Friend.Tech, a decentralized social media protocol, gained attention last year but has noticeably fallen off the radar recently.
CryptoSlateused Dune Analytics data compiled by 21.co and discovered a worrying trend: the platform’s failure to attract new users and apathy towards its existing user base. On January 28, the platform had just 19 new users who had engaged in at least one transaction, a stark contrast to its peak of over 70,000 users in September.
Cryptokoryo’s separate dashboard highlights the extent of the recession. On the same day, Friend.Tech recorded only 5,544 transactions, representing a stunning 99% decline from its peak volume of nearly 540,000.
In addition to the decline, DeFillama’s data shows consistent negative outflows throughout this month.
Data shows that Friend.Tech experienced positive USD flows with $313,000 flowing into the platform on January 16 alone. However, on other days, more than $5 million was leaked, bringing the total value of assets locked on the platform down significantly to $30 million.
Moreover, this decline is also reflected in the fees generated by the network, which have plummeted from an average of nearly $1 million per day to just $50,000 over the past two days.
‘The greatest low light’
There could be a number of reasons for Friend.Tech’s declining numbers. However, problems began when several users suffered SIM-SWAP attacks due to poor security on the platform. CryptoSlate Users of the platform reported that at least $20 million in assets were vulnerable to these attacks.
Although efforts were made quickly to address the security issues, the incident reflected the platform’s challenges in keeping pace with bug fixes and implementing required policies for its rapidly expanding user base.
The platform’s viral success has spawned imitators like Stars Arena on other blockchain networks, including Avalanche. DeFillama data shows that these protocols are also struggling with adoption and use.
Teng Yan, head of NFT research at Delphi Digital, called Friend.Tech’s setback the “biggest recession” of last year. He highlighted the project’s potential to take cryptocurrency mainstream, but criticized the team’s execution.
“(Friend.tech) could have been the best consumer app to bring cryptocurrency to the mainstream. An on-chain reputation layer built on top of an existing social graph. It’s a good idea, but the execution is poor,” Yan added.
friend. Viral growth of technology
Friend.Tech has introduced an innovative way for users to monetize their popularity in the cryptocurrency space, allowing users to buy and sell “keys”. This key allowed buyers to send private messages to sellers.
As a result, several high-profile figures from the cryptocurrency world and the broader entertainment industry have used Friend.Tech to connect to their communities, with the platform driving transactions on Base, the layer 2 network on which it is based.
Despite this initial success, the blockchain-based social network faced rapid decline, losing 95% of its activity within a month of launch. However, there was a resurgence in September with daily trading volume approaching $10 million. At its peak, the protocol boasted a TVL exceeding 30,000 ETH ($50 million), surpassing giants such as Uniswap and the Bitcoin Network in terms of fee generation.