A typical rise and fall in SocialFi: Friend.Tech has stagnated, and project assets have plummeted
Author: Web3 Scent Observation, Coin World
As a representative project in the SocialFi field, Friend.Tech once enjoyed immense popularity, but now its development has stagnated, and its team has relinquished control of the smart contract. However, this seems to be expected.
On September 8, the development team of the Web3 social network Friend.Tech announced that they would give up control of their smart contract. By transferring control to an empty address on Ethereum, the developers permanently locked the system, preventing further changes, which effectively declared that the platform is essentially closed.
The Friend.Tech team stated on the X platform that revenue generated from the smart contract or website will no longer flow into the team's multi-signature wallet. Although the platform's web client continues to operate normally, and the development team has promised not to withdraw any fees from the smart contract or platform, the withdrawal of control has left the future development of the protocol filled with uncertainty.
An empty address on Ethereum is typically used to destroy tokens, and any assets sent to that address cannot be recovered. This practice may be seen as a way to achieve the vision of decentralization in mature decentralized projects. However, Friend.Tech, as a project that has only been online for a year and is not yet fully developed, is widely viewed as having abandoned its future by relinquishing control at this time. Some community users interpret this move as a halt in platform development, or even the end of the project.
FRIEND Token Plummets and Market Value Shrinks
Following the news, the native token FRIEND of Friend.Tech plummeted in price, and its market value significantly shrank. According to Coin World market data, as of the time of writing, FRIEND is priced at $0.061, with a decline of over 50% in the past 24 hours.
It is worth noting that in May of this year, the price of FRIEND reached a high of $2.6, but it has since fallen to the current $0.06, a drop of over 97%, with a current market value of only $5.65 million. The trading volume of FRIEND tokens has also significantly decreased.
According to DefiLlama data, as of September 9, 2024, the total value locked (TVL) in Friend.Tech has dropped from a historical high of $52 million in early October last year to the current $3.42 million. Additionally, since the end of July, Friend.Tech's daily revenue has fallen below $1,000, with recent daily active users dropping to less than a hundred.
Huang Licheng Holds 11.1 Million FRIEND Tokens with Losses Exceeding $15 Million
The most affected by Friend.Tech's decline is the top whale "Brother Ma Ji," Huang Licheng. On-chain data shows that Huang Licheng currently holds 11.1 million FRIEND tokens. From May 3 to June 8, he spent a total of 4,975 ETH (approximately $15.6 million) to purchase 8.6 million FRIEND at an average price of $1.81.
However, with the plummeting price of FRIEND tokens, the value of these tokens is now only 278 ETH (approximately $640,000) at the current market price ($0.061), resulting in a loss of over $15 million. Considering the liquidity issues in the market, if Huang Licheng chooses to sell, the actual amount he can cash out may shrink further.
The Decline of Friend.Tech Was Expected and Is a Common Issue Among Most SocialFi Projects
Friend.Tech is defined as a Web3 social application that allows users to tokenize their social networks. Since its launch on the Ethereum Layer 2 network Base supported by Coinbase in August last year, Friend.Tech quickly attracted widespread attention from the crypto community. With the participation of heavyweight KOLs, innovative IP monetization methods, and expectations of potential airdrops, the platform attracted over 100,000 users within just two weeks, with cumulative users exceeding one million.
However, in just one year, as the initial hype has faded, Friend.Tech has gradually lost its former glory. In the past two months, the platform's daily active user count has dropped to just a few hundred, and the daily trading volume of Keys has fallen from a high of $20 million to just a few thousand dollars. Even with the launch of the V2 version and airdrop activities, the platform's activity remains stagnant.
The decline of Friend.Tech reveals a core issue in SocialFi projects: platforms overly rely on financial incentives rather than actual social interactions or creator contributions. Although Friend.Tech initially monetized content through the tokenization of "keys," over time, users have focused more on financial returns and speculative trading rather than establishing deep interactions with creators.
Such projects overly depend on speculative activities; once token prices drop, user enthusiasm wanes, and platform activity declines rapidly. This also indirectly reflects the vulnerability of SocialFi projects in the absence of long-term value and practicality.
While users can profit from financial incentives in the short term, the collapse of the speculative bubble leads to the gradual loss of core users and creators on the platform. The future development of SocialFi projects may need to pay more attention to substantial user value and interaction to balance financial incentives with actual application needs. Of course, this also reflects a critical issue in SocialFi and the entire Web3 world: how to completely break away from the funding game model and achieve traffic growth and value creation solely through upgrades in user experience.
