Decentralized social network Friend.tech, which captured attention with its buzzworthy launch earlier this month, is now facing intense scrutiny as key metrics experience a rapid decline, playing into earlier concerns about the platform’s viability and intention.
Critics across social media have begun to declare the platform “dead” following a significant drop in activity, inflows, and volume – within just three weeks of its launch. Not to mention other justified concerns throughout its early lifecycle.
What is Friend.tech?
Friend.tech made a splash with its beta version debut on Coinbase’s layer-2 Base platform on August 11, which takes the level (and ego) of today’s influencers to the next level by allowing them to sell “keys” that are linked directly to their “X” (formerly TwitteR) accounts that allow fans/supporters to message them privately. The platform reportedly takes a 5% cut from these transactions.
Its allure extended to both cryptocurrency and non-crypto influencers, drawing personalities such as Cobie from the UpOnly podcast, Faze Banks from YouTube, and the Russian protest group Pussy Riot.
The drop in inflows also points to a significant shift, with Friend.tech witnessing a decline from its high of $16.8 million on August 21 to around $1.6 million on August 27, marking a substantial decrease of nearly 90.5 percent, according to CoinTelegraph.
This “promising platform” comes in wake of X CEO Elon Musk’s decision to restrict anyone who isn’t subscribed to Twitter Blue from messaging anyone that is — the irony here of course being that Musk’s earlier beliefs that the platform’s “corrupt” blue-badge verification programs were alienating people simply took another disguised form fueled purely by greed and politicized ad revenue. And don’t forget X’s new creator “cash-out” program that is solely based on impressions, rather than quality control.
Friend.tech launched on Coinbase’s layer-2 Base blockchain and quickly gained traction with social media influencers and others with big followings. During this “honeymoon” launch period, the platform’s fees soared to over $1 million on August 19 within a 24-hour span, surpassing notable platforms like Uniswap and the Bitcoin network.
In previous nft now coverage, we highlighted the various opinions and commentary as to whether this new platform was a “paradigm shift” or simply another fad that comes and goes to the detriment of investors – all fueled by artificial hype and ill-equipped organizational structure.
Alex Valaitis, a controversial personality in this new crypto landscape, referred to Friend.tech as a “high stakes game of musical chairs” – indicating his belief that the only ones who make it out with any gain are “the first one’s in…and first one’s out.”
Indeed, the platform’s fortunes have now taken a sharp turn. The fees, which once reached a peak of $1.7 million on August 21, have now plummeted by over 87% to around $215,000 as of August 26, according to data from DefiLlama.
In a candid post on “X” (formerly Twitter) on August 27, Coinbase’s payments risk manager Lisandro Rodriguez expressed his belief that the platform is now “dead” due to “greed and poor execution.”
The decline in fees has been mirrored by a sharp decrease in buyers and sellers, with August 27 recording around 10,000 buyers and 7,800 sellers compared to the peak of over 58,000 buyers and 27,000 sellers on August 21, as reported by Dune data.
Simultaneously, the number of transactions on Friend.tech has seen a staggering decline of over 90% from its peak of nearly 525,000 on August 21, plummeting to just over 51,000 on August 27, according to data curated by Crypto Koryo.
As Friend.tech faces these challenges, parallels have been drawn to the 2021 DeSo app BitClout. Pseudonymous Web3 marketer Legendary expressed his belief that Friend.tech might experience a similar fate, stating that he thinks it “will collapse as BitClout did.”
Could this be yet another disguised example of greed and quick profits?
Editor’s note: This article was written by an nft now staff member in collaboration with OpenAI’s GPT-4.