friend.tech gives up control of smart contracts, soft Rug?

Written by Karen, Foreisight News

The glory of the past reflects the desolation of the present. The rise and fall of friend.tech is like a dramatic reversal, which makes people sigh.

On September 8th, Beijing time, friend.tech’s official Twitter account released a meaningful announcement, setting its management and ownership parameters to 0x000...000, nominally to prevent any future changes to its fees or functions, but in fact it was a complete release of control over the smart contract. Some community users interpreted this as the stagnation and end of project development.

Although friend.tech tried to calm market sentiment, emphasizing that this change would not affect the normal operation of the Web client and that the development team would not extract any fees from the smart contract or platform, comments such as "friend.tech is dead" and "soft rug" spread on social media, revealing users' concerns and disappointment about the future of friend.tech.

It is particularly noteworthy that since August, the content of friend.tech’s official Twitter has become extremely monotonous and mechanical, with only the five most popular Clubs information released every day, and no other fresh content or interaction. This change not only makes people feel the fatigue and powerlessness of the project team, but it may also be a precursor to the friend.tech team’s inner struggle and determination to finally give up control of the smart contract.

The former leader is now lonely

Looking back, friend.tech's rise was once so glorious. At first, thanks to the support of Paradigm, the active participation of heavyweight KOLs, the hard-to-find design, the potential airdrop expectations, and the novel gameplay of monetizing KOL value and IP, friend.tech achieved a remarkable achievement from 0 to more than 100,000 users in just two weeks, with a total of more than 910,000 users.

However, times have changed, and friend.tech is no longer as prosperous as it once was. The number of daily active users has dropped to single and double digits in the past two months, and Key's daily trading volume has also dropped from a high of $20 million in the past to a few thousand dollars today. The once prosperous scene seems to have vanished in a few months.

What is even more regrettable is that the price of FRIEND tokens has also experienced a cliff-like decline. From a high of nearly $3 in May this year to the current $0.06, it has fallen by more than 98%, and its market value is only $5 million. Huang Licheng once spent a huge amount of money to buy FRIEND tokens, but now he is facing huge floating losses. The FRIEND he bought for $15.6 million is now only worth $570,000, with a floating loss of at least $15 million. This has also become a microcosm of the decline of friend.tech.

Looking back at the development of friend.tech, the uncertainty of internal and external cooperation also laid the groundwork for its decline. From the subtle changes in the relationship with Base to the abortion of the Friendchain vision, to the final decision to abandon the migration of FRIEND tokens to other chains, friend.tech's strategic vacillation further exacerbated its predicament.

At the end of May, friend.tech co-founder Racer hinted that the team’s relationship with Base was unstable and intended to migrate out of the protocol. In June, friend.tech immediately announced that it would cooperate with Conduit to develop a social chain based on Base, Friendchain, with the Gas token being FRIEND. Afterwards, friend.tech deleted this tweet, abandoned the Friendchain vision, and decided not to migrate FRIEND to other chains in accordance with community feedback.

At the same time, friend.tech closed all protocol fees for BunnySwap (built-in Swap), Clubs, and v1 smart contracts, and 100% of the fees will be attributed to traders, liquidity providers, and Club Chairs in the community. Previously, in friend.tech V1, a 10% fee was charged for each transaction, half of which was protocol income.

DefiLlama data shows that as of today, friend.tech has generated a total of $63.38 million in expenses and $31.66 million in revenue. As shown in the figure below, friend.tech had a record of more than $1 million in daily expenses during its heyday in October last year. After the release of V2, friend.tech's fee growth has basically stagnated, with daily fees of only a few hundred dollars in the past month.

Source: DefiLlama

Why is friend.tech silent?

The ups and downs of friend.tech are like a mirror, reflecting that while Web3 social networking is pursuing rapid expansion, it also needs to be wary of bubble risks.

There are many complex reasons behind the silence of friend.tech. The first is the high speculation contained in its products, which has attracted a large number of investors pursuing short-term interests to a certain extent, but it is difficult to build a solid long-term user base, making it difficult to maintain user loyalty. Secondly, in the process of exploring market positioning, friend.tech seems to have failed to accurately find the market segment that matches its core values, resulting in a disconnect between the product and user needs. In addition, the previous excessive PUA strategy has also damaged the reputation of friend.tech to a certain extent, greatly reducing the trust of users in it. In terms of team building and external cooperation, friend.tech also faces many uncertainties, which not only affects the execution efficiency of the project, but also exacerbates the market's concerns about the prospects of the project. More importantly, friend.tech's frequent vacillations at the strategic level have led to frequent adjustments in the direction of the project, making it difficult to form effective market influence and user stickiness.

Where is Web3 social?

On the other hand, Farcaster, the leading project in the Web3 social field, has also recently encountered the dual dilemma of user growth and platform activity. Farcaster's daily posts and interactions once exceeded 140,000 in the middle of the year. This good momentum has slowed down significantly in the past month, and DAU has fallen to about 100,000, marking the end of Farcaster's growth momentum. weaken.

Source: Dune (@pixelhack)

What's more serious is that Farcaster has also encountered bottlenecks in user acquisition. Since the beginning of February, Farcaster's daily new user growth has dropped sharply from 15,366 at its peak to an average of 500 to 600 per day in the past two weeks. This change in numbers not only reveals the sharp decline in the attractiveness of new users, but also reflects the severe test the platform faces in maintaining user growth momentum. In addition, Meme in the Farcaster ecosystem has also suffered a heavy blow. Among them, Degen has fallen by more than 95% in value since it hit an all-time high at the end of May.

Source: Dune (@filarm)

These data not only reveal the shaken market confidence, but also indicate that the Farcaster ecosystem is experiencing unprecedented pressure and adjustment period.

On the other hand, Telegram has a more obvious advantage in the Web3 social field through the coordinated development with the TON ecosystem and the explosion of mini-program games. If Web3 native social projects want to expand on a large scale, they need to pay more attention to accurate positioning, reducing the cost of migrating from Web2 to Web3 social, optimizing user experience, and enhancing user experience and trust building.