On Sept. 8, the team behind the decentralized social media protocol Friend.Tech made a significant announcement. They transferred control of its smart contract to Ethereum’s null address, effectively relinquishing control of the project one year after its successful launch.
In a social media post on X, the team stated:
“Admin and ownership parameters have been set to 0x000…000 to prevent any changes to their fees or functionality in the future.”
Despite this transfer of control, the web client at Friend.Tech will continue to operate as usual. The team also clarified that “No fees from either the smart contracts or Friend.Tech currently go to the dev team multisig.”
Following this announcement, the platform’s native token FRIEND experienced a drastic 47% drop in value within 24 hours, reaching an all-time low of $0.06026, according to data from CryptoSlate at press time.
While the team has not provided a clear reason for this move, analysis of on-chain data by CryptoSlate reveals the platform’s steep decline in popularity.
Friendtech’s decline
Friend.Tech, which launched in August last year on Coinbase’s Layer 2 network Base, initially saw rapid growth and popularity within the crypto community.
By September 2023, the protocol’s daily earnings surpassed those of Ethereum, and its top keys were being sold for high prices. During this period, the platform also secured an undisclosed seed round from crypto VC firm Paradigm.
However, the initial excitement surrounding Friend.Tech waned as the platform encountered various challenges, including sim swap attacks and difficulties in transitioning away from the Base blockchain.
These challenges led to a significant decrease in user engagement. Data from Dune Analytics shows a 99% drop in the platform’s transaction volume, and by September, there was a lack of new users joining the platform.
This decline in user activity also had a detrimental impact on revenue, which plummeted to just $21 over the last 30 days, as reported by DeFillama data. During the same period, the platform generated less than $10,000 in fees.
Crypto community reacts
Friend.Tech’s downfall was met with widespread criticism from the crypto community, particularly regarding the team’s management of the project.
Calvin Chu, a core builder at Impossible Finance, expressed his disappointment, stating, “Friend.Tech had become more of a lab experiment than a genuine social finance project.” He also expressed frustration over feeling “rugged” by the decision to halt future upgrades, which, in his opinion, signaled the end of any potential for further development.
Similarly, Mikko Ohtamaa, the CEO of Trading Strategy, characterized Friend.Tech as a prime example of capitalizing on hype and swiftly cashing out.
Conclusion
As the dust settles on the demise of Friend.Tech, it serves as a cautionary tale in the fast-paced world of decentralized social media and blockchain projects. The rapid rise and fall of this once-promising protocol underscore the importance of sustainable growth, community trust, and transparent leadership in the crypto space.
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