Decentralized social media protocol Friend.Tech attracted attention last year, but has notably disappeared from view recently.
Encryption SlateDune Analytics data compiled using 21.co uncovered a worrying trend – the platform was unable to attract new users and the existing user base was indifferent. On January 28, only 19 new users of the platform participated in at least one transaction, in sharp contrast to the peak of more than 70,000 users in September.
Another dashboard from Cryptokoryo reveals the extent of the recession. On the same day, Friend.Tech’s trading volume was only 5,544, a 99% drop from peak trading volume of nearly 540,000.
DeFiLama data showed continued negative outflows during the month, exacerbating the downward spiral.
According to data, on January 16 alone, Friend.Tech saw positive dollar traffic, with $313,000 entering the platform. However, other days saw over $5 million in outflows, bringing the total value of assets locked on the platform down significantly to $30 million.
In addition, this decline is further reflected in the fees incurred by the network, which have plummeted from a daily average of nearly $1 million to just $50,000 in the past two days.
“Maximum low light”
There could be several reasons for Friend.Tech’s declining numbers. However, problems arose when multiple users suffered SIM swapping attacks due to lax security on the platform. Encryption Slate The report states that at least $20 million in assets of users of the platform are vulnerable to these attacks.
While we took quick steps to address the security issue, this incident reflects the challenges the platform faces in keeping up with bug fixes and enforcing basic policies for its rapidly expanding user base.
The platform’s viral success has also spawned imitators such as Avalanche and Stars Arena on other blockchain networks. The protocols also have struggled with adoption and usage, Dellama data shows.
Teng Yan, Delphi’s head of digital NFT research, called Friend.Tech’s setback the “biggest trough” of the past year. He emphasized the project’s potential to bring cryptocurrencies into the mainstream but criticized his team’s execution.
“[Friend.tech] Could have been a top consumer app that brought cryptocurrencies into the mainstream. An on-chain reputation layer built on top of the existing social graph. Great idea, but poor execution. ” Yan added.
friend.The viral growth of technology
Friend.Tech introduces an innovative way for users to monetize their popularity in the cryptocurrency space, allowing users to buy and sell “keys.” These keys enable buyers to send private messages to sellers.
As a result, several big names from the cryptocurrency world and the broader entertainment industry are using Friend.Tech to connect to their communities, and the platform is powering transactions on Base, the second layer network it is built on.
Despite initial success, the blockchain-based social network faced rapid decline, losing 95% of its activity within a month of launch. However, September saw a recovery, with daily trading volume approaching $10 million. At its peak, the protocol’s TVL exceeded 30,000 ETH ($50 million), surpassing giants such as Uniswap and the Bitcoin network in terms of costs incurred.
