The nascent decentralized network, Friend.tech, has been making quite a stir in the cryptosphere, but not for the reasons one might expect. Launched just over three weeks ago, the network is currently facing a significant slump, with its daily activity, inflows, and transaction volume taking a perilous dive. While such scenarios may be common in the volatile and unpredictable world of cryptocurrency, critics have been swift in pronouncing the platform ‘dead’.
Initially, Friend.tech launched with a significant buzz on Coinbase’s layer-2 Base on Aug. 11. In just a week after its launch, the platform’s fees skyrocketed, surpassing the $1 million mark in 24 hours, a feat that outshined both Uniswap and the Bitcoin network. However, the victory was short-lived as the platform’s daily fees plummeted from a peak of $1.7 million to around $215,000, a decrease of over 87%.
Apart from the precipitous dip in fees, the number of transactions on Friend.tech also plummeted over 90%, from a peak of nearly 525,000 to just over 51,000 transactions, as data compiled by Crypto Koryo exhibited. These drastic declines have led to a wave of eulogized posts on social media networks about the platform.
It can be argued that Friend.tech’s unique approach to social interaction, facilitating the buying and selling “keys” for users to send private messages, possibly invited the attention of crypto and non-crypto influencers. However, this mechanism also invited criticism. The platform’s seemingly tremendous rate of capitalization, coupled with questions regarding the sustainability of such a model, sparked skepticism amongst critics.
In the wake of the recent downturn in Friend.tech’s transactions, the number of buyers and sellers have followed suit, with numbers falling from an Aug. 21 peak of over 58,000 buyers and 27,000 sellers to approximately 10,000 buyers and 7,800 sellers as of Aug. 27. Furthermore, the protocol inflows experienced a considerable slump, dropping from an Aug. 21 high of $16.8 million to roughly $1.6 million, marking a nearly 90.5% decrease.
The current drop in activity and fee may pose a challenge to the future Friend.tech’s development. Critics juxtaposed Friend.tech with the 2021 DeSo app BitClout and hypothesized a similar fateful collapse, stating that the platform cannot maintain its high user key prices and drawing attention to the questionable value of private chat access.
As such, despite its initial meteoric rise, Friend.tech’s subsequent plummet raises vital questions about the sustainability of such accelerated growth and if the platform lacks in novel factors that can attract and retain the crypto-community. Until the platform curtails its evident issues, it remains uncertain whether this rapid descent signifies an irreversible fate or merely a tempestuous introduction to the volatile crypto-market.
Source: Cointelegraph
