The Dilemma of Friend.Tech and the Rise of Copycats, Who Can Lead the New Wave of SocialFi?
With the popularity of Friend.tech, various copycats have emerged. The veDAO Research Institute has conducted a special review and analysis of several well-known copycats.
Friend.Tech can be said to be the hottest project in the crypto circle recently, with a trading volume of over 25,633 ETH within two weeks of its launch. It has also received seed round investment from Paradigm, and its Total Value Locked (TVL) has shown exponential growth. However, on October 4th, Friend.Tech saw a net outflow of 2,100 ETH, the largest daily withdrawal since its launch, leading to a 7.8% drop in daily TVL.
Analyst Tom Wan stated that the reason for the decrease in TVL mainly came from a large holder, Hanwei Chang, selling 43 of his own Keys, making a total profit of 140 ETH. This also caused the price of his own Keys to plummet, from 3.89 ETH per Key to 2.64 ETH. This selling pressure led to a price drop, allowing Chang to repurchase 15 of his own Keys at a lower price. However, Friend.Tech's reserve still stands at around 10,510 ETH (approximately $17 million), indicating that the large holder has only taken profits but has not withdrawn funds, and could re-enter the market at any time. As of the 11th, TVL has not yet returned to the level of the 4th.
On the other hand, the popularity of Friend.Tech has also led to the emergence of many similar copycats on various chains, including the social platform Stars Arena launched by Avalanche, as well as HUB3 and Friendzy on the Solana chain. In this article, the veDAO Research Institute will review the current situation and development trajectory of Friend.Tech, and provide an introduction and analysis of related copycats.
Friend.Tech
For an introduction and background of Friend.Tech, please refer to the previous article by the veDAO Research Institute.
Recent Situation of Friend.Tech
Recently, Friend.Tech has been involved in a series of SIM card swap attacks. This has not only shaken the trust of its user base but also attracted attention from the cryptocurrency community. On September 30th, a user named "froggie.eth" reported a SIM card swap incident affecting their Friend.Tech account, resulting in a loss of over 20 ETH. Subsequently, user Daren Broxmeyer revealed on October 3rd that they had suffered a SIM card swap attack, resulting in a loss of 22 ETH. As of October 5th, a total of 234 ETH had been stolen from just 4 different Friend.Tech users.
Cryptocurrency investment firm Manifold stated that Friend.Tech has potential risks, as about a third of Friend.Tech accounts may be associated with phone numbers, potentially threatening around $20 million due to targeted attacks on Friend.Tech users. In addition, Manifold also emphasized that theoretically, the entire Friend.Tech platform is at risk due to its security configuration, making it crucial to address these issues.
In response to these attacks, Friend.Tech added a new feature on October 5th, allowing users to change their login method. Additionally, Friend.Tech clarified the issue of inactive 2FA passwords for Privy.
Future of Friend.Tech
Due to a series of SIM card swap attacks and the large holder sell-off mentioned at the beginning, the popularity of Friend.Tech has plummeted, leading many to question whether it is a "pump and dump" scam. Some users pointed out that the project's developers had previously been involved in controversial projects such as Tweet DAO and Kosetto. In both cases, the project team initially flooded social media, promising more exciting news, and then suddenly disappeared.
Another major concern of investors is that Friend.Tech does not have an official roadmap or whitepaper. To date, there is no documentation about the project's progress or goals. The only thing users know is that the project is currently in the beta release stage, and the developers hope to enter the extensive release stage six months later. The Friend.Tech team has not mentioned whether any new features are in development.
However, overall, Friend.Tech is still considered an excellent SocialFi project. Its innovative approach to combining social and crypto has generated significant attention and discussion, with extremely high TVL and profitability. There is no doubt that Friend.Tech has significant significance for the SocialFi track. It can be said that Friend.Tech can effectively monetize existing social media brands, filling the gap in the current DeFi world.
At the same time, Friend.Tech still has a lot of room for improvement. Firstly, many people complain about the high transaction taxes and bots, which have led to the majority of profits being taken by top KOLs, project teams, and scientists, and is also the reason why most retail investors are unwilling to participate deeply. Secondly, there is a lack of functionality, with continuous user complaints about the UI since its launch. Additionally, its current social activities are limited to text and image exchanges in Rooms; various innovations by room owners require the use of other platforms or tools, and even basic functions such as raffles and voting are not available in Rooms. If SocialFi only focuses on finance and cannot retain users, the economic model will collapse, and it will eventually face the risk of failure.
Copycats
On August 29th, Friend.Tech posted a tweet stating, "To ensure that loyal users receive fair rewards during our testing period, users who turn to forks and copycats will automatically choose not to earn points and give up existing points. They will be able to use the application normally." This statement clearly means that users can use various copycats, but after using them, they will not be able to earn rewards in Friend.Tech. Finally, 5 hours after Friend.Tech released this statement, its founder Racer issued an apology letter, admitting that the previous remarks restricting users from using clones and knockoff versions of the application were made out of fear and zero-sum thinking.
Through this wave of operations by Friend.Tech, it can be seen that in the social track, the value of copycats is still high, even the leaders in this field feel fearful of emerging copycats. Those who have experienced the prosperity of the early Web2 period will have a deeper understanding of this, as they have seen how social platforms such as Facebook and Twitter eventually emerged victorious in the social track. Now, let's take a look at some good Friend.Tech copycats:
Stars Arena
Stars Arena is a copycat of Friend.Tech on the Avalanche chain. Stars Arena changes the term "Keys" to "Tickets." Unlike Friend.Tech, which requires an invitation code, Stars Arena only requires users to link their Twitter account with Stars Arena to trade Tickets on the platform. Once a user purchases the other party's Ticket, they can enter the other party's private chat room. This private chat room is slightly different from Friend.Tech's; in Friend.Tech, if the host does not choose to reply to a member, other members cannot see the other party's messages, while in Stars Arena, both the host's and members' messages can be seen.
In addition, a major change from Friend.Tech is that Stars Arena has added a public information stream feature, allowing users to post Twitter-style posts and receive retweets, likes, and tips. Additionally, it has adjusted the profit-sharing mechanism, with 7% of the transaction fee going to creators, 2% to the platform, and 1% to the referrer.
Data from Dune shows that since October 2nd, Stars Arena's daily TVL has shown a significant increase, reaching around $1.45 million on the 6th. Currently, it includes participation from Avalanche officials, founder Emin Gün Sirer, and other large holders of Friend.tech.
However, Stars Arena experienced a major security vulnerability on October 6th, with this hack causing nearly $3 million in losses for Avalanche. On the 9th, Stars Arena announced that it had successfully obtained the necessary funds to compensate for the $3 million loss. The Stars Arena team also stated that they would only reactivate the smart contract after a comprehensive security audit. As of the deadline, Stars Arena is still in maintenance mode.
Fan.Tech
Fan.Tech is also a SocialFi project with the core of tokenizing social value, where "Keys" are referred to as "Shares." However, unlike Friend.Tech, Fan.Tech has a more fluid UI/UX, allowing for public/private posts, viewing accounts followed on X, statistical pages, and the ability to switch to dark mode. In terms of the program itself, it is much more mature than Friend.Tech. Additionally, Fan.Tech has a roadmap and whitepaper.
Its features also include Share Generation Events (SGE), which can introduce bidding activities for new accounts to prevent bots, as well as a referral system that allows users to earn 1% of income from Shares transactions made by invitees and their own Shares.
CipherRIP
CipherRIP, formerly known as cipher.fan, launched on Arbitrum. Users can buy and sell Cores, equivalent to Friend.Tech's Keys. By using CipherRIP, users can earn points and receive a CIPHER airdrop scheduled for October 15th; the airdrop total is 100 million CIPHER, accounting for 10% of the total token supply. To post content on the platform, users need to hold 5 Cores or their Core value needs to exceed 0.01 $ETH. It is worth mentioning that the project's launch announcement was retweeted by the official Arbitrum account.
After being retweeted by the official Arbitrum account, CipherRIP saw an influx of 14,468 new users on October 10th, accounting for approximately 75.6% of the current user base. DeFiLlama data shows that on the same day, CipherRIP captured about $215,000 in fees; the current TVL of CipherRIP exceeds 320 ETH, setting a new record.
HUB3
HUB3 is a social project built on the Solana chain, with rules similar to Friend.Tech. The difference is that HUB3 displays a world map in its interface. Users register in a specific location, and the corresponding location is displayed on the map, allowing for interaction by clicking on the map.
Conclusion
Based on the above, it is clear that Friend.Tech still holds the leading position in the SocialFi track, but other high-quality copycats have emerged, optimizing and innovating in terms of chain selection, economic models, and feature design. All participants may jointly promote the maturity and prosperity of this track, with continuous improvement in product quality and enhanced user experience.
The essence of SocialFi is still P2E. Compared to other P2E models, users not only receive token rewards but also gain traffic and influence. More fundamentally, the platform's use of the value of KOL influence will be improved, allowing creators to reclaim the value of their influence.
We have reason to believe that the ongoing popularity will propel the SocialFi track into a new stage of rapid development, fundamentally changing our social interactions, reshaping relationships, and becoming a new growth point in the crypto world.
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