The Friend.tech decentralized social network is experiencing a rapid decline in crucial metrics. Critics are declaring its demise a little over two weeks after its much-anticipated launch on Coinbase’s layer-2 Base on August 11.
The platform initially garnered substantial attention. Remarkably, its fees exceeded $1 million in just 24 hours on August 19, overshadowing prominent names such as Uniswap and Bitcoin’s network.
However, the once-promising platform has experienced a steep decline in its fees. While daily charges reached a peak of $1.7 million on August 21, they have since plunged by more than 87% to around $215,000 by August 26, as indicated by DefiLlama data.
Decline and Challenges Faced by Friend.tech: A Comprehensive Overview
Additionally, the transaction volume on Friend.tech has nosedived by over 90% from its zenith of nearly 525,000 on August 21. Merely 51,000 transactions were logged on August 27, according to figures compiled by Crypto Koryo utilizing Dune Analytics information. This rapid downturn has prompted a surge of condolences from Twitter users.
Central to Friend.tech’s approach is the exchange of “keys,” allowing buyers to transmit private messages to key holders. The platform retains a 5% portion from these deals.
Remarkably, it garnered notice from influencers in both the cryptocurrency and non-cryptocurrency spheres. These included personalities like Cobie, the host of UpOnly podcast, YouTuber Faze Banks, and the Russian activist ensemble Pussy Riot.
A telling X post on August 27 by Lisandro Rodriguez, a risk manager at Coinbase Payments, pronounced the platform “dead” due to what he described as “greed and poor execution.”
Friend.tech Declared Dead: Metrics Plunge and Community Concerns
Simultaneously, there has been a sharp drop in the count of both buyers and sellers within the platform. Specifically, on August 27, the platform registered around 10,000 buyers and 7,800 sellers. This stands in stark contrast to its zenith on August 21, during which it boasted over 58,000 buyers and 27,000 sellers, as outlined by data sourced from Dune.
Inflows suffered significantly, plummeting from a peak of $16.8 million on August 21 to approximately $1.6 million on August 27. This marks a staggering decline of nearly 90.5%, according to data from Dune.
Moreover, prior to this recent decline, specific community members had already conveyed negative sentiments regarding the platform’s prospects.
Crypto analyst Yazan had earlier voiced worries about the unsustainable surge in user key costs and engagement levels. He also questioned the reason for paying a high amount, often over 1 Ether (ETH), just to access private chats.
In response, parallels have been drawn to the 2021 DeSo app BitCloud. Web3 marketer Legendary has proposed that Friend.tech might mirror BitClout’s trajectory and face a comparable downfall.
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