Less than a month after its debut, the decentralized social network Friend.tech has been labeled as “dead” by critics due to a significant decline in crucial metrics such as activity, inflows, and volume.
Friend.tech experienced a successful beta launch on Coinbase’s layer-2 base on August 11. By August 19, its fees had exceeded $1 million in 24 hours, surpassing both Uniswap and the Bitcoin network. However, this success was short-lived as its fees plummeted drastically. According to DefiLlama, daily fees reached a high of $1.7 million on August 21 but fell by over 87% to approximately $215,000 on August 26.
Furthermore, transaction numbers on Friend.tech also decreased by over 90% from nearly 525,000 at its peak on August 21 to just over 51,000 transactions on August 27, as per data from Dune Analytics compiled by Crypto Koryo. This sharp decline led many on X (Twitter) to express their condolences for the network. Friend.tech operates by enabling the purchase and sale of “keys” that allow buyers to send private messages to sellers, with the platform reportedly taking a 5% commission.
The platform had gained popularity among both crypto and non-crypto influencers, including UpOnly podcast host Cobie, YouTuber Faze Banks, and Russian protest group Pussy Riot.
Coinbase payments risk manager, Lisandro Rodriguez, expressed on X on August 27 that the platform was “dead” due to “greed and poor execution.” Concurrently, the number of buyers and sellers also plummeted, with Dune data indicating a decrease from over 58,000 buyers and 27,000 sellers on August 21 to around 10,000 buyers and 7,800 sellers on August 27. Inflows also suffered a nearly 90.5% drop from $16.8 million on August 21 to around $1.6 million on August 27.
Prior to this dramatic decline, some community members had already expressed pessimistic predictions for the platform. Crypto commentator Yazan told Cointelegraph that he believed Friend.tech would experience a decline in user key prices and activity within six to eight weeks. He argued that the increase in user key prices was unsustainable and questioned the rationale behind paying more than 1 Ether to access a private chat.
The trajectory of Friend.tech has been compared to the 2021 DeSo app BitCloud, with pseudonymous Web3 marketer legendary predicting that Friend.tech “will collapse as BitClout did.”