Friend.tech Faces Difficulties as Relationship with Base Community Becomes Unstable
In a recent post, Racer, co-founder of Friend.tech, claimed to be “excluded by the Base community” and hinted at the intention to move away from the Base network, causing market concerns. As a result, the native token of Friend.tech, FRIEND, fell below $1. Apart from the apparent breakdown with the Base ecosystem, Friend.tech’s own business is also facing challenges.
Due to the unstable relationship with Base and the desire to leave the agreement, Racer’s positions have been significantly reduced.
Over the weekend, Racer tweeted, “Bounty for system design: If you can find a way to migrate Friend.tech from Base without causing significant issues to users and if it runs well enough, we will use it and pay you $200,000.”
Racer explained the reasons behind this in another tweet, stating that the Friend.tech team has always had an unstable relationship with Base. He mentioned that Farcaster’s investors spread false information about them when they launched, misunderstanding their intentions. They put a lot of pressure on the team and users, causing their relationship to deteriorate, leading to their exclusion from the “Base community.” Racer’s related tweets have been deleted and are no longer accessible due to account deletion.
In response, Jesse Pollak, the person in charge of Base, stated that Friend.tech’s product was mistakenly associated with a “negative speculator” culture in its early stages, which made Friend.tech feel isolated and disconnected from certain parts of the Base and Ethereum ecosystem. He acknowledged that Friend.tech is at the forefront of innovation and has set a direction for the entire industry. He hopes to see a broader Ethereum or Base ecosystem repair its relationship with the project. If the Friend.tech team decides to leave Base, he would be disappointed but would respect and support any path, as that is the beauty of decentralization and the blockchain economy.
As a result of these developments, CoinGecko data shows that in the past 24 hours, the FRIEND token has experienced a maximum decline of over 35.1%. Since its launch, FRIEND has declined by about 66% from its peak. According to Yujin’s monitoring, Huang Licheng, a major holder, has accumulated 4,873 ETH (worth about $15.35 million) to purchase FRIEND tokens since its launch, with an average price of $1.9. Based on the current price, Huang Licheng has already suffered a loss of over $6.94 million.
Investors from Franklin Templeton, who participated in the Friend.tech project, are also leading the funding for Farcaster, another project in the Base ecosystem and SocialFi track, which has recently announced a funding of $150 million from Paradigm, a16z crypto, Haun Ventures, and USV. According to Dune data, as of May 27th, Farcaster’s total revenue is nearly $1.47 million, with a total of 409,000 users.
It is worth noting that Friend.tech’s participating institution, Paradigm, is also the lead investor in Farcaster’s substantial funding. However, Friend.tech convinced the venture capital firm to give up token quotas and distribute them 100% to the community.
While Farcaster gains popularity, Friend.tech has been boosting itself on social media while indirectly criticizing competitors such as Farcaster to attract attention. For example, they posted questions like, “For users who don’t have money to use Friend.tech, what encrypted social applications would you recommend?” and “Friend.tech is only suitable for wealthy people, please categorize it yourself.” The two leading projects in the social media track are engaged in a fierce competition.
Looking at the data, although Farcaster’s profitability cannot yet compare to Friend.tech, the latter is facing a significant decline in data. DefiLlama data shows that in the past 30 days, Friend.tech’s Total Value Locked (TVL) has dropped by nearly 67.4%. Additionally, Dune data shows that as of May 26th, the daily creation of Friend.tech’s Club has dropped by over 99.6% compared to its launch, and the daily trading volume has dropped by approximately 90%. In response to this, Friend.tech has introduced features such as Keydrops, Memeclubs, and Pinned Rooms for Club over the past few months. They also plan to start returning 2/3 of the Club Key exchange protocol fees to users.
With a significant loss of users and fierce competition from rivals, Friend.tech finds itself in a dilemma.