This article is not a shill of friends.tech. I don't think the product of it's current form can scale to the extent that it replaces Twitter (perhaps it's not intended to). I do think it gives a good shot to luxury social media and can potentially inspire a new generation of online luxury experiences.

Thanks for the collaborative effort of my friends & key holders on Friend.Tech. Shout out to Siddharth from Superscrypt, Hongyu from Mercurius Club, Tony from Marine Snow and Steph from VESSEL.

Disclaimer: SevenX Ventures is an investor in Marine Snow.

What Friend.tech is and what it isn't.

There are plenty of resources available for you to understand how Friend.tech work. So in this article, I will just cover a few common misconceptions I have seen in the community.

• Friend.tech is a platform for exclusive content: Yes it looks like that, but arguably it's not the best use case for that. It's challenging to sustain exclusive content through means other than continuous subscription income. Sustainability relies on continuously producing new quality content. Maintaining a uniform user cost is essential to avoid information arbitrage to the fullest extent. Friend.tech does not offer sustained subscription revenue for creators. Rather, it only allows income via trading fees.
• Friend.tech is a platform where creators can gain popularity: Yes for the creators climbing the ranking board of "Top" or "Trending". However, as the price of keys increases, the user base that's able to afford the keys gradually shrink, making the creator's content available to fewer users over time. This doesn't scale the user base.

To figure out what Friend.tech actually is, I would like to get started with the most significant difference between Friend.tech users and normal social media users. Noticeably, Friend.tech users treat their money spent on buying keys as investments rather than expenditures. However, when dropping the money, they feel like they are supporting the creator with that entire amount of investment, rather than the actual 5% fee.

Therefore, I believe Friend.tech is a luxury social platform where users invest into the opportunity to deeply connect with a creator. I will break this statement down gradually.

Luxury

The definition of luxury varies, some refers to luxury in terms of luxury goods: the demand for which rise as its price rise. Some refers to it also as veblen goods, which has similar properties but is also associated with social status associated with owning/using the good. One of the really interesting phenomena we see in luxury/veblen goods is that the user pays a much higher price tag than the product's sheer utility. A LV bag can hold just as much as a normal bag, but the premium comes from outside of its item holding utility, representing status. Friend.tech fits nicely into the luxury bracket. It's expensive to buy a key. As one's key gets more expensive, more buyers would wanna drop in to chase the profits. It's a status symbol. Creators compare their keys' price with each other, the more expensive ones have more bragging rights. People feel like they are paying the entire amount for buying the key. Actually, they are only spending the 5% fees, which is much lower than the entire investment amount on the key.

Social

Friend.tech is an interesting social platform. Creators & users can only talk to each other if the user holds the creator's key. The user cannot communicate with the other users directly. The creator can talk to all users. It's not a platform where the users are on a equal level of the creator. Rather, the creator sits on top, being exposed to all the information while the user is only exposed to a limited amount of information posted by the creator.

Invest

Rather than burning X dollars on a one-off/monthly basis, users put in 100X dollars. It's a much larger amount. However, the user is now on the same boat with whatever he/she has invested into. This symbolizes trust. This also allows the user to lowers the actual cost of using the platform if the investment makes money.

The opportunity to deeply connect with the creator

Connecting with creators are not difficult. Users can DM creators on twitter, or just leave a comment under their tweet. Deeply connecting with them, however, can be challenging. There is not sure-fire way to make sure that when a user sends a msg to a creator, the creator can read and reply to it. Friend.tech creates this platform. It's not the first time that we have a "pay for my time" platform. Patreon & OnlyFans are both great places if a user would like to gather attention from the creator. Only that Patreon and OnlyFans are not market places. There are no easy ways for the creator to set the "correct" barrier of entry to users. It would usually be arbitrarily priced and not attracting the right kind of people. Friend.tech creates the barrier of entry by representing that with the price of a key. The user's priority is prized at the price of the keys, measuring their determination to talk to the creator. The ownership of the keys represents a exchangeable item unlocking the right to talk to a creator.

Looking at the above, we might just see the first example where we are able to create a market for a person's social connection. The keys representing this social connection is a luxury good as well as an investable vehicle.

What does it mean for social dapps?

1. It shows that something in social is investable.

Economic activities on social or content platforms has always been expenditures. Paying for YouTube Premium, paying for WhatsApp, paying for OnlyFans, and paying for SuperLikes on Tinder. None of them allows users to "invest" in or "trade" a right or item. On Friend.tech, it's possible to invest in a social connection, or trade that social connection. This brings market based pricing mechanism allowing for more efficient price discovery.

2. It shows that a social connection can be luxurious.

Friend.tech offers a product that feels socially premium, representing high status, is increasingly attractive as it gets more expensive, and users feel like they are paying more than the sheer utility. In essence, users spending money on creators is now an investment behavior. This used to be only consumption behavior on Web2 platforms such as Patreon or OnlyFans.

3. It shows that trust between creators and users can be openly displayed.

Comparing the Friend.tech experience to Twitter, the most important experience that's enabled by the financialization of this luxury experience is that the social graph can now be priced on an open market. The social graph on twitter is identical across different users. Creators have no idea which user is more enthusiastic than other users. On Friend.tech, the creator can see who are the earliest (early to buy at a cheap price), heaviest (late to buy at a high price) and most loyal supporters (diamond hands), easily. This brings a new sense of trust between the issuer and the buyers/holders. The buyer essentially deposits his/her money into a pool heavily influenced by the share issuer, therefore creates an overlap of their mutual interest. The famous navy seals trust test applies here: "I trust you with my life, but do I trust you with my money and my wife?" Trusting someone with their life means that I am confident of his/her capabilities. Trusting someone with my money and wife means that this person is worth me taking a bullet to protect, to die for on the field. The second level of trust between content creator and their audiences, perhaps exist, have never had an opportunity to be displayed. This can only happen when they have mutually bonded interests. IT's even more exciting to have that priced in an open market.

The picture might have come clear here. If you are building a social app in Web3, this is what you can learn from Friend.tech from a product point of view:

• Trust is a scarce resource that's underpriced/non-existing in Web2 social apps.
• Luxury creates status, which drives adoption in the high-value user base.
• Investment behaviors are fundamentally well-suited for Web3 environments, justifying the need to be run in a decentralized and trustless environment.

To make it easier to understand, here is a few examples:

• If you're building the web3 Spotify, it might help to have curated, exclusively acquired music as a differentiator to other services. In order to have the best curation possible — and also to make the platform more participatory & fun — you might want to incentivize members to help curate for the platform, and make it so that they have skin in the game with their curation to best align individual & group incentives. To identify the best curators, you might track and reward specific on-platform actions that show breadth & depth of knowledge.
  • Marine Snow allows members to use their monthly & annual subscriptions as skin in the game to help curate the best music and musical artists in the world for the platform, and to DCA ownership of the platform itself. Curation in Spotify used to be a consumption behavior: users spend time listening to music. Now it's an investment behavior where the user spends monthly subscription into the songs & musicians.

• If you are building the luxury version of Bumble, the $5 subscription for boost, which give users more exposure to matches, might not ideal. Instead, a better alternative would be to ask users to deposit money according to a bonding curve for lucky points, where higher points allows more and higher quality matches.
  • Mercurius Club is building a new way to socialize with strangers, where each sentence sent & received is financialized. Users receive reward on the msg received / msg sent ratio, and invest the reward earned into status items. In essence, users are not spending money on connections to other users, which is a consumption behavior. Instead, user invest their time & effort into a meaningful conversation. As the conversation goes deeper, users are in a better position to invest that reward into status items which opens them up to more "conversational investment opportunities".

• If you are building a Web3 advertisement platform, asking users to spend time watching a piece of ad and waiting for the conversion rate to kick in is not enough to out-compete twitter ads. Instead, give the user a meaningful expected return to invest their time into watching the ad might be a unique Web3 way to facilitate Web3 user acquisition.
  • Vessel is a platform that allows users to collect an NFT from any content of a brand on the platform. That includes minting an NFT out of a brand's article or campaign. Instead of just spending time reading the content, users' "time consuming behavior" is now an "investment of time" where they invest their time into "collecting" the content, which later may yield return on upgraded engagement with the brand. This makes watching ads actually meaningful.

In case you haven't noticed yet, all of these cases convert consumption behaviors into investment behaviors. This helps establishing trust via ownership and establishing social status via holding a luxury item.

Never the less, we are hugely inspired by what Friend.tech has achieved, and we wish to see more innovations for luxury online/onchain experiences. If you are building one please reach out. We would love to talk to you.