- friend.tech is witnessing a decline in activity.
- The decline has sparked speculation of the project’s end.
- The project is plagued by privacy and regulatory concerns.
Launched on the Coinbase incubated Base network in August, friend.tech has been hailed as the next crypto sensation amid an extended bear market.
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In just over two weeks, the Web3 social media platform, which allows users to tokenize their Twitter accounts, has attracted over 125,000 users and generated nearly $8 million in fees. However, recent data suggests the platform’s growth is cratering amid growing privacy and legal concerns.
The End of friend.tech?
Activity on friend.tech is in a broad decline. At the time of writing, on Monday, August 28, data from 21.co’s Dune Analytics dashboard reveals that friend.tech has generated a trading volume of over $620,000 from about 4,150 traders. The data represents a 96% decline in trading volume over the past seven days, when it peaked at $16.88 million. Similarly, the number of traders has also tanked by 88% within the period.
Source: Dune
The data further reveals that transactions related to friend.tech have dropped 91% from over 216,000 on August 21 to about 18,850 at the time of writing on August 28. Fees generated by the platform have also plummeted 96% from $1.7 million to $62,000 within the period.
Amid the steep decline in several key metrics, many are now declaring the Base sensation “dead,” including a risk manager at Coinbase.
While this appears to be the leading narrative at the moment, speculations of an airdrop could give the platform a new lease on life, though some analysts maintain that this will be short-lived.
Privacy and Legal Concerns
In the past week, friend.tech has been embroiled in several controversies. The project recently drew Arkham comparisons after a database linking Ethereum addresses to user Twitter accounts made its way to social media, with the apparent data leak strengthening concerns over its lack of privacy policy.
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At the same time, there has been serious debate that the platform may enable the trading of unregistered securities. Seedstarter founder and lawyer Jesse Hynes opined that in such an outcome, users who created accounts on friend.tech, allowing for trading their “Keys” could get caught up in the ensuing legal battle.
On the Flipside
- The friend.tech platform is still young and could change rapidly.
- TweetDAO, a previous project from friend.tech founders, faded into obscurity months after its launch.
Why This Matters
friend.tech has been a primary driver of activity on Base. The decline of activity on the project will likely have spillover effects on the Layer 2 network that has taken the Ethereum ecosystem by storm.
Read this to learn more about the friend.tech project:
Friend.tech: How Much Crypto Is Your Friendship Worth?
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