Friend.tech Team Denies Shutdown Rumors Following Smart Contract Transfer to Null Address
Friend.tech Hands Over Control: Market Turmoil Ensues
On September 7, Friend.tech, a decentralized social media platform on Ethereum’s Base layer, transferred control of its smart contracts to Ethereum’s null address (0x000...000). This move effectively locks the platform’s core functionality and fee structures in place, preventing any future alterations.
The immediate aftermath saw a dramatic plunge in the value of Friend.tech’s native token, FRIEND, which nosedived from $0.81 to a low of $0.057 by September 8, 2024, marking a significant 28% drop. The market cap of FRIEND also fell sharply from $7.43 million to $6.66 million within just 24 hours.
The platform’s financial metrics reveal a troubling trend. Despite initially outperforming Ethereum in revenue generation, Friend.tech has struggled since May 2024. At its zenith, a single key on Friend.tech was valued at nearly $14,500 (8.9 ETH). However, the total value locked (TVL) on the platform has plummeted by 93.6%, dropping from $52 million to $3.3 million.
The community's reaction has been overwhelmingly negative, with many perceiving the smart contract control transfer as a de facto abandonment of the project. Notably, VietnamPenguin on X described the event as an "excellent rug," criticizing both the Friend.tech developers and the venture capital firm Paradigm, which had earlier declined its FRIEND token allocation.
Financial data from DeFiLlama underscores the platform’s diminishing returns, with total fees generated since launch amounting to $63.4 million. However, revenues stagnated from a peak of $2 million per day in September 2023 to just $2,000 daily by July and August 2024.
The developers’ financial activity has also come under scrutiny, with substantial movements of funds reported over the past year. Wallets linked to the Friend.tech development team have transferred significant amounts of Ethereum to Coinbase, with current balances now under $200,000.
Amidst the chaos, the Friend.tech team clarified on September 9, 2024, that the platform’s web app would continue to function normally. The transfer of control was solely to prevent changes to smart contract fees, not to shut down the platform. This announcement briefly lifted the FRIEND token’s value by 40% to $0.094, though it remains significantly lower than its previous highs.
The overall sentiment remains bleak, with substantial declines in user engagement and platform deposits. Historical context suggests that while some abandoned crypto projects have been revived, the current climate surrounding Friend.tech is fraught with skepticism and uncertainty.
This article has been refined and enhanced by ChatGPT.
