Crypto.news - Earnings on the decentralized social platform Friend.tech plummeted in tandem with its number of daily users.
According to the latest data from DeFiLlama, Friend.tech’s earnings started to fall, with more than 70% lower fees by the end of the week compared to its peak. The number of daily added users also fell, marking an almost 80% decrease.
Friend.tech fees | Source: DefiLlama
At the height of its popularity, Friend.tech was the highest revenue-generating entity in decentralized finance (defi). It gained as many as 100,000 users in a few days.
A variety of sports, business, and social media personalities, including Grayson Allen, Garry Tan, Cobie, and HsakaTrades, were among the first creators on the platform.
While the social media project created ripples in the digital asset trading community earlier in the month, some analysts suggest the reduced fees and revenues may be a sign it is losing its spark. Users are reportedly complaining about high trading fees, slow load times, and a steep token pricing curve.
Friend.tech pricing curve | Source: Dune
At the beginning of last week, Friend.tech registered slightly more than 20,000 new users, data shows. It even saw an influx of content creators from OnlyFans after enabling the sending of photos. By the end of last week, at least four OnlyFans content creators had entered Friend.tech’s list of the 50 most valuable accounts.
The highest-ranked among them, JenfoxxUwU, reportedly sold her keys for as much as 0.87 ETH each, or about $1,435. In contrast, her monthly OnlyFans subscription costs less than $4.
However, by Aug. 25, after the OnlyFans hype seemed to have faded, the number of new users went down to 4,484.
Furthermore, at one time, Friend.tech was only second to Ethereum (ETH) in terms of generated fees and revenue. However, it is currently ranked tenth, having earned $215,552 in the previous 24 hours, per Dune Analytics.
The project was also responsible for generating up to 20% of the traffic on the Base network, thanks to heightened bot activity. In a two-week period, bots secured more than 21,000 keys and later resold them for a $2.1 million profit.
According to a Bloomberg report, the same bots are also putting off users of the platform by manipulating transactions and forcing creators to pay higher fees for keys.
What is Friend.tech?
Friend.tech launched on Aug. 10 as a so-called decentralized social network (DeSo). It allows users to tokenize their social connections, granting them access to features like private messaging and interaction rights. Essentially, it permits users to acquire “shares” of individuals on X, formerly Twitter.
This innovation has been attributed to pseudonymous developer Racer, who previously delved into decentralized social media with TweetDAO and Stealcam, which later transformed into Friend.tech.
Almost immediately, it saw a rapid ascent but sparked debates on data privacy and novel monetization of social interactions. For example, by connecting an Ethereum wallet with a social media account on X, it grants a Friend.tech account certain permissions such as the ability to post and retweet on another person’s behalf.
Still, Friend.tech won praise from Coinbase (NASDAQ:COIN) CEO Brian Armstrong, who noted that the platform could play an important role in the growth and adoption of Base, Coinbase’s new layer-2 blockchain network.
Jeremy Allaire, the CEO of Circle, the issuer of USDC, also touted Friend.tech’s growth as a compelling use case of BusinessSocialFi.
Unfortunately, Friend.tech’s increased popularity is attracting hackers.
On Aug. 21 there were reports of a supposed hack. However, the platform clarified that data retrieved was due to scraping, not a security breach.