MT Capital Research Report丨In-depth analysis of Fren Pet: FOMO is designed as the core, a mining machine game dressed as a pet

By Severin, MT Capital

TL; DR

Fren Pet’s pet is essentially a mining rig that continuously mines a portion of the payouts of all players in the arena as revenue.

Compared with friedn.tech, Fren Pet has made more designs in terms of product vitality and user retention, but the wealth creation effect of Fren Pet is significantly weaker than that of friedn.tech, which may become a hidden danger for user growth.

Base and Fren Pet have achieved each other, and it is expected that more FrenX will explode on Base in the future.

On November 17th, Base’s official tweet about Fren Pet quickly detonated the community, and people flocked to the on-chain electronic pet game. A myth of the wealth effect surrounding the video pet game has also quietly kicked off.

Introduction to the core gameplay

In Fren Pet, players first need to spend 100 $FP to Mint the electronic pet. Subsequently, players need to spend $FP in the store to buy various food items to reset the pet’s death time, avoid pet death, and increase pet points. Each pet can get one chance to spin the roulette wheel for free once a day, with a chance to get points, shields, insurance, and more. Each pet can also harass other pets every 15 minutes, with a 40% chance of being able to beat other pets and receive their 0.5% point reward. In addition, players can also join a game of dice between players to earn higher points with greater risk. Finally, the pet’s points will determine the distribution of the ETH reward pool, and if the player chooses to claim the reward, the pet’s points will be reset to zero and the game will end.

Fomo design by Fren Pet

In terms of gameplay, UI design, player interaction, and server quality, Fren Pet isn’t a high-quality game, and even a shoddy game. After the official tweet of Base, Fren Pet even overloaded the server due to excessive traffic, causing the game to be interrupted. At this stage, Fren Pet relies more on its Fomo gameplay design to attract new players.

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Gameplay

Not Free to Play but better than Free to Play: Fren Pet requires the player to spend 100 $FP to Mint an animatronic pet. However, every time a new player enters and mint a pet, Fren Pet will refund the previous player’s cost of 100 $FP mint. In terms of the currency standard, this is the equivalent of Free to Play. However, from the perspective of the U-basic, as long as there is a continuous flow of players entering and in-game spending, the price of $FP is expected to rise, and players will instead benefit from the Mint behavior, which is equivalent to Give to Play. This will increase players’ willingness to participate, stimulate veteran Mint to have more pets, and encourage new players to actively enter. (Now changed to Mint a pet only costs 10 $FP, and the $FP spent will go into the multi-money contract, distributed to long-term active players, encouraging users to retain)

source：DEXTools

Guide players to multi-frequency and high-consumption to expand economic benefits: Food has two attributes: survival time and point income. Generally speaking, the more expensive the food, the higher the points earnings, but the shorter the survival time. This requires players to make a trade-off between survival time and point gain. Moreover, the points will be linked to the player’s earnings. Therefore, Fren Pet players who want to get as much ETH rewards as possible need to buy relatively expensive food with higher points gains. But at the same time, this type of food will survive for a shorter time. This makes players who want to get high returns frequently buy relatively expensive food, contributing a lot of turnover to the game. In the process, the player’s input cost will also be stacked higher, forcing the player to continue to buy food to avoid the cost loss caused by the death of the pet. The design of the food survival time of up to 2-3 days will also improve the user’s interaction with the game and improve user stickiness.

Give users low-cost expectations of future earnings and encourage positive social diffusion: each pet has one chance to spin the roulette wheel once a day, with rewards ranging from 1 point to 2000 points, and may also receive special rewards such as shields, or nothing at all. The free spin gives users a low-cost expectation of future revenue, and takes advantage of the psychology of players who like lottery, motivates players to continue to participate in the game, and increases the frequency of interaction between users and the game. Moreover, the free spins will also incentivize users to spread positively on social media. When users draw a high reward, they tend to post and share it on social media, which also brings more new traffic to Fren Pet.

source：Fren Pet

Use user gambling to enrich the gameplay and improve user stickiness: each pet can also harass other pets every 15 minutes, there is a 40% chance that they can steal home to get rewards, and the winner will get 0.5% points for the loser. This mechanic encourages gamblers to constantly attack and earn points from other players. At the same time, more sensible players will also choose to increase their pet points, and passively obtain the points of challenger defeat with a higher win rate through a passive defensive posture. In addition, Fren Pet has introduced a more gamifying dice game, where players can win up to 500 $FP with 100 $FP paid tickets.

source：Fren Pet

If you receive the reward, the points will be cleared, and the mining and selling will be blocked: the most feared thing for the Ponzi model is that the first entrant will quit the game too quickly. Once a Fren Pet player chooses to claim a reward, the pet’s points will be reset to zero. This mechanic allows players who want to earn lasting benefits to claim their rewards as late as possible, so that players can stay in the game, and to a certain extent, it also blocks the damage caused by players to the game economy.

Token Economy

Invite rebates to encourage players to promote themselves: Similar to exchange rebates, 10% of the $FP used by players in the game will be automatically sent to referrers, which will motivate players to actively promote and share their Fren Pet invitation codes to obtain a continuous source of income from new players’ spending.

Token Burn Creates Future Deflationary Expectations: $FP The total supply is fixed and 90% of the tokens used by players in the game will be directly burned, which will create the expectation of token deflation and encourage players to hold and buy $FP tokens earlier.

Token rewards for returning players to create future revenue expectations: every time a user buys or sells $FP tokens on BaseSwap, they are subject to a 5% tax. When a smart contract accumulates 1,000 $FP tokens from the tax, they are automatically exchanged for ETH and 2% of them are distributed proportionally to the leaderboard players, 2% to the developers, and the other 1% to supplement the $FP liquidity pool. The 2% reward repatriation will be used as a player’s future revenue expectation, incentivizing players to continue to participate in the game.

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Fomo’s game mechanics and token economy design have led to more and more players flocking to Fren Pet. However, the game is not expected to last, because the motivation to keep players paying to play does not come from the playability of the game, but from the player’s expectation of future revenue. Fren Pet’s pet can essentially be understood as a mining rig that continuously digs a portion of the payouts of all players in the arena as income. When a player’s expected return drops, rational players start to flee from Fren Pet, causing the game to enter a vicious cycle of player churn, $FP reduced buying and selling activity, reduced return rewards, lower expected returns, and further player churn. If you can’t use the playability of the game to entice players to keep paying, or introduce positive external economic benefits, then Fren Pet can’t escape a sloppy ending.

vs. Friend.tech

Fren Pet and friend.tech have a lot of similarities, even the names are the same. Fren Pet and friend.tech essentially rely on users’ expectations of future revenue, and guide players to self-promote themselves through social fission, causing community fomo and driving a large number of new players to enter. Players who enter the market early can attract users to retain users by winning the higher and higher future revenue of new players after entering the market at a relatively lower cost in the early stage.

The difference is that Fren Pet’s game-based scenarios have more unique little designs to improve the vitality of the product and the retention of users. For example, a pet feeding mechanism will guide users to continue to consume, resulting in long-lasting turnover for the app. Roulette draws and pet attacks that can be launched every 15 minutes lead users to engage more frequently and increase their retention intentions. The design of the reward claim that will cause the points to be reset to zero can also delay the early players from quitting prematurely.

However, Fren Pet’s pet development model also restricts the wealth creation effect of Fren Pet to a certain extent. Unlike friend.tech’s Bonding Curve, which can reflect the huge rise and fall of prices through simple key trading, Fren Pet’s points grow and rewards stack over time. Therefore, it is difficult for users to accumulate a large amount of wealth gains in a short period of time. This can also lead to Fren Pet’s narrative not being sexy enough to appeal to users and becoming a growth hazard for Fren Pet. Therefore, we do not expect that Fren Pet will not attract a large number of users as quickly as friend.tech through the exaggerated wealth effect in the early days, nor will it cause users to churn prematurely and collapse due to a design similar to Bonding Curve. Fren Pet is more likely to be tepid for a long time.

Base needs more Fren Pets

Of course, the explosion of Fren Pet is also inseparable from Base’s retweets. In fact, Base and Fren Pet are mutually beneficial, and Fren Pet needs Base to gain greater traffic exposure and arouse users’ fomo psychology. And Base also needs more Fren Pets to bring more funds, traffic, real users and revenue to the Base chain.

Fren Pet and friend.tech are similar in that they rely on users’ expectations of future revenue to guide users to high-frequency interactions and buying and selling operations in gaming and social scenarios. This will bring a more prosperous on-chain user ecosystem and accelerated on-chain gas revenue to Base. At its peak, friend.tech single-handedly contributed nearly half of the daily gas spend on the Base chain. Compared with friend.tech simple buying and selling Keys, Fren Pet has more high-frequency interaction scenarios in the game, such as feeding and Bonn, and users pay more gas fees as the real income of the base while operating frequently.

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As L2s become more and more homogeneous, Base has captured a large number of active user traffic by diverting traffic to popular apps, and has embarked on a different development path from other L2s. It is expected that in the future, more FrenX applications with fomo attributes and high-frequency interactive scenarios will emerge on Base, and continue to provide fresh blood to the Base ecosystem. FrenX doesn’t necessarily bring a huge wealth effect to users, but Base is the winner behind the real money.