According to CryptoPotato, Friend.tech's Total Value Locked (TVL) has recently experienced a significant decline, with its largest single-day drop of 7.8% occurring in early October. This downturn in performance has been accompanied by a substantial redemption of keys on the platform, as well as ongoing sim swap attacks casting a shadow over the network.
Data and research analyst Tom Wan revealed the massive drop in the network's TVL on Dune Analytics. On October 4, the network experienced its largest single-day drop in TVL, losing about 2.3K Ethereum. DefiLlama stats show that the Base-based platform's TVL declined from 29.19K ETH to 27.14K ETH on October 4, and by early October 6, it had fallen to 26.48K ETH.
Despite the decrease in TVL, idle capital remained steady at 10.34K ETH (approximately $17M) on October 4, as the redeemed keys were fully withdrawn from the network. Reports suggest that the amount of dry powder did not drop, indicating that users could potentially reenter the market at any time.
Tom Wan's thread also highlighted key redemption statistics, with September 14 marking the peak, as 6.7K ETH worth of keys were redeemed. On October 4, key redemptions surged to a new high of approximately 2.1K ETH, valued at $3.5 million. Users who redeemed their keys on October 4 chose to withdraw the funds from their accounts, resulting in no increase in idle capital within the network.
One of the biggest key holders, Chang, has been among those redeeming keys. Reports state that the player offloaded 43 of his keys, making profits of about 140 ETH ($232K). This offloading led to a significant price decline in the key, dropping from 3.89 ETH per key to 2.64 ETH.
The recent and ongoing sim swap problem is reportedly to blame for the sudden decrease in TVL. Reports indicate that a scammer could make $387K in Ethereum through sim swap attacks on the network's users. In response to numerous complaints, Friend.tech upgraded its system to include login removal options. However, Tom Wan believes that the recent withdrawals and TVL drops are primarily due to the sim swap attacks.