The creators of cryptocurrency-fueled social network Friend.tech relinquished control over the platform’s smart contracts Saturday, signaling that development work has effectively ended just four months after its token launched.
The invite-only application built on Ethereum layer-2 network Base burst onto the crypto scene in August last year, letting users buy and sell “keys” attached to Twitter (aka X) accounts. Describing itself as a “marketplace for your friends,” the keys let Friend.tech users access private group chats within Friend.tech’s app.
In a Saturday post on Twitter (aka X), the project said that “admin and ownership parameters” had been set to an address that’s commonly used to burn (or permanently destroy) tokens. Friend.tech said the move was made to prevent any changes to its platform’s “fees or functionality” for the foreseeable future.
Since launching last August, Friend.tech’s protocol has generated $22 million in fees according to a Dune dashboard. Until recently, the platform charged a 10% fee on transactions, which was split evenly between Frend.tech and the owner of an account that a key was based on.
Admin and ownership parameters have been set to 0x000…000 to prevent any changes to their fees or functionality in the future.
This change does not affect the separate web client operated at https://t.co/YOHabcBL3H which will continue to function as is. No fees from either…
— friend.tech (@friendtech) September 8, 2024
Alongside its statement Saturday, Friend.tech said that “no fees from either smart contracts or friend.tech” currently go to a wallet controlled by the project’s development team. It effectively means that Friend.tech’s makers are no longer benefiting from user activity on the once-popular platform—and it’s unable to change that as of Saturday’s shift in direction.
The total amount of money that Friend.tech earned is somewhat unclear, with DefiLlama estimating that the figure totaled $63 million. At the same time, it’s unknown what those funds ultimately went to, as the platform’s users await clarification on what Friend.tech’s move entails for the future of the platform.
The wallet tied to Friend.tech’s development team currently has a balance of around $193,000 across various tokens, according to the crypto analytics platform Arkham. Over the past eight months, that wallet has deposited $36 million worth of Ethereum to crypto exchange Coinbase.
Other wallets linked to Friend.tech’s platform have made significant deposits to Coinbase as well, including one that received transaction fees. The wallet, which deposited $16 million worth of Ethereum into Coinbase nine months ago, currently has a balance of $177 in Ethereum.
Even though Friend.tech’s announcement appears to signal an end to the project’s future development, the project said that the Web3 social network will “continue to function as-is” following the update.
During Friend.tech’s heyday, the platform saw participation from popular crypto influencers, including the pseudonymous meme coin trader Ansem as well as Su Zhu, the co-founder of bankrupt crypto hedge fund Three Arrows Capital. In total 905,000 different accounts created keys on the platform.
Meanwhile, the Twitter account belonging to one of the project’s pseudonymous co-founders, Racer, has either been deleted or temporarily taken offline. And the project’s other pseudonymous co-founder, Shrimp, has made his Twitter account private.
While Friend.tech saw early success in mixing social media with speculation, the drop-off in user activity has been dramatic. Last September, the network registered a peak of 500,000 daily transactions, but that figure had since fallen below 200 transactions as of Saturday.
As Friend.tech activity has faded, so too has the price of FRIEND. Shortly after the Ethereum token launched in May, it hit a peak price above $3. But FRIEND’s value has since fallen 97% over the course of a few months, hitting $0.07 on Monday, according to CoinGecko.
While the Web3 social media network once drove significant amounts of user activity on Base, it was never able to expand beyond the Coinbase-incubated layer-2 network. A month after saying it would launch its own Ethereum scaling network, Friend.tech ultimately scrapped the plan in July.
Last year, Friend.tech raised an undisclosed amount of seed funding in a round led by venture capital firm Paradigm, according to CryptoRank. Friend.tech’s early success partly led to the establishment of SocialFi as an umbrella term for similar crypto projects.
Before launching Friend.tech, the project’s pseudonymous co-founders created Stealcam. Billed as a decentralized media distribution platform, the SocialFi experiment tried to incentivize users into buying JPEGs from each other to view their hidden contents.
Even though Friend.tech’s future has been called into question, the project has seen a slight bump in activity following Saturday’s announcement. On Monday, the platform saw 18 users purchasing keys, while 192 were looking to offload them.
Edited by Andrew Hayward
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Source: https://decrypt.co/248576/friendtech-creators-bail-ethereum-social-platform
