Friend Tech (II): How it's going

Welcome to The Metadata, the only NFT newsletter that you’ll need.

Today we cover:

• Tuesday Data Dive: We take a look at what’s going on Friend Tech since our last data dive

• One big reason why NFTs aren’t going up…

• Taking a look into the crystal ball: What does the future hold for NFTs?

Market Update

Even as trading volumes hit their lowest point, there was a decent 10 - 30% bounce in the major NFT collections over weekend. There doesn’t seem to be any particular reason for this. Most likely_, they were just oversold. Dead cat bounce?

Notable Collections:

• Bored Ape Yacht Club (26.5 ETH, +10% from last week)

• DeGods (4.3 ETH, +16%)

• Mutant Ape Yacht Club (5.1 ETH, +11%)

• Milady (3.9 ETH, -12%)

• Azuki (4.4 ETH, +29%)

Tuesday Data Dive: Friend Tech (II)

Two weeks have passed since we last dissected Friend Tech, and oh boy, has it been a whirlwind. Earlier today, the platform dropped a tweet that sent Crypto Twitter into a frenzy—only to delete it hours later:

Let’s see what’s going on with the platform since we last covered it:

The number of transactions peaked on 21 August, and has been on a downtrend since. The good news? It seems to have stabilized at 1,000 - 2,000 transactions/hour now. That’s pretty impressive and suggesting a reasonable level of user retention.

Racer, the founder, must be grinning ear to ear. Friend Tech takes a 5% cut in protocol fees for every buy/sell transaction. Quick math: that's a whopping $4.16 million in fees over just 20 days. Annualize that, and you're looking at $75 million in revenue!

The big question is: where are these protocol fees going? Presumably, they're funding team expenses, but the lack of transparency is raising eyebrows.

The number of active buyers and sellers has been dwindling, which isn't surprising given the falling transaction numbers. What's alarming is that the number of active buyers has now dipped below the number of active sellers—a reversal from the previous trend.

This week marked a shift from ETH inflows to outflows for Friend Tech (red bars). While the outflow is still modest (~250 ETH/$400K), it's a trend worth watching. Could this be the start of a more significant outflow? This could be a bellwether for the platform's future.

🤑 Why it matters: 

Friend Tech is navigating choppy waters, facing public backlash and competition while trying to find its footing in the noisy crypto Twitter space.

Friend Tech's Achilles' heel appears to be its steep bonding curve, which limits the number of people in each private chat and caps its network effects.

We foresee that Friend Tech could eventually migrate to a v2 with more customisable features for each creator and a redesigned bonding curve. If this happens, some people will get rekt (those who bought keys at a high) but the blow could be softened with more tokens/points.

Our Favourite Tweets

🐥 One reason why our NFTs aren’t going up: no new inflows

🐥 SEC starts to go after NFTs 🤔

🐥 Animoca Brand’s CEO Yat Siu gives his TED talk on the metaverse

🐥 Xai is a gaming network on Arbitrum. It just launched its odyssey/quests today.

🐥 Looking into the crystal ball on the NFT markets

🐥 Wreck League stats: pretty sobering

🐥 How 2 devs can take on a huge behemoth

🐥 Creep Crew, a mysterious new project: “An Interdimensional Nightmare of Primordial Origins. Art, Culture, Exploration.”

🐥 Wanderers, an Animoca-backed project, opens sign ups for early access

🐥 A list of projects to watch for. Keep an eye on Fableborne especially.

New Projects & Upcoming Mints

🍿 Braindrop’s next AI art collection: “Mappings” by ira greenberg is minting on 30 August. 500 supply at 0.1 ETH each

That's it for today folks. If you want more, follow us on Twitter (@the_metadata). If you were forwarded this newsletter, you can subscribe with just one-click:

Disclaimer: This newsletter is for educational purposes only. None of this is financial or investment advice. It is not a solicitation to buy or sell any assets. Minting and buying NFTs is risky. Please do your own research.