Original Title: "From Product Evolution to Business Model, Various FT Imitation Plates Emerge in Endless Stream, Is It Better to Do Ponzi Than Social?"

Original Source: Debox

Currently, Friend Tech (referred to as FT below) is definitely the hotspot of the entire cryptocurrency industry. From the product launch in early August to mid-October, FT protocol has accumulated $21 million in revenue, with a daily maximum cumulative income of about $1 million, far exceeding the current mainstream Defi protocols or NFT markets. However, the recent high user activity of FT has dropped by about half, and TVL growth has slowed down and stabilized. On the one hand, after two rounds of high-frequency dissemination by Twitter KOLs, most of the KOLs who are still active in the cryptocurrency circle have entered the market, and FT still does not meet the conditions for other KOLs to enter (including radiation range, social scene, wealth effect, etc.). On the other hand, the lucrative FT protocol has attracted many VCs and project parties, and a series of FT competitors (imitation products) have further differentiated some FT users and protocol TVL.

FT Protocol Activity (as of October 17th)

All kinds of FT imitations have attracted many KOLs and users by integrating and optimizing FT with other popular product models. The entire crypto community is paying attention to and trying out FT's SocialFi model, and FT seems to have become the spokesperson for SocialFi in the current stage, with a strong momentum.

FT is a new business model or a Ponzi economy?

The way FT issues keys is considered to be a copycat of BitClout in 21 years, but times have changed. At present, the number of coin circle audiences who have experienced Defi and NFT summer is far ahead of 21 years, and these massive user bases are the basis for FT's current popularity.

FT's micro Ponzi scheme is one of the key factors for success

The lucrative protocol revenue of FT seems to have transformed it from a product to a business model. FT has attracted a large number of KOLs and users through VC endorsement and the explosive wealth effect generated by micro Ponzi, successfully capturing two of the most active user groups in Web3, including users who were attracted by top VC Paradigm's financing and speculators who like to explore and disseminate Alpha information for profit (after all, most users come to blockchain to make money), completing the project launch and value capture. The concept of micro Ponzi is mentioned here, which is also the key factor for FT's success. Blockchain is not lacking in Ponzi designs, and many high TVL Ponzi schemes quickly decline after a short Fomo sentiment due to the increasing number of participants and the huge early profit-taking. However, FT distributes Ponzi to each KOL, while also limiting the number of people by setting a high buy-in price for the Key belonging to the KOL through the model. Compared to Ponzi projects with thousands or tens of thousands of people, small-scale Ponzi centered around a KOL is obviously more operational and controllable, and in the words of the industry, small circles are easier to shape "consensus".

FT's "Fi" attribute is much stronger than "Social"

FT is essentially a Ponzi scheme derived from fan economy, and it is actually a traffic (influence) monetization tool for KOL. Unlike mature knowledge payment relationship binding models such as Web2 and Only Fans, paying for FT creates a "producer-consumer" relationship between you and the corresponding KOL, and the KOL is responsible for the content produced. The core of this relationship is that users pay for content quality, and KOL profits from selling their own content output. The advantage lies in the fact that the value is determined by the content, and one reaps what they sow.

However, FT itself is not a platform that is strongly tied to content production and social relationships. It is simply a financial product derived from Twitter, not a social product, which is also the key to FT's huge profits. The FT protocol does not require KOLs to produce content, and users who purchase keys are not here to consume content. KOLs themselves do not seem to be responsible for users' keys, and the seemingly weak social relationships are completely overshadowed by FT's financial attributes.

As a financial product, FT turns the influence of KOLs (or personal IPs) into tradable assets, with the Key of KOLs being traded as "Chongtudog". However, the biggest advantage of FT is that neither KOLs nor FT project parties seem to be responsible for users who purchase keys, without fear of FUD (unknown legal risks). Because only 20% of the accumulated amount of buying and selling keys flows into KOLs and FT project parties respectively, and the remaining part flows into the liquidity pool of the FT protocol. Any user who holds keys in the early stage can take away liquidity by selling keys at a high price. Throughout the entire transaction process, for retail investors, KOLs do not make the most profit, and those who buy keys early are the ones who make the most profit. Therefore, even if the later buyers who hold keys are trapped, they will not be too entangled in the issue of KOL operation, but will only think that they bought it too late. Conversely, for KOLs, there is no need to promise content production quality to Key holders, and there is no "content-consumption" relationship formed, so they do not need to be responsible for users.

KOL's sustainable operation in FT is not strong

Short-term skyrocketing does not mean long-term viability. For KOLs, the FT model lacks sustainable revenue (the knowledge payment model is more sustainable). Many people think that buying a KOL's key establishes a strong association or "network" with the KOL, allowing them to obtain firsthand information generated by the KOL. However, the fact is that the vast majority of KOLs do not bring their Web3 influence and cognitive information to FT and its imitations in a timely manner. Simply put, if they do not engage in insider trading, only half of the 20% commission generated by buying and selling keys will go to the KOL's wallet, while the other 10% commission and additional gains will be taken by the project party and early key buyers. If KOLs work hard, they seem to become "workers". Imagine if your company, which was just established less than a month ago, went public with a valuation of 2 billion and an annual profit of 50 million. Institutions and retail investors hold 99% of the chips, and you only have 1% of the chips, and you can only receive 10% of the annual profit as dividends. But you are required to bear all the daily operations of the company. If it were you, would you continue to operate this company or leave and start another one? The answer is obvious! This weak social relationship derived from keys seems to be only one-sided recognition. Playing a game, no one is responsible for anyone, and relationships that have not been precipitated will eventually be sold off.

Here, the editor personally feels that FT is more like a "gambling platform", and the KOLs who have settled in are similar to the roles of the banker and promotion commissioner at each gambling table. The fans of KOLs are the gambling group. The early entry group of FT is not much different from the gamblers who get rich quick in the casino. However, it is relatively rare for a gambling platform to charge a 20% commission on transaction volume. For users who engage in long-term transactions, this is not a zero-sum game, but a negative-sum game.

FT仿盘是选择「Ponzi到底」还是选择「深耕社交」？

(Translation: "FT simulation trading platform: Choose 'Ponzi to the end' or 'Deeply cultivate social networking'?")

FT's moat lies in its first-mover advantage and Fi's innovation, but its own shortcomings in social networking and Fi's simplicity and replicability can also lead to the collapse of the moat. The copycats of FT have seized this opportunity and put it into practice and promotion. Many KOLs have a more realistic attitude towards copycats and have opened multiple FT copycat accounts of their own. After all, everyone is here to have fun, and where else can you have fun?

FT Latest Simulated Trading List (as of October 17th)

There are no less than 10 FT simulation modes currently in operation, with various approaches. Some integrate FT and tweet tags to attract traffic and exposure, such as posttech and Friend3. Other projects rely on institutional or public chain endorsements to attract users for airdrops and rewards, such as T2T2 and Stars Arena.

There are also projects that combine FT mode with social creative content, such as Crossspace. Crossspace's key content is a very good attempt to combine FT and Social, but because the created content is highly replicable and lacks scarcity, its value is difficult to unify and does not trigger users' fomo emotions.

On top of the micro Ponzi scheme in FT, there are even more projects that continue to stack Ponzi, such as Tomo. Before KOL enters Tomo, users can trade their votes, but after entering, they can only trade their keys. Tomo's vote function provides a reason for KOL to enter, as there is nothing wrong with free-riding on the bottom pool's profits. However, if they do not enter for more than three months, this part of the bottom pool will be returned to the vote holders. KOL will have a "Fear of Missing" feeling, and this bottom pool betting model is similar to the early Fomo3d (a pure Ponzi project) gameplay. From the current TVL of various projects, it seems that Tomo's model is more popular among users, and everyone seems to realize that the essence of blockchain is "Ponzi"?

However, no matter what new gameplay the project party proposes, for KOLs, these gameplay are tools for them to monetize their influence, and each FT simulation account can be registered, harvesting unlimitedly. Some top NFT players are lamenting that there are too many FT-like SocialFi APPs currently, and he can't make enough money by joining them!

NFT expert dingaling expressed his frustration on Twitter that there are too many imitations of socialfi.

So everyone can see that once a new FT imitation plate comes out, there are always a bunch of KOLs and early entrants shouting to enter the market. (Thinking that buying a key is just to make a friend, but in reality it is a Brother who takes over. Is it so difficult to make a friend?)

They choose to continue building Web3 Social

Starting from 2021, whether it's VC or various project parties, it seems that everyone believes that Web3 Social is one of the next market breakthrough points, because it is widely believed that Social will bring more new traffic and incremental funds to Web3, stimulate market vitality, and everyone is exploring Web3 Social. **There were early Social products such as Deso, and now there are social ecosystems such as Lens Protocol, Farcaster, DeBox, etc. trying to build the infrastructure of Web3 Social.** However, in the past two months, with the skyrocketing profits and user base of FT, it seems that everyone has returned to the definition of "SocialFi" for Web3 Social, and speculation and gambling are rampant in the entire Social circle.

First of all, FT is indeed the key to the short-term SocialFi craze. FT itself is a short-term financial product with some reference value, but if FT is taken as the mainstream model of Web3 Social, there may be some problems (at least for now, the FT project party may also iterate the product in the future). Because no matter what type of Ponzi scheme, there will always be a day of collapse, it's just a matter of time (unless blockchain is essentially a game, which is worth thinking about).

Web3 Social is not just one SocialFi model like FT. Social protocols such as Lens Protocol, Farcaster, DeBox, etc. are also trying to build their own social moats. Due to the high plasticity and openness of these social platforms, Lens Protocol and Farcaster have their own open protocol ecosystems. DeBox also recently built the "DeBox Open Platform" to invite developers to settle in. It is estimated that we will soon see FT imitation products based on their own product characteristics.

Finally, as a practitioner in the social industry, the editor also hopes that there will be more innovative and sustainable Web3 social products and models to continue leading the development of the cryptocurrency industry. The good news is that, in addition to the FT model, social products such as Lens Protocol, Farcaster, and DeBox are still developing at their own pace, and they choose to continue building Web3 Social despite the bear market.

Original Link

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia