Demise of Friend.tech: Decline in Activity and Fees Renders the Platform ‘Dead

A mere twenty days after its eagerly anticipated launch, Friend.tech, a decentralized social network, finds itself mired in a state of what many critics have prematurely deemed “death.” This stark judgment arises from a recent plummet in essential metrics such as user activity, transaction volume, and inflows.

Friend.tech’s initial foray into the limelight came through a high-profile beta version launch on Coinbase’s layer-2 Base on August 11. The ensuing week saw the platform’s fees surging past the $1 million mark within a 24-hour window on August 19, a remarkable feat that outshone established players like Uniswap and the Bitcoin network.

However, this initial spike in fees has proven ephemeral. After peaking at a staggering $1.7 million on August 21, the fees have dramatically nosedived by over 87%, settling at approximately $215,000 by August 26, as per DefiLlama data.

The decline in transactional activity on Friend.tech mirrors this trend. Transaction numbers shrunk by over 90% from their zenith of nearly 525,000 on August 21, dwindling to just over 51,000 by August 27, according to Crypto Koryo’s Dune Analytics data. The waning metrics led to an outpouring of condolences on platforms like Twitter, where users expressed their sentiments regarding the network’s apparent downfall.

Central to Friend.tech’s premise is the exchange of “keys,” which grant buyers the ability to send private messages to sellers, with the platform pocketing a 5% fee for each transaction. The platform’s allure has attracted both crypto and non-crypto influencers, including figures like Cobie, the host of the UpOnly podcast, Faze Banks, a prominent YouTuber, and the Russian protest collective Pussy Riot.

In an August 27th post on X (Twitter), Lisandro Rodriguez, Coinbase’s payments risk manager, offered a blunt assessment, declaring the platform “dead” due to a combination of “greed and poor execution.”

Beyond the fee downturn, the ranks of buyers and sellers have also experienced a sharp contraction. On August 27, the figures stood at roughly 10,000 buyers and 7,800 sellers, a stark contrast to the peak of over 58,000 buyers and 27,000 sellers recorded on August 21, according to data from Dune.

Moreover, inflows have taken a significant hit, plunging by nearly 90.5% from their zenith of $16.8 million on August 21 to a mere $1.6 million on August 27.

Even before this tumultuous week, members of the community had expressed their bearish outlooks for the platform. Last week, crypto commentator Yazan shared insights, foreseeing a decline in user key prices and activity within six to eight weeks. Yazan deemed the surges in user key prices unsustainable and questioned the rationale behind paying a significant amount of Ether “to be able to see a private chat.”

The unfolding narrative of Friend.tech has drawn parallels to the DeSo app BitCloud from 2021, with the pseudonymous Web3 marketer Legendary suggesting a parallel collapse for Friend.tech, akin to the fate experienced by BitClout.

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