From Paradigm investment to Soft Rug, a record of Friend.Tech’s exciting year | Web3 autopsy report

In the ever-evolving landscape of cryptocurrency and blockchain technology, few stories capture the essence of innovation, hype, and volatility quite like that of Friend.Tech. This decentralized social media platform burst onto the scene with unprecedented enthusiasm, only to fizzle out just as dramatically. As we dissect the journey of Friend.Tech, we uncover valuable lessons about the nature of crypto projects, user adoption, and the challenges of sustaining momentum in this fast-paced digital frontier.

The Meteoric Rise

A Promising Launch

On August 10, 2023, an anonymous developer known only as “Racer” unveiled Friend.Tech to the world. Launched on the Base network, the platform immediately caught the attention of crypto enthusiasts and social media aficionados alike. The concept was simple yet revolutionary: a decentralized social app that allowed users to buy and sell “keys” to access exclusive content from creators.

The response was nothing short of phenomenal. On its very first day, Friend.Tech boasted an impressive 136,000 daily active users. This explosive growth was a clear indicator of the pent-up demand for innovative social platforms in the Web3 space.

Early Successes and Milestones

Friend.Tech’s rapid ascent continued in the days and weeks following its launch. Here are some of the key milestones that marked its early success:

1. Airdrop Announcement (August 15, 2023): The platform shrewdly announced plans to airdrop bonus points to early adopters, setting the stage for future token distribution and incentivizing user engagement.
2. Seed Funding (August 19, 2023): In a vote of confidence from the crypto investment community, Friend.Tech secured seed funding with participation from the prestigious Paradigm venture capital firm.
3. Revenue Milestone (August 21, 2023): Just 10 days after launch, the platform’s revenue surpassed 1,000 ETH (Ethereum), reaching an impressive 1,165.2 ETH. The total transaction volume hit 25,633.5 ETH, with a user market cap of 10,663.3 ETH.
4. Fee Generation (August 21, 2023): Friend.Tech generated $1.12 million in protocol fees within a 24-hour period, outperforming established platforms like Uniswap and even the Bitcoin network. Only Ethereum and Lido protocols surpassed it during this time.
5. User Engagement (August 30, 2023): The platform disclosed impressive user statistics, reporting that about 20,000 key holders were actively engaging with the platform daily. The retention rates were equally impressive, with over 75% next-day retention and over 50% weekly retention. Active users spent an average of more than 30 minutes per day on the platform.
6. TVL Milestone (September 8, 2023): Friend.Tech’s Total Value Locked (TVL) exceeded $10 million, reaching $10.35 million and setting a new record since its August launch.
7. Transaction Volume (September 14, 2023): The platform’s cumulative transaction count reached 4,597,737, with a single-day record of 538,000 transactions and a transaction volume of approximately 12,390 ETH (about $20.07 million).

These early successes painted a picture of a platform that was not just gaining traction but potentially revolutionizing the intersection of social media and cryptocurrency.

The Plateau and Early Signs of Trouble

Despite its impressive start, Friend.Tech began to show signs of slowing down as early as September 2023. The daily trading volume, which had peaked at $16 million on August 21, plummeted to around $700,000 by September 1 — a staggering 95% decrease.

This sharp decline raised eyebrows in the crypto community. Was this merely a natural correction after the initial hype, or were there underlying issues with the platform’s model and sustainability?

Attempts at Revitalization

The Friend.Tech team didn’t rest on their laurels. They made several moves to maintain momentum and address user concerns:

1. Web Version Launch (September 21, 2023): To increase accessibility, Friend.Tech introduced a browser-based version of the platform.
2. V2 Teaser (February 2024): After a period of relative quiet, the team began to hint at a major update, dubbed “V2,” to reinvigorate interest.
3. Data Repair and Snapshot (April 27, 2024): The team announced the completion of data repairs and snapshots, locking in users’ point balances in preparation for future developments.
4. FRIEND Token Launch (May 3, 2024): Friend.Tech opened claims for its native token, FRIEND, which initially traded at $3.34.
5. V2 Release (May 4, 2024): The long-awaited V2 update was finally released, bringing new features and improvements to the platform.

These efforts seemed to bear fruit, at least initially. By May 18, 2024, Dune data showed that since the V2 release, the number of clubs on the platform had reached 225,088, with a total transaction volume of 27,670,735 FRIEND tokens.

The Unraveling

Despite these attempts at revitalization, Friend.Tech’s troubles were far from over. A series of events and decisions in the following months would ultimately lead to the platform’s demise:

1. Relationship Strain with Base

On May 27, 2024, Racer, the co-founder of Friend.Tech, expressed intentions to migrate the platform away from the Base network. This announcement came as a shock to many, as it revealed underlying tensions between Friend.Tech and its foundational blockchain.

Jesse Pollak, the head of Base at Coinbase, acknowledged that the Friend.Tech team felt “isolated and disconnected” from Base and parts of the Ethereum ecosystem. This public airing of grievances hinted at deeper issues within the project’s technical and community relationships.

2. The Friend Chain Saga

In June 2024, Friend.Tech announced plans to launch “Friend Chain,” a social-specific blockchain based on Base, in collaboration with Conduit. The native gas token for this new chain was to be FRIEND. However, in a surprising turn of events, Friend.Tech quickly deleted the announcement tweet and abandoned the Friend Chain vision, citing community feedback as the reason for not migrating FRIEND to other chains.

This rapid about-face raised questions about the project’s direction and decision-making processes. It also highlighted the challenges of balancing innovation with community expectations in the decentralized space.

3. Dwindling User Base

By July 2024, Friend.Tech’s user engagement had hit rock bottom. On July 9, the platform recorded only 5 independent buyers and 10 independent sellers, with daily active users reaching an all-time low. This dramatic decrease in activity was a far cry from the platform’s early days of hundreds of thousands of engaged users.

4. Team Withdrawals and Reduced Communication

Throughout this period, there were concerning signs of the team distancing themselves from the project:

• In December 2023, the protocol fee receiving address transferred 7,821 ETH (approximately $16.94 million) to Coinbase.
• On June 11, 2024, Friend.Tech’s multi-signature address transferred another 2,809 ETH (worth $10.11 million) to Coinbase.
• The official Twitter account’s activity dwindled to near-silence, with only perfunctory daily posts listing the top five popular clubs.

These actions suggested that the team might be preparing for an exit, rather than actively working on improving and growing the platform.

The Final Chapter

On September 8, 2024, exactly one year and 28 days after its launch, Friend.Tech made an announcement that effectively signaled the end of the project. The developers had relinquished control of the smart contract, transferring ownership to an empty Ethereum address (0x000…000).

This action locked the current system, preventing any further changes or upgrades. While the platform technically continues to operate, the absence of active management means that no new features can be introduced, and no interested parties can take over the project to breathe new life into it.

In its final state, Friend.Tech had generated approximately $89.29 million in total fee income since its launch. Of this, $44.67 million was allocated to creators, with the remainder belonging to the Friend.Tech team.

Lessons Learned

The rise and fall of Friend.Tech offers several valuable lessons for the crypto and social media industries:

1. Hype vs. Sustainability: Explosive initial growth doesn’t guarantee long-term success. Projects need to focus on building sustainable user engagement beyond the initial excitement.
2. Transparency and Communication: Regular, honest communication with the community is crucial, especially during challenging times. Friend.Tech’s periods of silence likely contributed to user distrust and disengagement.
3. Adaptability and Vision: While it’s important to listen to community feedback, projects also need a clear, consistent vision. Friend.Tech’s rapid pivots and abandoned plans (like Friend Chain) may have confused and alienated users.
4. Ecosystem Relationships: The strained relationship with Base highlights the importance of maintaining strong partnerships within the blockchain ecosystem.
5. Token Economics: The introduction of the FRIEND token and subsequent issues underscore the need for well-thought-out tokenomics from the outset.
6. Exit Strategy: The team’s apparent gradual exit, marked by large fund transfers to exchanges, raises questions about responsible project management and the duty of care to users and investors.

Conclusion

Friend.Tech’s journey from a promising innovator to a cautionary tale happened in just over a year — a testament to the breakneck pace of the crypto world. While the platform introduced novel concepts and achieved remarkable early success, its inability to sustain growth and navigate challenges ultimately led to its downfall.

As the dust settles on the Friend.Tech experiment, the broader crypto and social media communities are left to reflect on its legacy. The project’s rise and fall serve as a stark reminder of the volatility and unpredictability inherent in the world of decentralized applications.

For future projects in this space, the story of Friend.Tech offers both inspiration and warning. It demonstrates the immense potential for innovation in decentralized social media while also highlighting the pitfalls that can derail even the most promising ventures.

As we move forward, the lessons learned from Friend.Tech will undoubtedly shape the development of the next generation of Web3 social platforms. The challenge remains: how can we harness the excitement and innovation of decentralized technology while building sustainable, user-centric platforms that stand the test of time?

Only time will tell, but one thing is certain — the story of Friend.Tech will be remembered as a defining chapter in the early history of decentralized social media.