Less than three weeks after its launch, the decentralized social network Friend.tech was declared “dead” by critics due to recent declines in key indicators such as activity, inflows, and transaction volume.
On August 11th, Friend.tech launched a lively beta on Coinbase’s Layer 2 Base. A week later, on August 19, its fees topped $1 million in 24 hours, surpassing Uniswap and the Bitcoin network.
However, its fees have since dropped significantly. According to DefiLlama, daily fees peaked at $1.7 million on Aug. 21, but fell by more than 87% to around $215,000 on Aug. 26.
Dune Analytics data collated by Crypto Koryo shows that Friend.tech’s transaction volume is also down more than 90% from its peak of nearly 525,000 transactions on August 21, and slightly above 51,000 transactions on August 27, leading to X (Twitter) Many people posted their condolences. network.
RIP Youde Technology
August 2023 – August 2023 pic.twitter.com/Fb0bh23Fyo
— Beanie (@beaniemaxi) August 26, 2023
Friend.tech focuses on buying and selling “keys” that enable buyers to send private messages to sellers, and the platform reportedly charges a 5% commission.
It has attracted crypto and non-crypto influencers, including UpOnly podcast host Cobie, YouTuber Faze Banks and Russian protest group Pussy Riot.
In an Aug. 27 post, Coinbase payments risk manager Lisandro Rodriguez argued that the platform was “dead” due to “greed and poor execution.”
Friend Tech died due to greed and poor execution. We can see that after the initial influencer pump volume has dropped off dramatically.Let’s dig into how this failure happened pic.twitter.com/WDQncTQJ21
— Lisandro (@TheRealLisandro) August 27, 2023
As fees fell, so did buyers and sellers, with about 10,000 buyers and 7,800 sellers on Aug. 27, compared with a peak of more than 58,000 buyers on Aug. 21, according to Dune data. The number of sellers is 27,000.
Dune shows inflows are also down from the Aug. 21 high of $16.8 million, with Friend.tech seeing inflows of about $1.6 million on Aug. 27, a drop of almost 90.5%.
Before last week’s drop, some community members had shared their gloomy predictions for the platform.
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Last week, cryptocurrency commentator Yazan revealed to Cointelegraph factors that lead him to believe Friend.tech will see a drop in user key prices and activity within six to eight weeks.
Yazan said that user key price increases are unsustainable, and questioned why so many people are willing to pay more than 1 ether (ETH) “to see private chats.”
The platform, similar to 2021 DeSo app BitCloud, is offered by pseudonymous Web3 marketer Legendary explain He believes Friend.tech “is going to crash like BitClout did.”
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