Friend.tech Activity Crashes 94%, Is This The End?
August 28 2023 - 8:00AM
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Decentralized social networks have always faced significant
challenges to gain mainstream adoption. Such is the apparent case
of Friend.tech, a new decentralized app that enjoyed explosive
growth earlier this month. Just barely two weeks after its
launch, Friend.tech saw its trading fees grow to rival top
cryptocurrencies like Bitcoin and Tron. However, the euphoria is
starting to subside, as activity and trading fees on the social
media app have crashed by 94%. Friend.tech Records Massive
Fall In Trading Activity Friend.tech’s model had raised concerns
from some crypto investors, with some arguing about its long-term
viability. Their criticism has been proven to be accurate as the
situation at Friend.tech has started to deteriorate. Related
Reading: Shibarium Launch Proves Positive As Shiba Inu-Based BONE
Celebrates New Milestone Friend.tech allows users to buy and sell
shares of influential accounts and social media profiles, and the
platform reportedly registered over 35,000 and 4,400 ETH ($8.1
million) in trading volume in its first 24 hours. However,
data from Dune Analytics show that trading volume has fallen since
then, with less than $200,000 in fees generated in the past 24
hours. Trading activity has also been down from over 35,000 to less
than 6,000 users. This has been reflected in trading costs, as
revenue has decreased by more than 94% since the exchange first
opened its doors. Friendtech buyers and sellers tanking to 0 GG
Friendtech? pic.twitter.com/jmXKu41KDd — Boxmining (@boxmining)
August 28, 2023 Friend.tech’s business model relied heavily on
charging users a 10% fee for every buy and sell of shares.
Friend.tech surpassed Bitcoin in terms of trading fees, recording
almost $1.4 million in revenue during the height of the platform’s
trading activity. However, data from DeFiLlama shows that trading
fees are now at $160,000 in the past 24 hours. Friend tech is dead
because of greed and poor execution. We can see that after the
initial influencer pump volume has fallen off a cliff. Let’s dig
into how this failure came to be 👇🏾 pic.twitter.com/WDQncTQJ21 —
Lisandro (@TheRealLisandro) August 27, 2023 Friend.tech also
incorporates Maximal Extractable Value (MEV) bots, which are
automated trading bots designed to exploit rapid price movements.
Although these bots have generated over $2 million in profits, they
have been credited with discouraging content creators and users.
Related Reading: Base Chain TVL Surpasses Cardano As Interest
Swells The Plight Of Decentralized Social Media Platforms
Decentralized social media have been touted to be the future of the
internet. However, platforms have been faced with many challenges
and have struggled to gain a firm footing in the market. One of the
challenges is the expansion of the user base. Overcoming these
challenges will be key to disrupting the status quo and achieving
the promise of decentralized social media. At the time of
writing, Friend.tech has a TVL of $6.4 million and has generated
fees of over $7.8 million to date. But while Friend.tech is still
operating, critics have likened its imminent failure to the fall of
BitClout, another decentralized social media app. Total market cap
struggles at $1.026 trillion | Source: Crypto Total Market Cap on
Tradingview.com Featured image from BeInCrypto, chart from
Tradingview.com
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