Friend.tech Faces Difficulties Again
Recently, Racer, the co-founder of Friend.tech, claimed in a post that they were being excluded by the Base community and hinted at the intention to move away from the Base network. This has raised concerns in the market, resulting in a drop in the value of their native token, FRIEND, to below $1. Apart from the apparent breakdown in their relationship with Base, Friend.tech is also facing challenges in their own business.
Due to the unstable relationship with Base, Racer’s positions have suffered a setback
Over the weekend, Racer tweeted, “System Design Bounty: If you can find a way to migrate Friend.tech from Base without causing significant issues for users and it runs well enough, we will adopt it and pay you $200,000.”
In another tweet, Racer explained the reasons behind this. He stated that the Friend.tech team has always had an unstable relationship with Base. “Investors in Farcaster have been spreading negative rumors about us since our launch because they misunderstood what we were doing. They have put a lot of pressure on our team and users, and ever since then, our relationship has been deteriorating, and we have been excluded by the ‘Base community’.” Currently, Racer’s related tweets have been deleted, and the account has been deactivated.
In response to this, Jesse Pollak, the person in charge of Base, stated that Friend.tech’s product was wrongly associated with a “negative speculation” culture in its early stages, causing Friend.tech to feel isolated and disconnected from certain parts of the Base and Ethereum ecosystem. Friend.tech is at the forefront of innovation and has set the direction for the entire industry. He hopes to see a wider Ethereum or Base ecosystem repair its relationship with the project. If the Friend.tech team decides to leave Base, he would be disappointed but would respect and support any path taken. This is the beauty of decentralization and the online economy.
As a result of this situation, CoinGecko data shows that in the past 24 hours, the FRIEND token has experienced a decline of over 35.1%. Since its launch, FRIEND has dropped by about 66% from its highest point. According to Yujin Monitoring, Huang Licheng, known as the “Big Brother” of positions, has accumulated a total of 4873 ETH (worth about $15.35 million) in purchasing FRIEND tokens since its launch, with an average price of $1.9. Based on the current price, Huang Licheng has suffered a floating loss of over $6.94 million.
Financing institutions participate in competitive investments, and multiple data show significant declines
Not long ago, the Base Season report released by Franklin Templeton pointed out that Base has seen a significant increase in activity in recent months. In addition to being influenced by MEME coin trading activities, SocialFi applications such as Friend.Tech have also been driving this trend, capturing a large share of the SocialFi activity, accounting for about 46%.
Dune data shows that as of May 27th, Friend.Tech’s total historical trading volume reached 379,000 ETH, with protocol revenue of about 17,000 ETH and total ETH inflow exceeding 22,000 ETH. At the beginning of this month, Friend.tech’s V2 version airdrop plan caused market participation, especially with its popular new feature, Club. Dune data shows that since the release of V2, there have been over 232,000 Clubs, with a total transaction volume of over 42.62 million FRIEND.
However, at the same time, Farcaster, which is also in the Base ecosystem and the SocialFi track, has attracted market attention and recently announced a $150 million financing round led by Paradigm, a16z crypto, Haun Ventures, and USV. Dune data shows that as of May 27th, Farcaster’s total revenue is nearly $1.47 million, with a total number of users reaching 409,000.
It is worth noting that Paradigm, an investor in Friend.tech, also led the substantial financing of Farcaster. However, Friend.tech convinced the venture capital institution to give up its token quota and allocate 100% to the community.
While Farcaster gains popularity, Friend.tech has been hyping itself on social media to indirectly criticize competitors like Farcaster and attract attention. For example, they posted questions like “For users who can’t afford to use Friend.tech, what encrypted social application would you recommend?” and “Friend.tech is only suitable for the wealthy, please categorize yourselves.” The two leaders in the social track are engaged in a fierce competition.
From the data, although Farcaster’s profitability cannot currently compare to Friend.tech’s, the latter is facing a significant decline in data. DefiLlama data shows that in the past 30 days, Friend.tech’s TVL has dropped by nearly 67.4%. Dune data also shows that as of May 26th, the daily creation of Friend.tech’s Club has decreased by over 99.6% since its launch, and the daily trading volume has dropped by approximately 90%. As a response, Friend.tech has introduced features such as Keydrops, Memeclubs, and Pinned Rooms for Club in the past few months. They also plan to start refunding 2/3 of the Club Key redemption protocol fees to users.
With a significant loss of users on one hand and competition and ecosystem “exclusion” on the other, Friend.tech finds itself in a dilemma.
This article is a collaborative reprint from PANews.
