Friend.tech (TVL) Doubles To Reach Over $20 Million After Being Pronounced Dead
Friend.tech, a decentralized social media platform, has experienced a rapid resurgence, with its Total Locked Value (TVL) doubling to nearly $20 million in just the past four days.
This revival comes after a brief period of stagnation and skepticism. Launched on Coinbase’s Layer 2 Base on August 11, the platform faced criticism when key metrics such as activity, inflows, and volume declined significantly two weeks ago. User engagement had also dropped notably during this time.
In just 10 days post-launch, the platform achieved an impressive revenue of nearly $5.9 million in fees.
However, shortly after that, user engagement experienced a significant downturn. Daily fees plummeted by nearly 87%, and transaction volumes substantially declined by 90% over the following week.
On August 22, the total fees collected from Friend.tech users experienced a sharp decline from over $1.7 million on August 21 to about $740,000, according to DeFi Llama.
This sharp drop led the crypto community to question the protocol’s viability, with some even proclaiming it “dead.”
Also according to Lisandro Rodriguez, a payments risk manager at Coinbase, who took to X to assert that Friend.tech’s downfall was a result of both human greed and an inadequate scaling strategy.
Friend tech is dead because of greed and poor execution. We can see that after the initial influencer pump volume has fallen off a cliff. Let's dig into how this failure came to be 👇🏾 pic.twitter.com/WDQncTQJ21
— Lisandro (@TheRealLisandro) August 27, 2023
The presence of automated trading bots has been implicated in taking advantage of swift price fluctuations, potentially distorting the order of transactions.
“While I do think the idea of friends tech was cool, the greed and poor execution led to its demise,” Rodriguez added.
However, the situation has taken a huge turn as Friend.tech has reached a new peak over the past few days.
According to data from Dune Analytics, the platform had seen an inflow of almost $12.3 million in daily trading volume, making it the third most revenue-generating dApp across the entire DeFi ecosystem.
The sudden surge in trading activity sent shockwaves throughout the entire cryptocurrency ecosystem. Remarkably, on that day, the total locked value of Friend.tech exceeded that of OpenSea, a prominent NFT marketplace, by nearly $3 million.
Friend.tech Records 104% Increase in Users, Implements Key Updates, and Boosts Base Network TVL
Friend.tech has witnessed a surge in activity in the past few days as it has gained popularity among the crypto community and influencers.
It has seen many non-crypto figures on its platform in the past few weeks, with renowned YouTubers and OnlyFans creators drawn by its creator-centric features.
Since September 9, the number of users on the platform has increased by 104%, with at least one initiating a trade on the platform, increasing the total number of its users by over 140,00, according to Dune Analytic dashboard.
Furthermore, Friend.tech has rolled out many updates to improve the functionality and user experience of the app over the past few weeks.
After its debut on August 11, the platform faced a multitude of bugs and technical glitches.
However, the development team has since introduced significant enhancements, such as the capability to upload images, the option to make purchases using credit cards, and the introduction of new sections for various activities.
As a result of the huge spike in the TVL of Friend.tech, Base, the parent network on which it is built, has also seen a slight rise in total locked value.
Moving by 1% from a locked value of $385 million to $389.97 million on September 9.
