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Friend.tech’s native token, FRIEND, has suffered a dramatic price drop after the platform’s development team transferred control of its smart contracts to a known burn address dubbed Ethereum’s null address.
This unprecedented move, coupled with declining market confidence, has caused the token’s value to plunge by over 30% and hit an all-time low of $0.05748.
In addition, with the platform’s future seeming uncertain, investors are questioning the viability of its decentralized model.
Friend.tech team abandoning smart contract control
Friend.tech’s decision to transfer control of its smart contracts to Ethereum’s null address on September 8, 2024, marked a significant turning point for the Web3 platform.
This address is commonly known as a “burn address,” a special blockchain location that effectively removes control and ownership of assets sent to it.
By sending the smart contracts to this address, the team has permanently relinquished their ability to update the platform, adjust fees, or implement new features.
While decentralization is often a goal for many blockchain projects, the abruptness of this move has left many investors concerned. Without the ability to alter the platform, Friend.tech has locked in its current system.
However, the development team has reassured users that daily functionality would not be affected, but the absence of future updates and enhancements has sparked scepticism.
Admin and ownership parameters have been set to 0x000…000 to prevent any changes to their fees or functionality in the future. This change does not affect the separate web client operated at friend.tech which will continue to function as is. No fees from either…
FRIEND token drops to its lowest levels
Irrespective of the reassurance from Friend.tech’s team, the implications of their decision have been severe for the FRIEND token.
Shortly after the transfer, the token’s value dropped by 30%, reaching a new all-time low of $0.05748. The market cap also plummeted from $233 million to just $5.6 million, underscoring the level of investor unease.
Although the token had rebounded to around $0.06099 at press time, it remained 24% down over the past 24 hours with a general bearish market sentiment. This sudden drop in value has spelt doom for investors.
One particular whale who had spent approx. 5.2K $ETH($16.7M) to buy 11.1M $FRIEND, is now counting losses with his tokens now worth only $0.7M.
Machi Big Brother(@machibigbrother) spent ~5.2K $ETH($16.7M) to buy 11.1M $FRIEND, now worth only $0.7M! He lost ~$16M on $FRIEND! basescan.org/token/0x0bd488…
The abruptness of Friend.tech’s move, combined with poor communication from the team, has raised questions about the project’s long-term vision and stability.
Concerns over Friend.tech’s sustainability
Friend.tech was launched in August 2022 on the Ethereum Layer 2 network Base, quickly gaining traction in the SocialFi space, where users could monetize their social media profiles by selling tokenized shares, or “keys.”
Initially, the platform saw impressive success, attracting over 100,000 users and generating over $2 billion in revenue shortly after its launch.
However, cracks began to show as early as mid-2023 when the team made confusing announcements about future plans.
One of the most notable moments was Friend.tech’s June announcement to build its own blockchain, dubbed “Friendchain.”
However, this plan was later scrapped, which only added to investor confusion and caused a sharp decline in the FRIEND token’s value.
The token saw a 25% drop occurred in July when the team clarified that the platform would remain on Base.
Since July, Friend.tech has also seen its daily fees drop below $1,000, reflecting a sharp decline in usage and trading volumes.
This trend, combined with previous issues surrounding a FRIEND token airdrop in May, has only exacerbated concerns.
Even Ethereum co-founder Vitalik Buterin voiced criticism of the platform’s financial speculation model, warning that it could be dangerous for fostering healthy social interactions.
“Bad gamefi is using financial speculation as a substitute for fun. Blockchain games need to be fun as games” – approx quote I’ve said many times I believe a similar thing for crypto social. Registering a prediction: farcaster and lens will NOT be deserted in 4 months, or 1 yr.
Friend.tech’s move to abandon smart contract control has now compounded these concerns, leading many to believe that the platform may struggle to sustain itself without the ability to adapt or respond to future challenges.
Investors are left with uncertainty about the platform’s future, with many questioning the team’s long-term commitment after this dramatic step toward decentralization.
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