On Sept. 8, the team behind the decentralized social media protocol Friend.Tech made a surprising move by transferring control of its smart contract to Ethereum’s null address. This effectively relinquished control of the project one year after its successful launch. In a social media post on X, the team explained that the admin and ownership parameters have been set to 0x000…000 to prevent any changes to their fees or functionality in the future.
Despite this change, 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 sharp decline of over 47% in just 24 hours, reaching an all-time low of $0.06026, according to CryptoSlate data at press time. While the team has not provided a clear reason for this move, CryptoSlate’s analysis of on-chain data sheds light on the platform’s steep decline in popularity.
Friendtech’s Decline
Friend.Tech originally launched in August last year on Coinbase’s Layer 2 network Base and quickly gained traction in the crypto community. By September 2023, the protocol’s daily earnings surpassed Ethereum’s, and its top keys fetched high prices. The platform also raised an undisclosed seed round from crypto VC firm Paradigm around that time.
However, the platform began to face challenges, including sim swap attacks and mismanaged plans to exit the Base blockchain. These issues led to a rapid decline in user engagement. Data from Dune Analytics shows that the platform’s transaction volume plummeted by 99%, and by September, it was struggling to attract new users.
As a result of these challenges, revenue also took a hit, dropping to just $21 over the last 30 days, according to DeFillama data. During the same period, the platform generated less than $10,000 in fees.
Crypto Community Reactions
The downfall of Friend.Tech has sparked criticism from the crypto community, particularly regarding the team’s handling of the project. Calvin Chu, a core builder at Impossible Finance, expressed disappointment, calling Friend.Tech more of a lab experiment than a genuine social finance project. He also voiced frustration over the decision to shut down future upgradeability, which he believed killed any hopes for further development.
Mikko Ohtamaa, the CEO of Trading Strategy, also weighed in, calling Friend.Tech a prime example of monetizing hype and quickly cashing out.
Conclusion
As Friend.Tech surrenders control of its smart contract and faces a significant decline in both user engagement and revenue, the project serves as a cautionary tale in the fast-paced world of decentralized social media platforms. The decision to relinquish control has drawn criticism from the crypto community, highlighting the challenges faced by projects seeking to disrupt traditional social media models.
As the industry continues to evolve, it is clear that innovation alone is not enough to sustain a project. Effective governance, community engagement, and adaptability are crucial components for long-term success in the ever-changing landscape of decentralized finance. Friend.Tech’s story is a reminder that while launches may be successful, true sustainability requires ongoing commitment and strategic planning.
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