtual idol brand called AnataNFT. She has used virtual idols to create tutorials and promotions for Friend.tech, which has allowed Herro’s success on Friend.tech to effectively feed into the development of her own project brand.

Secondly, she promoted two projects related to Friend.tech at the same time, one was frenbot and the other was frenlend. The former in particular, as Herro started talking about frenbot and its token $MEF in early September (the naming is clearly borrowed from MEV, thus clearly conveying the nature of the project at a glance), can’t help but make people think. From the end of September to the beginning of October, she began to create a “scientific scoring“ scientist character.

Third, starting from mid-October, Herro began to mention more about Friend.tech’s new opportunity for imitation disks—New Bitcoin City. She leverages her influence at Friend.tech to direct attention to other opportunities.

Generally speaking, Herro’s publicity strategy before mid-September was a bit like an analyst, relatively objective and monotonous, mainly recommending potentially profitable keys, displaying charts, etc. However, over time, she gradually developed her own unique style, discussing “about me and my projects” in a variety of ways, rather than just analyzing others, which is a more obvious project mentality.

Finally, it’s worth mentioning 0x5f_eth, who is obviously a Punk holder and someone from the Punk OG community. He has been committed to building his own image of an analytical KOL and a dengen community. His successful promotion on Friend.tech may have in turn boosted user engagement on his own social platforms - his view count is very impressive (often over 10K) compared to his follower count (4.7K). After playing for two months, he finally realized the potential of Friend.tech and started creating his personal AMA brand “Between the Two Hoodies“.

Anonymous and Nameless: Born for Wool and Arbitrage

There are some users of Friend.tech with high market value. Their identities and portraits on social media are still a mystery, somewhat like “meme tokens”.

This table has two rows of data for Vombatus. Among them, Vombatus_eth 1 is his data in mid-October, and Vombatus_eth 2 is his data after rug. He is still his largest holder, and has not fully recovered his capital.

According to data from the According to Murphy’s own description, his basic strategy is very simple: privately invite friends to buy his wife’s Key, and a full refund will be given after the purchase. The buyers are all Koreans. He explained that this is because “I can get my wife more interested in cryptocurrencies.”（I realized that I should make my wife’s account (@coinn_lover) expensive, because she doesn’t know anything about crypto and I wanted to get her interested.）。

Strategy description：https://twitter.com/murphys1d/status/1713801758814941354

Fee refund: https://basescan.org/txs?a=0x4ec86d29Bd3a1926CA390bc4E8f3F0c2BcC816bA

Vombatus’ X platform account has long been characterized by a style of “meme culture” and “shitposting”. I think it cannot be regarded as “rug” (fraudulent behavior) now. It is a bit similar to the fact that the project party cannot always recharge AiDianfa Faith and chooses to sell part of the tokens to obtain profits. However, he is still his largest holder, has not fully recouped his capital, and predicts that there will be multiple strategies to choose from in the future. He has also been actively promoting New Bitcoin City since October 10.

Transcend

Cbb0fe seems to be the one who sees friend.tech most clearly among all people. It is obvious that he has gone beyond enhancing his personal popularity or building his own community or brand through Friend.tech. He launched it on the Friend.tech platform on 10/18 Ponzi Design Services has successfully created a client named CBBuuull, which is amazing.

Summary and Outlook

As a hit in the dull bear market, the most eye-catching thing about FriendTech is that it brings a new answer to the age-old Web3 problem of monetizing traffic, namely PaaS (Ponzi as a Service), giving KOLs a new method and tool. .

The “Key” model may become a new model for paying for content

This is more of an “investment” than the usual tipping or subscription methods. Driven by real benefits, the atmosphere and development of the fan community will have a new paradigm.

As a method of monetization that does not require carrying goods, it avoids some traditional reputation risks, but it also creates new and more direct problems, such as (3,3) making Key’s transaction a hard-core and compulsory one. In PVP games, when the benefits are big enough, we shouldn’t count on conscience. This can lead to a series of problems, including market value fluctuations, rat positions, midnight liquidations, etc.

The eternal problem: How to run a “MLM marketing bureau” for a long time

In addition to money, content or ideals are needed. The collapse of an MLM is usually due to a lack of new capital inflows or people switching to other MLMs. FriendTech’s answer is that they focus on social and content, which may make some traffic stay. Similar to Stepn, some people are finally using it as a running software.

On the other hand, Bonding Curve’s own market value cap problem is both a restriction and a protection for MLM bureaus. It is difficult for big funds to participate, which is a problem. However, lower liquidity and fewer participants may make community management easier, which also leaves some room for KOLs who seriously operate the Friend.tech platform and those who use Friend.tech as a means to attract traffic.

Friend.tech’s Ecosystem

Although the project team is likely to appear behind the scenes, these ecological applications look natural and intuitive. From tools to “derivatives” markets, the development of the Friend.tech ecosystem shows that projects can develop their own ecosystem on a suitable basis to attract more funds and users, while also bringing in more pyramid schemes.

Eliminating all possible problems, this ecological development tells us:

Living things always find their own way to survive. Those that cannot be found usually lack vitality.

Notes

Let us recall Olympus DAO, the entity that re-innovated Ponzi Theory in the currency circle in 2021, and the popular (3,3) in their community.

Don’t panic, this is just a common table in game theory. The vertical columns represent the optional strategies of player one, and the horizontal rows represent the optional strategies of player two. Here, the two players each have three choices; each in parentheses The first entry represents player one’s income under this strategy combination, and the second entry represents player two’s income under this strategy combination. Now let’s review (preview) the most bizarre prisoner’s dilemma in game theory:

First of all, common sense in the real world is that those who confess will be given leniency and those who resist will be given stricter punishments, so the penalty for being convicted if you confess will be less than the penalty for being convicted if you resist.

As can be seen from the table above, if both suspects remain silent, the sentences for both suspects will be half a year; and if both suspects choose to confess, their sentences will rise to two years each. Therefore, it is obvious that the best result for both suspects is to remain silent. But such a result is often difficult to achieve, because they will find that if they choose to confess, if the other party is silent, they will be released immediately; if the other party also chooses to confess, they will be sentenced to two years in prison. Choosing silence can lead to five years in prison. Therefore, in both cases, confession is the better option. In game theory, achieving such an outcome is called a Nash equilibrium.

Let’s go back to the Olympus DAO Ponzi game at the beginning. The term (3,3) represents the ideal situation in which everyone’s income is maximized if everyone chooses to stake. The return rate of other strategy combinations is lower than (3,3), so staking has the highest return among all possible strategies of Olympus MLM Bureau, so all participants should choose staking.

With the widespread spread on Twitter, (3,3), which represents the best possible outcome in game theory, has become a meme out of the MLM bureau, and this meme has indeed brought a lot of economic benefits to the participants of Olympus DAO. Of course, this was all before the crash.

Disclaimer：

1. This article is reprinted from [Aki Network Reserach]. All copyrights belong to the original author [Ming, Roy @ Aki Network Reserach]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.