Friend.tech Faces Challenges and Potential Relocation from Base Network
Friend.tech, co-founded by Racer, has recently expressed concerns about being excluded from the Base community, hinting at a possible move away from the Base network. This has raised concerns in the market, causing the native token FRIEND to drop below $1. In addition to the apparent collapse of the Base ecosystem, Friend.tech is also facing challenges within its own business.
Due to the unstable relationship with Base, Racer has announced a reward for anyone who can find a way to migrate Friend.tech from Base without causing significant issues for users. Racer has offered a payout of $200,000 for a successful migration. Racer explained the situation in another tweet, stating that the Friend.tech team has faced instability in their relationship with Base. He mentioned that investors from Farcaster have been spreading negative rumors about Friend.tech, leading to misunderstandings. This has put pressure on the team and users, resulting in their exclusion from the “Base community.” Racer’s tweets have been deleted, and the account is no longer accessible.
Jesse Pollak, the head of Base, responded to the situation, stating that Friend.tech has been mistakenly associated with a negative speculative culture early on, leading to their isolation from Base and the Ethereum ecosystem. He acknowledged Friend.tech’s innovative approach and expressed a desire for a repair in their relationship with the broader Ethereum or Base ecosystem. Pollak expressed regret but also support for any decision Friend.tech makes, highlighting the beauty of decentralization and the blockchain economy.
As a result of these developments, CoinGecko data shows that the FRIEND token has experienced a significant drop of over 35.1% in the past 24 hours. Since its launch, FRIEND has dropped approximately 66% from its highest point. According to Yujin’s monitoring, Huang Licheng, a prominent investor, has accumulated approximately 4873 ETH (worth about $15.35 million) in FRIEND tokens since its launch, with an average price of $1.9. Based on the current price, Huang Licheng has suffered a loss of over $6.94 million.
The recent Base Season report by Franklin Templeton indicated a significant increase in Base’s activity in recent months. This was driven not only by meme coin trading but also by SocialFi applications like Friend.tech. Base captured a significant share of SocialFi activities, accounting for 46% of all related transactions. Dune data shows that as of May 27th, Friend.tech has had a total trading volume of 379,000 ETH, with approximately 17,000 ETH in protocol revenue and over 22,000 ETH in total inflow. Friend.tech’s V2 release and its Club feature have sparked market participation, with Dune data showing over 232,000 Clubs and a total transaction volume of over 42.62 million FRIEND since the V2 launch.
However, amidst Friend.tech’s struggles, Farcaster, another SocialFi project within the Base ecosystem, has also gained market attention. Farcaster recently announced a $150 million funding round, with investors such as Paradigm, a16z crypto, Haun Ventures, and USV. Dune data shows that as of May 27th, Farcaster has generated nearly $1.47 million in revenue and has a total user count of 409,000.
It is worth noting that Paradigm, an investor in Friend.tech, is also the lead investor in Farcaster’s substantial funding round. However, Friend.tech convinced the venture capital firm to give up token allocations and distribute them 100% to the community.
While Farcaster may not match Friend.tech’s profitability at the moment, the latter is experiencing a significant decline in data. DefiLlama data shows that Friend.tech’s Total Value Locked (TVL) has dropped by nearly 67.4% in the past 30 days. Furthermore, Dune data reveals that as of May 26th, the daily creation of Friend.tech’s Clubs has dropped by over 99.6% since its launch, and daily trading volume has declined by approximately 90%. In response to this, Friend.tech has introduced features such as Keydrops, Memeclubs, and Pinned Rooms for Club members 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 and competition from rival projects, Friend.tech finds itself in a dilemma.
Original article source: PANews
