Friend.Tech team has burned its smart contracts to relinquish control. Photo by Guido Jansen on Unsplash
- friend.tech’s admin team has attempted to quell concerns about the project being rugged.
- The team claimed the platform’s smart contracts were locked to prevent changes.
- friend.tech’s token, FRIEND, dropped over 36% in the first 24 hours following the announcement.
friend.tech has attempted to quell users’ concerns of a rug pull following its surprise announcement that it was transferring the ownership of its smart contracts to Ethereum’s void only a year after launch.
The drastic move, which permanently removes control from its team, comes after months of stagnant growth on the platform.
friend.tech Attempts to Quell Concerns
In an X post on Monday, Sept. 9, the platform told users that it had “no plans to shutter or discontinue” the friend.tech web app.
Sending smart contracts to the null address, friend.tech states is to “guarantee that no future changes can be made to smart contracts deployed on Base which would raise or create new fees.”
“These actions do not affect the current functionality of the friend.tech web app in any way. Everything you know and use remains the same,” it added.
The post was met with a widely negative reception, with many users accusing the platform of rugging the project.
FRIEND Shoots Up
Following friend.tech’s update, the platform’s FRIEND token, saw an increase of around 58% from $0.074 to $0.098 in the first few hours after the post, according to CoinGecko.
However, the last 24 hours have shown a 17% drop back to $0.078, as the token continues to fluctuate amid unsettling times for the platform.
In the first 24 hours following the initial announcement, FRIEND dropped over 36% to $0.061.
Just days after its launch in August 2023, the FRIEND token reached a market cap of $233.6 million.
However, the market cap has since crashed to $7.4 million at the time of reporting.
friend.tech Sent to Slaughter
On Sept. 8, the friend.tech team transferred control of their smart contracts to Ethereum’s null address , a known burn address.
Once transferred to the burn address, tokens cannot be recovered, effectively destroying everything sent there.
Although friend.tech will continue to operate, the team has given up its option to make any new updates or bug fixes.
The Rise and Fall of friend.tech
friend.tech was one of the most talked about launches in the crypto space last year.
The blockchain-based platform enables users to purchase and trade digital tokens closely associated with an X, formerly Twitter, influencer.
Users can purchase a “key” from their preferred influencers to access the benefits associated with that account—whether it be private chats, giveaways, or advice.
The value of each key depends on its creator’s influence, reach, and demand—the more people holding a key, the more expensive it will be.
Just a month after its August 2023 launch, the decentralized Web3 social networking platform was processing around $10 million in daily trade volume.
The platform attracted crypto enthusiasts and non-crypto influencers, including YouTuber Faze Banks and Russian protest group Pussy Riot.
However, the platform could not keep its momentum for very long. In December, the platform’s revenue was just around $1 million, a 90% fall from its September highs.
Shortly after launch, the platform’s privacy was called into question when an anonymous contributor to Yearn Finance shared a leaked database of over 100,000 wallet addresses connected to friend.tech.
The leaked database also revealed how users had given friend.tech permission to post as them on X.
Although the platform continued for a whole year after the leak, many believe it dampened its initial hype and success.
friend.tech Inspired a Wave of SocialFi
When friend.tech launched to great success, it inspired a wave of new SocialFi platforms to launch across the industry.
SocialFi platforms, a blend of social media and finance, aim to aid the monetization of engagements – such as exchanging currency for advice.
Unlike traditional social media platforms, such as Facebook and X, which companies centrally control, SocialFi platforms are decentralized. Users own and control their data, content, and interactions.
Despite promising beginnings, however, SocialFi usage has arguably slowed down. Outside of friend.tech, other Web3 social media platforms are hemorrhaging users and struggling.
BitClout, launched in 2021 to mix of “speculation and social media,” faced controversy from the beginning due to accounts being created on the platform without users’ consent.
At the end of July this year, BitClout’s founder, Nader Al-Naji, was charged by the US Securities and Exchange Commission (SEC) with selling unregistered securities and wire fraud.
Farcaster, another Web3 social media network, has seen its daily active users fall to 43,000 from a peak of 104,000 in July, according to Dune Analytics .
However, as traditional social media platforms such as X face increased regulatory scrutiny and interest in Web3 continues to grow—a potential market for SocialFi platforms to thrive could be around the corner.
X Braces for Possible Boot From Brazil as Supreme Court Dispute Intensifies
