Analysis of the Continued Popularity and Potential Risks of Friend Tech

Since its inception, Friend Tech has gone through three phases of development. After launching on August 10, 2023, the Chinese community spread rapidly, but the hype quickly faded. Following seed round investment on August 19, interest surged again, but for a short duration. After half a month of low-key development, trading volume suddenly increased recently, with the total locked value (TVL) reaching 31 million USD, and independent accounts reaching 140,000.

Why does Friend Tech continue to attract users?

1. The quality of the user base is high

Recently, the outbreak is attributed to the arrival of major institutions, project founders, and high-traffic influencers. At the same time, its incentive mechanism effectively screens deep participants, avoiding the proliferation of low-quality accounts. In addition, the strong binding with Twitter and the high incentives for homeowners perfectly leveraged this to complete a cold start and attract high-quality users.

2. Airdrop expectations are strong

In addition to transaction incentives for homeowners, the platform will also distribute 100 million points within 6 months. The community generally expects this to be closely related to future token airdrops, with each point estimated to be worth up to $2. The point distribution rules incentivize long-term holding, further driving up the price of KEY.

3. Strong background resources

The only investor, Paradigm, has gained market recognition for its investment capabilities. In addition, Friend Tech is built on the Base chain and has the support of Coinbase, enjoying strong ecological resources.

4. Meet upward social needs

Friend Tech provides users with the opportunity to connect with high-level individuals and obtain one-on-one consulting services at a relatively low price, filling a gap in the market.

Potential Risks of Participating in Friend Tech

1. The robot's profits are too high

Currently, more than 140 robots have generated a profit of 2.2 million USD through Friend Tech, accounting for a quarter of the total profit, which raises the entry barrier for ordinary users and may exacerbate the risk of future declines.

2. The price curve is steep

The price of KEY is based on a quadratic equation model, resulting in a huge price gap between early users and later users. This may trigger vicious competition within the group and lead to panic selling when the market cools down.

3. Contradiction between product logic and profit model

Point incentives encourage long-term holding, but the earnings of the platform and homeowners depend on frequent trading. This may result in lower earnings for homeowners providing long-term services, affecting the healthy development of the ecosystem.

Conclusion

Friend Tech has seized a market gap and attracted a high-quality user base, but its product logic still has room for improvement. Currently, the hype value seems to be higher than the actual service value, which may be detrimental to the platform's long-term development. Investors should carefully consider these potential risks and manage their positions wisely when participating.