The emerging crypto frontier experienced a ripple when Friend.tech, the fledgling social app for web3, met a rocky reception upon launch. The blockchain-based platform built to allow users to trade cryptos linked to their cherished Twitter influencers was hailed as the innovation of the moment. Yet, speculators were quick to consign it to crypto oblivion, pointing to the precipitous decline in its inflows and volumes. This platform, an exciting fusion of social media and the decentralized world, sprang onto Coinbase’s layer-2 Base blockchain promising new levels of interactive experiences. Suddenly, a stumble.
As the curtain was lifted on Friend.tech, the numbers told a compelling story of instant popularity. The platform’s revenue, fees, and activity shot through the roof, jeopardizing established players like Arbitrum and Optimism. On August 19, the innovative DeSo network managed a whopping $1 million in 24-hour fees. However, the firmament felt like it was collapsing when a severe privacy breach turned all the admirations and applauds into skepticism and withdrawal. No wonder the platform’s $1.7 million peak in daily fees nosedived to roughly $215,000 in just five days.
And herein lies the rub. Criticisms around the platform’s failure were tie them to flawed strategies and apparent greed. According to Lisandro Rodriguez, a payment risk manager at Coinbase, a key role in Friend.tech’s demise was played by an unsuccessful scaling strategy coupled. He also criticizes the platform for being too restrictive, denying access to certain users.
Yet, Friend.tech’s downfall isn’t entirely unprecedented. BitClout, a similar platform that pioneered the tokenization of notable crypto personalities, ran aground over similar challenges. Born of the high-profile support of Andreessen Horowitz and Sequoia, Bitclout too had to confront a torrent of backlash and legal quagmires. Ryan Wyatt, ex-president of Polygon Labs, was rather harsh with his assessment, describing such platforms as inadvertent Ponzi schemes.
Those are sobering words that underline the risks of navigating untested waters. Promises of ultra-modern platforms interfacing with the blockchain world seem intoxicating. Yet, as the Friend.tech experience illustrates, the heady days of a buoyant launch can quickly yield to harsh scrutiny and volatile market dynamics. With all the dust settled, perhaps the cautionary tale here is to pace our optimistic projections for these embryonic block-tech platforms.
Source: Cryptonews
