Coinspeaker Friend.tech Plummets 25%, Reaches All-Time Low after Declaring It Will Stay on Base L2
Friend.tech, a decentralized social media platform on Coinbase-incubated layer 2 network Base, has decided to retract its earlier plan to migrate to its independent blockchain. This decision marks a significant reversal from their initial announcement and has had a notable impact on the platform’s native token FRIEND.
Impact on FRIEND Token Price
The value of FRIEND experienced a sharp decline, hitting an all-time low of $0.2973 on Thursday morning, as reported by CoinGecko. Currently, the token is trading at $0.3521, reflecting a 25% decline from the previous day’s value. This current price stands at less than half of its value on June 10, when Friend.tech initially disclosed its intention to depart from Base in favor of launching Friendchain.
The announcement to migrate to Friendchain ignited widespread community debate. Users debated on the necessity and advantages of a blockchain tailored for social media. Some users voiced concerns about the possibility of higher transaction fees on Friendchain compared to the economical solutions provided by Base, an Ethereum layer 2 platform.
The market responded with volatility to the initial announcement. After the news broke, the FRIEND token soared 64% in just 20 minutes, reaching a high of $1.31 before settling back down to $0.89. On that same day, Friend.tech experienced a record number of transactions, a significant uptick after a period of stagnation since its strong launch in August 2023.
Late Wednesday night, Friend.tech announced on X that the $FRIEND token is intended to remain a community-controlled asset, essential to the Clubs contract. The project emphasized that moving the supply and liquidity would contradict this principle. They assured users that they can continue to create clubs, chat, buy keys, and use $FRIEND on Base within the Friend.tech app.
We’ve heard your feedback: you don’t want $FRIEND moving to another chain. We agree. $FRIEND was always meant to be a 100% community-controlled token powering the Clubs contract. Migrating the supply and liquidity would not align with that spirit. You'll still be able to create…
— friend.tech (@friendtech) July 3, 2024
The community is closely monitoring how the price dynamics will unfold following this new decision.
About Friend.tech
Friend.tech is a blockchain-based social platform built on Base layer-2 network. The platform stands out with its unique features aimed at enhancing user engagement and monetization opportunities. At its core, Friend.tech offers token-gated chats using tradable tokens known as ‘keys’, enabling users to access exclusive content and potentially profit from content creators’ popularity.
The platform features a Progressive Web App (PWA), integrated wallet capabilities, and employs a bonding curve mechanism to determine key prices. Friend.tech sprung into popularity shortly after launch. It managed to surpass $1 million in transaction fees within 24 hours on August 19, outperforming established platforms like Uniswap and Bitcoin.
However, concerns linger regarding Friend.tech’s long-term viability. Critics argue that its emphasis on key trading and speculative value may prioritize short-term engagement over sustainable user relationships. In addition, Friend.tech faces stiff competition from platforms like Stars Arena, fan.tech, post.tech, and New Bitcoin City, which offer additional features such as tipping, fractional shares, post-trading, and dynamic fees.
Despite the growing competition, interest in the platform remains high, with its current market cap exceeding $30 million and a robust 24-hour trading volume of over $2 million.
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Friend.tech Plummets 25%, Reaches All-Time Low after Declaring It Will Stay on Base L2