Friend.tech experienced an unprecedented 7.8% drop in Total Value Locked (TVL) in just one day. This signals a significant decline in its operational performance.
Tom Wan, a meticulous data analyst, unveiled a significant drop in the network’s TVL via Dune analytics. His tweet on October 4th disclosed an alarming loss of about 2.3K Ethereum, marking the most substantial single-day dip in TVL.
Furthermore, according to data from DefiLlama statistics, the Base-based platform saw a decline in Total Value Locked (TVL). It went from 29.19K ETH to 27.14K ETH on October 4th. This decrease began on October 3rd, with an initial reduction of around 1.30K ETH. By October 6th, TVL had dropped further to 26.48K ETH.
The most profound plummet, however, occurred on October 4th, with a recorded decline of roughly 7.8%, as attested by Tom Wan. Despite lower TVL, dormant capital remained steady at 10.34K ETH (about $17M) on October 4th, post key redemptions.
Additionally, reports indicate that despite the decrease in TVL, the pool of unused assets has not been impacted. This implies that users still have the opportunity to re-enter the market as they see fit.
Unprecedented Heights Attained in Key Redemptions
Tom Wan’s detailed thread shed light on the statistics concerning key redemptions. September 14th stood out as the peak, witnessing an astonishing redemption of keys worth 6.7K ETH. However, it’s important to note that an equivalent value of 6.9K ETH in keys was minted during the same period.
On October 4th, a record 2.1K ETH (approx. $3.5M) was redeemed, as detailed in the thread.
Upon redeeming their keys, users possess the option to either retain the Ethereum within the application or completely withdraw it from the system. On October 4th, those who chose redemption withdrew funds, leaving no increase in idle capital.
Navigating Chang’s Strategic Moves and Total Value Locked Dynamics in Friend.tech’s Ecosystem
Chang, a prominent holder of keys, was amongst those who engaged in redemptions. According to reports, Chang offloaded a total of 43 of his keys, reaping profits of around 140 ETH (equivalent to $232K).
This offloading event triggered a significant depreciation in the key’s value, plummeting from 3.89 ETH per key to 2.64 ETH.
Notwithstanding, Chang’s gains are still housed in his FT account. He allocated 77 ETH to mint new keys on October 4th, of which 39 ETH was utilized to repurchase 15 of his keys at a reduced rate of 2.27 ETH.
As per reports, the recent and ongoing sim swap dilemma is accountable for the abrupt dip in TVL. Reports suggest that a malefactor could potentially amass $387K in Ethereum through sim swap attacks targeting the network’s users.
Subsequently, in response to numerous grievances that surfaced a few days prior, Friend.tech implemented system upgrades, including the introduction of login removal options. Nevertheless, according to Tom Wan, the recent surge in withdrawals and subsequent TVL dips can be chiefly attributed to the prevalence of sim swap attacks.
Read More:
Standard Protocol Launches on Linea Network, Plans for DeFi Expansion