Friend.tech, the decentralized social network, has been on a roller coaster ride since its launch. After a promising start, the platform was declared ‘dead’ by critics due to a significant drop in key metrics such as activity, inflows, and volume. However, in a surprising turn of events, Friend.tech saw a sudden surge in total value locked (TVL), doubling to reach more than $20 million within just four days.
The platform, which had a buzzy beta version launch on Coinbase’s layer-2 Base, saw its fees surpass $1 million in 24 hours, outshining Uniswap and the Bitcoin network. However, these fees soon plummeted, and transactions declined by over 90%. This led critics to declare the platform ‘dead’.
Despite this, Friend.tech has witnessed a significant resurgence. The platform saw $12.3 million in daily trading volume, the third-highest ever. This revival has been attributed to multiple factors. One of the reasons could be the growing number of non-crypto figures that have joined the platform, including prominent YouTubers and OnlyFans creators.
How Friend.tech Went From a Promising Start to a Potential Exodus
However, this revitalization has not been without its perils. Some users reported being victims of SIM swap attacks, with attackers successfully draining thousands of dollars worth of tokens. This has raised concerns about the security measures in place on the platform.
Colin Wu, a respected industry analyst, has suggested that the recent activity on Friend.tech could indicate an exodus. Data from Dune Analytics reveals that Ethereum is being removed from the platform at a faster pace than it’s being generated, as keys are being redeemed more quickly than they’re being created.
On November 18th and 19th, the total trading volume of friend tech exceeded 10 million US dollars, which was the highest in more than half a month. This may be an exit behavior. A total of 4.42k ETH was withdrawn from friend tech in the two days over the weekend. Friend tech TVL…
— Wu Blockchain (@WuBlockchain) November 20, 2023
Over the weekend, the platform saw an outflow of over 5,000 ETH, marking the largest withdrawal since October 24, when 4,380 ETH was withdrawn in a single day. Furthermore, the total value locked in Friend.tech experienced a 21% decrease over the weekend, dropping to 17,100 ETH, equivalent to $33.6 million.
The future of Friend.tech remains uncertain. While some believe it will stick around until a potential token launch in the coming months, others are skeptical. The platform’s future will depend on its ability to reduce fees and increase creator revenue.