- Friend.tech has shut down.
- The project’s creators have revoked their ability to make changes to it.
- They still walked away with $44 million the protocol generated through fees.
Friend.tech, the crypto social network built on Coinbase’s buzzy Base blockchain, is shutting down.
The close leaves investors in the lurch, but the project’s creators are walking away with some $44 million.
Since friend.tech launched a little over a year ago, it’s generated almost $90 million in fees, according to data compiled by 21.co. Half of those fees went to the project’s development team.
Investors haven’t been so lucky — the FRIEND token has declined 98% since its May launch. It fell a further 21% on the shutdown news before partially recovering.
Friend.tech is a blockchain-based social network that lets users invest in influential individuals by buying so-called keys — tokens that grant access to exclusive chat rooms.
On Monday, friend.tech announced that it had transferred admin and ownership rights for the code that backs the protocol to a null address.
Put simply, while the friend.tech protocol will still exist, the project’s creators have irreversibly revoked the ability to make changes to it — or to collect fees.
The situation highlights the capricious nature of crypto apps and their users, and the risks of investing in such projects.
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Investors in the lurch
Friend.tech’s demise is not wholly unexpected.
The project, which at one point accounted for more than half of all activity on the Base network, has struggled in recent months.
In May, friend.tech debuted a new version of the app, coupled with a highly-anticipated token airdrop to early users. This did little to reinvigorate the project, and it continued haemorrhaging users.
Deposits are now down 92% from their October 2023 peak, per DefiLlama data.
Daily new users have dropped to single-digits, and daily generated fees, which once hit $2 million, sit at less than $100.
Many had hoped friend.tech would become a breakthrough app and bring about a new wave of crypto adoption.
Venture firms Paradigm and Notation Capital invested in friend.tech’s seed round at an undisclosed valuation. Many crypto investors bought the project’s FRIEND token in the hopes of profiting from its success.
The effective shuttering of the project paints a bleak picture for these investors. But it might not be the end for friend.tech.
Now that the project’s original creators have abandoned it, there’s nothing stopping the app’s users or another team picking up the mantle by copying — or “forking” it.
Previous abandoned projects have found renewed success through forks.
Solidly, a decentralised 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.
Aerodrome has become Base’s biggest protocol, with over $548 million of deposits.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.