Friend.tech Relinquishes Control Over Smart Contracts
The creators of Friend.tech, a cryptocurrency-fueled social network, have relinquished control over the platform’s smart contracts, signaling an end to development work just four months after its token launched. Built on the Ethereum layer-2 network Base, Friend.tech burst onto the scene in August last year, allowing users to buy and sell “keys” linked to Twitter (X) accounts. These keys grant access to private group chats within the Friend.tech app.
The project announced that "admin and ownership parameters" have been set to an address commonly used to burn (or permanently destroy) tokens. This strategic move aims to prevent future changes to the platform’s "fees or functionality."
Financial Performance and Fees
Since its inception, Friend.tech's protocol has generated $22 million in fees. Initially, a 10% fee was charged on transactions, split evenly between Friend.tech and the account owner whose key was sold. The recent update has set admin and ownership parameters to 0x000…000, effectively freezing fees and functionality. Friend.tech clarified that “no fees from either smart contracts or Friend.tech” currently benefit the project’s development team.
The total earnings of Friend.tech remain somewhat unclear, with DefiLlama estimating the figure at $63 million. However, the allocation of these funds remains undisclosed, leaving users seeking clarity on the platform’s future. Currently, the wallet associated with Friend.tech’s development team holds approximately $193,000 in various tokens. Over eight months, this wallet has deposited $36 million worth of Ethereum to crypto exchange Coinbase. Other wallets linked to the platform have also made significant deposits to Coinbase.
Platform's Decline and Key Figures
Despite the announcement suggesting an end to Friend.tech's development, the Web3 social network will "continue to function as-is." During its peak, the platform attracted notable crypto influencers, including pseudonymous meme coin trader Ansem and Su Zhu, co-founder of bankrupt crypto hedge fund Three Arrows Capital. Friend.tech had 905,000 accounts creating keys.
However, a dramatic decline in user activity has been observed. From a peak of 500,000 daily transactions, numbers have plummeted to below 200. The Twitter account of one of the project’s pseudonymous co-founders, Racer, has been deleted or taken offline, while another co-founder, Shrimp, has made his account private.
Market Impact and SocialFi
As Friend.tech's activity dwindled, so did the value of the FRIEND token. Initially launched in May, the token peaked above $3 but has since plummeted 97% to $0.07. Despite driving user activity on Base, expansion beyond the Coinbase-incubated network was never realized. Friend.tech abandoned plans to launch its own Ethereum scaling network.
In its early days, Friend.tech raised an undisclosed amount of seed funding led by venture capital firm Paradigm. The project’s initial success contributed to the emergence of SocialFi as a term for similar crypto initiatives. Prior to Friend.tech, the pseudonymous co-founders launched Stealcam, a decentralized media distribution platform incentivizing users to buy JPEGs to reveal hidden content.
Although Friend.tech's future remains uncertain, recent announcements have slightly boosted activity. The platform recorded 18 users purchasing keys, while 192 sought to sell them.
