The latest craze in the crypto world, Friend.Tech, is facing a significant issue with the presence of automated bots and speculative games. These bots are capable of manipulating the platform, affecting its integrity and fairness. Automated bot activity can manipulate trading volumes, prices, and other market-related metrics.
Blink, and you will most probably miss the latest crypto fad. Critics have quickly labeled the decentralized social network Friend.Tech as “dead” within three weeks after its inception, citing a recent decline in crucial indicators such as user engagement, influx of users, and overall usage volume.
What is Friend.Tech?
Friend.Tech is a decentralized social network in which friends or, more precisely, their networks are transformed into Shares or Keys. You can invest in your friend’s social network or any other group of users in order to tokenize their credibility.
This decentralized social application is unlike anything crypto investors have ever encountered. Every user here is comparable to a social token. You can purchase this social token, sell it for a profit, or retain it as its value rises in tandem with the credibility of its users.
In contrast, the shares grant access to influencer-exclusive discussion rooms, exclusive content, and more. As of August 21, 2023, the program had over 80,000 users and has facilitated over 1 million transactions worth $50 million. But this was short-lived.
According to DeFiLlama data, less than two weeks after its Aug. 10 debut, fees on Friend.Tech — where 10% of every token purchase or sale is split between the influencer and the platform — reached a peak of around $1.7 million.
According to a Dune Analytics dashboard, at one point, Friend.Tech was the highest-earning platform after the Ethereum blockchain itself, with the app making about $7.5 million in fees since its launch as of Friday.
The road comes to an end for Friend.Tech
On August 11, Friend.Tech released an exciting beta version on Coinbase’s layer-2 Base. A week later, on August 19, its fees exceeded $1 million in 24 hours, surpassing Uniswap and the Bitcoin network.
However, since then its prices have plummeted. According to DefiLlama, daily fees reached a high of $1.7 million on August 21 but fell to approximately $215,000 on August 26.
Dune Analytics data compiled by Crypto Koryo shows that Friend.Tech transactions dropped by over 90% from their apex of nearly 525,000 on August 21 to just over 51,000 on August 27, prompting many on X (Twitter) to post condolences for the network.
The entity attracted crypto and non-crypto influencers, such as the UpOnly podcast presenter Cobie, the YouTuber Faze Banks, and the Russian protest group Pussy Riot.
In a post published on X on August 27th, Coinbase payments risk manager Lisandro Rodriguez stated that the platform is “dead” due to “greed and poor execution.”
According to Dune data, buyers and sellers have also plummeted, with roughly 10,000 buyers and 7,800 sellers on August 27 compared to over 58,000 buyers and 27,000 sellers on August 21.
Dune reveals that inflows have dropped from a peak of $16.8 million on Aug. 21 to about $1.6 million on Aug. 27 – a nearly 90.5% drop. Some community members had previously shared their gloomy expectations for the platform prior to the recent drop.
The platform has been compared to the 2021 DeSo app BitCloud, with the pseudonymous Web3 marketer Legendary predicting that Friend.Tech will fail in the same manner as BitClout.
Effects on the Base Network
Additionally, bots had infiltrated the network, causing transaction surges and leading them. The platform provided a significant lift to the Coinbase layer-2 network Base, which last week saw an increase in TVL and activity.
This downtrend on Friend.Tech has considerably reduced Base transactions and activity, with less than five transactions processed per second. Last week, Ryan Wyatt, former president of Polygon Labs, predicted:
In its current form, you’re basically looking at an unintended Ponzi with first in/first out because there isn’t any product feature depth to create stickiness or retention.Ryan Wyatt
Additionally, fake accounts appear to be being created to revitalize the platform. There may be a connection with the social media platform for adults, OnlyFans, which has reportedly invested in Ethereum. One observer remarked: “Seems like more OF girls will probably start getting actively involved in crypto like we saw with Friend Tech,”