Critics are declaring the decentralized social network Friend.tech "dead" less than three weeks after its launch due to a recent decline in key metrics. The platform launched its lively beta on Coinbase's Layer 2 Base on August 11. Just a week later, its fees surged to over $1 million within 24 hours, surpassing major platforms like Uniswap and the Bitcoin network.
However, the platform's fees have significantly dropped since then. Data from DefiLlama indicates that daily fees reached a peak of $1.7 million on August 21 but fell by more than 87% to around $215,000 on August 26. Similarly, transaction volume has plummeted over 90% from its peak of almost 525,000 transactions on August 21 to just over 51,000 transactions on August 27, leading to concerns expressed on social media platforms like Twitter.
Friend.tech's model focuses on trading "keys," which grant buyers the ability to send private messages to sellers. The platform reportedly charges a 5% commission. It gained attention from both crypto and non-crypto influencers, such as podcast host Cobie of UpOnly, YouTuber Faze Banks, and the Russian protest group Pussy Riot.
Coinbase payments risk manager Lisandro Rodriguez labeled the platform "dead" due to what he perceived as "greed and poor execution." As fees declined, so did the number of buyers and sellers. On August 27, there were about 10,000 buyers and 7,800 sellers , compared to a peak of over 58,000 buyers on August 21. The number of sellers stood at 27,000.
Inflows also saw a decline, dropping nearly 90.5% from its peak of $16.8 million on August 21 to around $1.6 million on August 27. Community members had already shared concerns about the platform's future before the decline. Cryptocurrency comment ator Yazan predicted a drop in user key prices and activity within six to eight weeks, questioning the sustainability of increasing user key prices and the willingness of people to pay high prices for private chats. Friend.tech's model is reminiscent of the 2021 DeSo app BitCloud, and some experts, like the pseudonymo us Web3 marketer Legendary, anticipate that Friend. tech might face a fate similar to BitClout.
