Less than three weeks after its highly-anticipated launch, Friend.tech, the decentralized social network, is already facing its own eulogies. Critics are ringing the death knell as key metrics, including activity, inflows, and transaction volume, experience a significant downturn. Friend.tech – is it truly “dead” or merely undergoing a transformative phase?
Read More: Friend.tech: The Crypto Social Network with $1M Success in 24h
The Meteoric Rise
Friend.tech made a grand entrance into the crypto sphere with its beta version launch on Coinbase’s layer-2 Base on August 11th. Within a week, its fees soared to over $1 million in a single day, outshining giants like Uniswap and the Bitcoin network.
The Sudden Plunge
However, the euphoria didn’t last long. Daily fees, which peaked at $1.7 million on August 21st, plummeted by over 87% to approximately $215,000 by August 26th, as reported by DefiLlama. Transactions on Friend.tech also nosedived, with a staggering 90% drop from nearly 525,000 on August 21st to just over 51,000 on August 27th, according to Dune Analytics data compiled by Crypto Koryo. The Twitterverse was soon flooded with condolences for the beleaguered network.
The Business Model
Friend.tech’s core revolves around the buying and selling of “keys” that grant access to private messages between users, with the platform taking a 5% cut. Its unique concept attracted crypto and non-crypto influencers, such as UpOnly podcast host Cobie, YouTuber Faze Banks, and the Russian protest group Pussy Riot.
The “Dead” Verdict
In a candid August 27th post on Twitter, Lisandro Rodriguez, Coinbase payments risk manager, didn’t mince words. He declared the platform “dead,” attributing its demise to “greed and poor execution.”
Alongside the fee freefall, the number of buyers and sellers also tanked. On August 27th, the platform witnessed approximately 10,000 buyers and 7,800 sellers, a stark contrast to the peak on August 21st, which saw over 58,000 buyers and 27,000 sellers, according to Dune data.
Inflows Dry Up
Dune data also revealed that inflows suffered a drastic decline from the August 21st high of $16.8 million to a meager $1.6 million on August 27th — an alarming 90.5% decrease.
Even before the recent downturn, some community members had already voiced their pessimism regarding the platform’s future. Crypto commentator Yazan predicted a decline in user key prices and activity within six to eight weeks.
He questioned the sustainability of price hikes for user keys, with some paying more than 1 Ether to access private chats.
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Friend.tech’s journey, from a promising star to a pronounced “dead” project, serves as a stark reminder of the volatile and unforgiving nature of the cryptocurrency world. Greed, execution issues, and unsustainable models can quickly turn the tide against even the most hyped platforms. As we bid adieu to Friend.tech, it’s a poignant lesson for both crypto enthusiasts and investors alike to tread cautiously in this ever-evolving digital landscape.
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