- Friend.tech has closed its doors.
- The creators of the project have revoked their ability to make changes to it.
- They still walked away with $44 million generated by the protocol through fees.
Friend.tech, the crypto social network built on Coinbase’s Base blockchain, is shutting down.
The closing leaves investors in the lurch, but the project’s creators walk away with some $44 million.
Since its launch just over a year ago, friend.tech has generated nearly $90 million in commissions, according to data compiled by 21.co. Half of those commissions went to the project’s development team.
Investors weren’t so lucky: the FRIEND token has fallen 98% since its launch in May. It dropped another 21% after the government shutdown was announced, before recovering partially.
Friend.tech is a blockchain-based social network that allows users to invest in influencers by purchasing keys, tokens that grant access to exclusive chat rooms.
On Monday, friend.tech announced that it had transferred the administration and ownership rights to the code that supports the protocol to a null address.
Simply put, even though the friend.tech protocol still exists, the project’s creators have irrevocably revoked the ability to make changes to it – or charge fees.
The situation highlights the fickle nature of crypto applications and their users, as well as the risks associated with investing in such projects.
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Investors caught off guard
The disappearance of Friend.tech is not entirely unexpected.
The project, which at one point accounted for more than half of all Base network activity, has struggled in recent months.
In May, friend.tech launched a new version of the app, accompanied by a much-anticipated token airdrop to early adopters. This did little to reinvigorate the project, which continued to lose users.
Deposits are now down 92% from their peak in October 2023, according to data from DefiLlama.
The number of new daily users has dropped to single digits, and daily fees, which once reached $2 million, are now less than $100.
Many hoped that friend.tech would become a revolutionary app and spark a new wave of crypto adoption.
Venture capital firms Paradigm and Notation Capital invested in friend.tech’s seed funding round at an undisclosed valuation. Many crypto investors bought the project’s FRIEND token in hopes of profiting from its success.
The project’s effective abandonment paints a bleak picture for these investors. But it may not mean the end of friend.tech.
Now that the original creators of the project have abandoned it, there is nothing stopping users of the application or another team from taking up the torch by copying it, or “forcing” it.
Previously abandoned projects have regained success through forks.
Solidly, a decentralized exchange co-created by DeFi godfather Andre Cronje, was abandoned shortly after its launch after several bugs interfered with the protocol.
But Solidly was forked by a new team and relaunched on Base as a new exchange called Aerodrome.
The airfield has become the Base’s largest protocol, with more than $548 million in deposits.
Update:The title of this article has been updated to reflect that the Ami.tech the protocol continues to operate.
Tim Craig is DL News’ DeFi correspondent based in Edinburgh. Feel free to share your tips with us at tim@dlnews.com.
