The tech circle has been in awe of the roaring success of friend.tech, which already boasts almost $20m in revenue since launching in August. Admirers and skeptics alike recognize it as the leading money-generating app on Base and amongst the top yielder in the broader cryptocurrency sphere. With a current annual revenue projection of $180 million, it’s clear that the platform’s model of levying around 10% on social token trading and splitting the earnings between the project and its users has yielded significant results.
Friend.tech’s unique selling proposition also adds to its allure; the platform has synergized social and financial interactions by allowing users to buy and sell “keys,” or influencers’ profile tokens, with ETH on Base’s Layer 2 network. This allows for privileged communication access to influencers, a novelty in the world of social interaction.
However, it isn’t all fireworks and applause for friend.tech. The issue of security has been a pesky fly in the ointment. The platform, despite its effort to stave off competition from clone applications, has seen its user base drop since late September.
More pressing are security concerns; a plight faced by decentralized finance (DeFi) platforms. Hackers have indeed exploited friend.tech’s vulnerability. A user reportedly lost $385,000 worth of digital assets to sim-swapping attacks in just 24 hours. A low hanging fruit, friend.tech has disclosed around $20 million of its total locked value ($50 million) at risk, assuming a third of their accounts are phone numbers connected—exposing them to sim-swaps.
Is this risk exposure a trade-off for innovation, or is it a ticking time-bomb waiting to explode? Manifold Trading, an industry-focused tool development company, has called into question friend.tech’s current system, warning that any rogue developer could potentially access private keys. The implication is rather disconcerting; the total value locked (TVL) is at risk.
There might be a silver lining to the stormy cloud that looms overhead. Manifold Trading suggests a security upgrade in the form of a two-factor authentication (2FA) to protect user accounts effectively. This may reassure users as 2FA has proven to be an effective measure against such attacks. Yet, whether friend.tech steps up on its security measures will determine its future and, indeed, the future of DeFi platforms on the whole. It’s a new day in the social tech space, but it seems old security issues are proving to be a resilient antagonist.
Source: Cryptonews
