Less than three weeks after its launch, the decentralized social network Friend.tech has already been declared “dead” by critics, following a recent drop in key metrics such as activity, inflows and volume.
Friend.tech had a buzzy beta version launch on Coinbase’s layer-2 Base on Aug. 11. A week later, its fees surpassed $1 million in 24 hours on Aug. 19 outshining Uniswap and the Bitcoin network.
However, its fees have since cratered. Daily fees peaked at $1.7 million on Aug. 21, but dropped over 87% to around $215,000 on Aug. 26 according to DefiLlama.
Transactions on Friend.tech also declined over 90% from the nearly 525,000 peak on Aug. 21 with just over 51,000 transactions on Aug. 27, Dune Analytics data complied by Crypto Koryo shows, leading many on X (Twitter) post condolences for the network.
August 2023-August 2023 pic.twitter.com/Fb0bh23Fyo
— Beanie (@beaniemaxi) August 26, 2023
Friend.tech is centered on buying and selling “keys” that enable the buyer to send private messages to the seller, with the platform reportedly taking a 5% cut.
It’s attracted crypto and non-crypto influencers including UpOnly podcast host Cobie, YouTuber Faze Banks and Russian protest group Pussy Riot.
In an Aug. 27 X post, Coinbase payments risk manager Lisandro Rodriguez opined that the platform is “dead,” due mainly to “greed and poor execution.”
Friend tech is dead because of greed and poor execution. We can see that after the initial influencer pump volume has fallen off a cliff. Let’s dig into how this failure came to be pic.twitter.com/WDQncTQJ21
— Lisandro (@TheRealLisandro) August 27, 2023
Alongside the fee decline, buyers and sellers have also tanked, with Aug. 27 seeing around 10,000 buyers and 7,800 sellers compared to the Aug. 21 peak of over 58,000 buyers and 27,000 sellers, per Dune data.
Friend.tech buyers (green) and sellers (orange) have both steadily declined since the peak on Aug. 21. Source: Dune
Dune shows inflows have also taken a dive from the Aug. 21 high of $16.8 million with Friend.tech seeing around $1.6 million on Aug. 27 — a nearly 90.5% decrease.
Protocol inflows peaked on Aug. 21 but have since trended down. Source: Dune
Before the decline over the past week, some community members had already shared their bearish predictions for the platform.
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Last week, crypto commentator Yazan told Cointelegraph of factors that led him to believe Friend.tech had between six to eight weeks before it would see a decline in user key prices and activity.
Yazan said the user key price increases were unsustainable and questioned why so many would pay upwards of 1 Ether (ETH) “to be able to see a private chat.”
The platform has drawn parallels to the 2021 DeSo app BitCloud with pseudonymous Web3 marketer Legendary saying he believes Friend.tech “will collapse as BitClout did.”
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Author: Jesse Coghlan