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What Happened To All The Friendtechs?
Niklas Polk
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Key Takeaways
9 min read
  • Friendtech is the undisputed market leader thanks to its $42m TVL, but also in terms of volume, revenue, and users.
  • The strongest competitors are in this order New Bitcoin City ($2.7m TVL on NOS), Tomo ($780k TVL on Linea), Stars Arena ($740k TVL on Avalanche), and Post Tech ($160k TVL Arbitrum).
  • So far they all feel very similar from a user’s perspective and have the same key, fee, and airdrop points mechanics, whereas Post Tech, and to a lesser extent New Bitcoin City, have the most unique UIs.
  • Many of the top accounts exist across multiple platforms, enabling access to their content at cheaper prices in case of cross-posting.
  • As all friendtech competitors are built on different platforms, their keys might profit from the narratives of the networks they are built on - e.g. New Bitcoin City from the Bitcoin narrative.
  • Friendtech has by far the lowest 24h-volume-to-TVL ratio at 0.03, indicating that it might have transitioned from a launch and speculation phase to a retention phase.
  • The incentive system with cubic price curves and inexistence of a secondary market seems to drive TVL up very fast within the first 2-3 weeks of launch but then fails to capture retention and activity as this is not incentivized except for “points” which do not have any value yet.
  • Generally, most metrics for these SoFi projects have been trending downward with few signs of reversal.

Introduction

Following the meteoric rise of friendtech, the social app on Base, all eyes were on Social Finance or SoFi. Their innovative share model sparked excitement in times of generally low on-chain activity and got people “gambling” again.

Given this success, the open-source nature of friendtech’s smart contracts led to a variety of forks. This is not necessarily a “bad thing”, as transparency is one of the key values of the space, competition can be healthy, and different minds can give the same idea different flavors.

But how does the SoFi landscape look now, what happened to all the friendtech-like projects, and most importantly, are there any investment opportunities within that landscape?

To answer these questions, this report first reviews the top competitors and then looks at their traction and developments. Subsequently, the report assesses the outlook for SoFi and lays down some thoughts on how (and if) any investment opportunity exists.

Current SoFi Landscape

The top 5 SoFi projects by TVL are friendtech, New Bitcoin City, Tomo, Stars Arena, and Post Tech. They all are built with strong inspiration taken from friendtech but deployed on different network.

For a deep-dive into friendtech check out this in-depth report - The present report provides a short overview of the main competitors. All the competitors share the key-to-chat and (airdrop) points core concepts.

New Bitcoin City

The social platform built on the Bitcoin L2 NOS, which is based on the OP Stack, is a friendtech fork, that after initially being very similar, has  started diverging and innovating. These innovations include:

  • Fee split is set to 8% for creators and 2% for treasury as compared to 5% for creators and 5% for the team from friendtech.
  • Easy-access desktop version with unique UX / UI and features.
  • Integration of friendtech key prices in order to compare prices between New Bitcoin City and friendtech.
  • Open API for developers to actively encourage building products on top of it.

Apart from being secured by the Bitcoin blockchain, New Bitcoin City uses BTC instead of ETH as trading currency and owes parts of its success likely to the currently strong BTC narrative.

Tomo

Tomo is built on Linea, an Ethereum zkEVM L2 backed by Consensys. The UI /UX is still very similar to friendtech’s UI, however, Tomo launched dedicated iOS and Android apps and is working on a desktop version. Tomo also initiated a Galxe campaign where one can earn more (airdrop) points. It also uses ETH as trading currency.

Stars Arena

Stars Arena is the friendtech fork built on Avalanche and uses AVAX as trading currency. The UX / UI as well as core functionality are very similar to friendtech. This competitor experienced a fast rise until it got exploited for around $3m in AVAX on 6 Oct 2023 (it could recover most of the money). Nevertheless, the incident put a dent in the initial positive momentum and the protocol has not fully recovered since. The app stopped trading for a few days and most efforts have since been focused on mitigating and dealing with the exploit as well as security measures. In the wake of the exploit, the entire initial team has been replaced, as of  04.11.2023. Since the team’s replacement, the TVL and traction of the app have been increasing again.

Post Tech

Post Tech is a friendtech fork built on Arbitrum, and although most of the core functionalities like keys and airdrop points and ETH as trading currency are the same, they are using more or less the same UX / UI as Twitter. Going forward, this indicates a very different roadmap for future features as the app seems to take a slightly different approach to how users interact with their platform. They recently announced their vision to integrate DeFi into their product at some point in the future, with things like P2P lending using social profiles.

Core metrics

The table below shows some current key metrics. Note, that for New Bitcoin City, the 24h values have been extrapolated from the latest 10’000 transactions due to limited data availability.

Source: Nansen Query (5. Nov 2023)

Friendtech is still the undisputed market leader with respect to all metrics (except the volume to TVL ratio), followed by New Bitcoin City as a strong second. Tomo and Stars Arena fighting for rank 3 and 4 respectively, and Post Tech lands on rank 5 with some distance.

Only friendtech and New Bitcoin City have above-$1m TVL, and are hence the two most suitable candidates for trading in size.

Although friendtech is the leading SoFi platform, it has the lowest volume-to-TVL ratio. This is not ideal for creators and the protocol, as revenue and fees are directly proportional to the volume. On the other hand, this could mean that people own most of the shares they want and now do not trade as much and just enjoy the content.

The following charts illustrate, how volume and trading activity on friendtech have been declining since a peak in mid-September, and how actively trading users have been not only been trending downwards, but also most active users are already existing users. This further supports the hypothesis of friendtech transitioning out of the launch and speculation phase into a retention phase, as despite this there has not been a huge decline in TVL.

If that large TVL was tapped into for revenue generation (e.g. through staking), this additional yield could be used to keep creators and users engaged.

Source: Nansen Query
Source: Nansen Query

The charts below show the TVL development since the launch of friendtech and up to 5. Nov 2023. To better compare and rescale only the competitors, the chart for friendtech can be hidden by clicking on “friendtech” in the legend.

Source: Nansen Query (5. Nov 2023)

The competitors have been in a steady decline of TVL after reaching a peak usually within one or two weeks after launch. Only friendtech has had a longer period of growth and managed to keep TVL relatively constant over the past weeks. Looking purely at the TVL trends, it seems unlikely that any of the competitors will catch up with friendtech in the foreseeable future. Furthermore, the initial peak hype around SoFi seems to have died down, as none of the projects are experiencing significant net inflows anymore.

Interestingly, all the charts look very similar, with a parabolic start lasting one or two weeks, followed by a sharp peak and a gradual decline. So far, only friendtech has managed to experience a renaissance after the initial influx in early September. This could on the one hand mean, that these other projects are not yet differentiated enough to capture significant market share from friendtech, and on the other hand that they suffer from similar problems of insufficient long-term incentives.

Strategies

Playing Underlying Narratives

Currently, the top SoFi projects are all more or less similar copies of friendtech on other chains and have therefore had a hard time differentiating themselves and claiming significant market share. Although most of them have started to diverge with their product slowly and started carving their own niches, all these applications still look and feel almost indistinguishable (with the exception of Post Tech, going down the Twitter route). Consequently, they all first and foremost profit from the SoFi narrative. If the enthusiasm for social apps rekindles, some of these projects are sure to experience at least some more traction.

The second layer of narrative for these apps is their underlying chain or base asset. If the chain or the trading currency experiences hype, the SoFi apps are likely to get a piece of the cake.

E.g. in case you are planning to get some SoFi exposure when you expect BTC to have a strong narrative, New Bitcoin City profiles might be a good bet:

  • The project itself might get more attention during a strong BTC narrative, increasing traction, and ultimately key prices.
  • Creators on NBC are generally more geared towards BTC and the ecosystem, making the content more valuable.
  • Your base asset and therefore your investment is in BTC and you also profit directly from BTC price appreciation.

Currently, there is no token available for any of the apps, so buying keys of active and popular accounts is considered a good way to get exposure. Bear in mind that due to the nature of the price curve, keys tend to get more volatile with higher prices, and key prices also have generally been trending downwards (see here for a chart of key supply vs price).

Content Arbitrage

All of the top SoFi platforms use the same Twitter (X) accounts as the base for their profiles. As this is a great profit opportunity for popular Twitter influencers, many of them signed up for multiple if not all platforms. To leverage their work most effectively, in many cases, the same creators publish the same information on multiple platforms, however, the key price to access this content usually greatly varies from platform to platform.

The two ways to play this are (not financial advice):

  1. If you are interested in content, you can get the key of the creator you want to access from the cheapest possible platform. However, creators might, but are not obliged to post the same content on all platforms. They might even stop using platforms altogether if they are “low performing” or they just do not like them. Make sure that they are actually active before buying keys!
  2. If you are more interested in trading,you may identify large price disparities across platforms and buy on the cheaper platform, in the hope of the price catching up. Bear in mind though, that prices across platforms do not necessarily converge. In fact, most key prices of top accounts are very different across platforms, but if there are strong narratives surrounding the account (e.g. the user is launching a token or has some valuable information), the general price movements might be the same. As many of the platforms are very new, there has not been a lot of precedent for this yet.

The following websites can help you compare key prices without having to access all the apps:

  • Fren.trade: Third-party website, providing price information for friendtech as well as Stars Arena.
  • New Bitcoin City: Desktop version of New Bitcoin City that offers NBC prices as well as a direct comparison to friendtech prices of the same profile.
  • Tomotrade: Third-party website, providing prices for Tomo keys.

Unfortunately, there is no such source available for Post Tech at the moment.

Conclusion

Currently, all the SoFi platforms share not only the key and revenue model from friendtech, but also its gradual activity decline after an initial 1-2 week hype (although friendtech itself managed a strong comeback a few weeks later). Most likely, as soon as an app launched, new users rushed onto the platform. The keys, all starting at very low prices, were bought up and traded until everyone who wanted access to a certain account also got it, driving volume and fees up. After that initial frenzy, this model proved to be quite unsustainable, as long-term retention of users does actually not benefit creators or the protocol. As there is no secondary market, the key prices are bound to the cubic price curve, which makes them very reflexive in case of a loss of interest. Although all the projects have a points system in place to try and keep users engaged, the hope of a future airdrop does not seem to be sufficient to sustain the momentum.

Nevertheless, friendtech has been an undisputable success, that has spurred hype around SoFi platforms and given birth to many forks across various networks. So far none of the other projects managed to even remotely catch up with friendtech in terms of TVL, volume, or users, and the general trend suggests that this won’t happen in the near future. This might change mid- to long-term, as competitors start developing their apps in different directions and might manage to occupy different niches or even unlock a great new use case. Some might even switch up their key model or find other ways to re-engage their communities or just happen to be associated with an ecosystem that experiences a lot of hype.

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Disclosure: The authors of this content and members of Nansen may be participating or invested in some of the protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Nansen does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Nansen at any time without notice. Nansen accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.