Friend.Tech Relinquishes Control Amid Revenue Decline And Plummeting Token Value
By: Isha Das
In a significant development, on September 8, the team behind the decentralized social media protocol Friend.Tech transferred control of its smart contract to Ethereum's null address. This move, coming one year after its successful launch, effectively relinquished control of the project. In the announcement on social media platform X, the team stated: 'Admin and ownership parameters have been set to 0x000...000 to prevent any changes to their fees or functionality in the future.'
Despite this shift, the Friend.Tech web client will continue to operate. The team clarified that no fees from either the smart contracts or Friend.Tech currently go to the development team's multisig.
Following this announcement, the platform's native token FRIEND experienced a dramatic fall, plummeting by over 47% within 24 hours to reach an all-time low of $0.06026. While the team has yet to provide a clear rationale for this move, an analysis of on-chain data highlights a significant decline in the platform's popularity.
Friend.Tech's Initial Success and Subsequent Challenges
Launched in August last year on Coinbase's Layer 2 network Base, Friend.Tech initially gained rapid traction within the crypto community. By September 2023, the protocol's daily earnings even surpassed Ethereum's, and its top keys fetched high prices. Around the same period, the platform secured an undisclosed seed round from crypto VC firm Paradigm.
However, the initial hype did not last. Friend.Tech faced several challenges, including sim swap attacks and mismanaged plans to exit the Base blockchain. These issues contributed to a sharp decline in user engagement. Data from Dune Analytics indicates that the platform's transaction volume dropped by 99%, and by September, it was struggling to attract new users.
This decline significantly impacted revenue, which fell to just $21 over the last 30 days, according to DeFillama data. During this period, the platform generated less than $10,000 in fees—a stark contrast to its early performance.
Community Reactions
Friend.Tech's downfall has drawn widespread criticism from the crypto community, particularly regarding the team's handling of the project. Calvin Chu, a core builder at Impossible Finance, expressed his disappointment, saying, 'Friend.Tech had become more of a lab experiment than a genuine social finance project.' He further voiced frustration at being 'rugged' by the decision to shut down future upgradeability, effectively ending any hope for further development. Similarly, Mikko Ohtamaa, the CEO of Trading Strategy, stated that Friend.Tech was a prime example of monetizing hype and quickly cashing out.
As the crypto community grapples with Friend.Tech's rapid rise and fall, the broader implications for social finance projects remain to be seen. The shift in control marks a pivotal moment for the platform, now facing an uphill battle to regain its initial momentum and user trust.
