Friend.Tech makes waves again Data reveals trading conditions and profit-making strategies

Written by: Bitcoin Sage Compiled by: Deep Wave TechFlow

The FT core community is generally excited about the potential of the platform and enjoys using it and/or leveraging it to maximize profits.

Friend.Tech (FT) has given a boost to SocialFi over the past few weeks. Many well-known crypto Twitter personalities are currently actively involved there, leading to significant hype. The keys of Hsaka and CL are 5 and 4 ETH respectively. Currently, buying your own Vombatus leads the way with a Key price of just over 7 ETH.

At the beginning of September, the total value locked (TVL) was $5.3 million. Currently, it stands at $39 million, an increase of nearly 700%. TVL parabolic growth has slowed recently but is still increasing steadily.

Looking at daily dollar inflows, it is clear that inflows have generally remained healthy. Reaching its peak on the weekend of September 10, 2022, TVL increased by 50% in one day.

Trading volumes on FT have grown significantly since early September. Over the past week, they have held steady in the range of about $10 million per day. Of note is the change in sell vs. buy volume, last week we saw a significant increase in selling pressure, which signaled profit-taking and the potential for users to exit the platform. However, since the implementation of points that weakened self-buying last Friday, buyers have regained confidence, as evidenced by increased buying volume versus selling volume.

Consistent with TVL and transaction volume, user activity has also grown significantly since early September, which is a healthy sign for having product market fit. FT currently has about 10,000 returning users every day, with an average of 90,000 new users every day last week.

When looking at these numbers, it is important to realize that there are many (trading) bots active on FT and it is unknown how many of the users are bots.

Strategy

FT has built a very active core community. This core community is generally excited about the potential of the platform and enjoys using it and/or leveraging it to maximize profits. The main goals of maximizing profits for core community members are as follows:

  • Accumulate airdrop points;
  • Trade Key to increase portfolio value;
  • Increase your own Key price.

To achieve the above goals, several main strategies are employed.

(3,3)

This is a common law known from the beginning of OHM, each other buys each other's Key and holds it. This increases each other's Key price, portfolio value, and airdrop points allocated every Friday. The criteria for assigning scores vary from week to week, but are generally very dependent on the user's portfolio size. This strategy is ideal for users who do not have existing followers on other social platforms, as (3,3) will look at on-chain data to find suitable (3,3) friends and tend to follow up with each other to make purchases. So it's also a great way to channel activity in a room.

Over the past few weeks, (3,3) has performed much stronger than the rest, making it one of the most profitable general strategies out there (if not the most profitable).

Like OHM, this strategy is highly reflexive, with potentially disastrous consequences for its users. But due to the social component of FT and the potential to increase the value of Key holders in other ways, such as article writing, closed tool access, and network access, it won't necessarily end up the same way.

The (3,3) community is arguably the most engaged, having built many dashboards and tools to not only track, but incentivize desired long-term behaviors. This means that the (3,3) room is usually very active and focused on all things FT. It's interesting to see this behavior play out, with users actively addressing (potentially) negative issues to ensure the prosperity of their communities and FT.

Self Purchase

Over the past few weeks, the most effective way to accumulate points has been to purchase your own Keys. Either through the main account or through the secondary account.

With this strategy, users purchase their own Key from the beginning. This results in him initially owning all the Keys, with no risk of price decline, and a portfolio value multiplier of approximately 2.5x compared to if the user purchased the Keys from others. This is because self-purchase increases the Key price with each subsequent purchase, thereby also increasing the portfolio value. The only cost incurred by the user is the 5% tax paid to the protocol when purchasing and ultimately selling Keys.

There are currently 15 self-buyers among the top 50 Keys. Additionally, there may be secondary buyers, which are harder to identify. Therefore, a significant proportion of points are earned through self-buyers.

However, over the past few weeks, many have argued that this needs to be weakened as self-buying adds no value to the platform. Additionally, it dilutes the incentives for organic users. But perhaps more importantly, more and more new liquidity is flowing to self-buyers compared to existing Keys.

Last Friday, the FT made drastic changes to its points allocation algorithm, with self-buying being significantly nerfed. For example, the top-ranked user "Vombatus" received 3.33 points per ETH, while (3,3) received an average of about 90 points per ETH. Over the weekend, this resulted in several self-buyers selling their own keys and switching to a (3, 3) strategy, where they purchased (3, 3) keys in hopes of getting a return on their purchases.

As you can see from the chart below, as more of the same Key is purchased, the price of the Key will rise rapidly.

Sniper

Sniper uses Bot to purchase the first batch of Keys from new users joining the platform. Initial keys cost as little as a few cents. Subsequent purchases will quickly increase the price, allowing the sniper to make a profit, often within hours of sniping the Key.

This may have been, and may still be, the most profitable strategy for those skilled enough to compete effectively.

Purchase KOL

A simpler strategy is to buy professionals, KOLs, who are likely to stay near the top of the leaderboard. The main reason for doing this is to give FT's upside risks general exposure, while keeping things relatively manageable and limiting downside risks.

This strategy has been very profitable over the past few weeks as the top keys have increased from 1-2 ETH to peaking around 4-8 ETH. However, as can be seen from the table above, it is not competitive compared to the (3,3) strategy.

other

There are many other strategies in use, but these are beyond the scope of this article. Several other strategies worth noting include:

  • Purchase an inactive account with a large number of followers on X;
  • NFT community members buy each other's accounts, such as Punk buying Punk. This is very similar to the (3,3) strategy, but so far less extreme.
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