Friend.tech Faces Challenges as it Considers Leaving Base Network
Recently, Racer, co-founder of Friend.tech, posted an article stating that they were being excluded by the Base community and hinted at the possibility of leaving the Base network. This has caused concerns in the market, resulting in a drop in the value of their native token, FRIEND, to below $1. Apart from the apparent collapse of their relationship with Base, Friend.tech is also facing challenges within its own business.
Due to the unstable relationship with Base, Ma Ji Big Brother’s position is severely cut
Over the weekend, Racer tweeted, “System Design Bounty: If you can find a way to migrate Friend.tech out of Base without causing significant issues for 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 investors had heavily criticized them during their launch, misunderstanding their intentions. This led to significant pressure from the investors on the team and users, causing their relationship to deteriorate and resulting in their exclusion from the “Base community.” Racer’s tweets have since been deleted, and the account is no longer accessible.
In response, Jesse Pollak, the person in charge of Base, stated that Friend.tech’s product was mistakenly associated with a “negative speculation” culture during its early stages, causing them to feel isolated and disconnected from parts of the Base and Ethereum ecosystems. He acknowledged that Friend.tech is at the forefront of innovation and has set the direction for the entire industry. He expressed his hope for a restoration of their relationship with the broader Ethereum or Base ecosystem. If the Friend.tech team decides to leave Base, he would be disappointed but would respect and support whatever path they choose – this is the beauty of decentralization and the online economy.
As a result, according to CoinGecko data, in the past 24 hours, the FRIEND token has experienced a drop of over 35.1%. Since its launch, FRIEND has fallen by about 66% from its peak. According to the Yujin monitoring, Huang Licheng, the “Warehouse Big Brother,” 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 suffered losses of over $6.94 million.
Financing institutions participate in competitive investments, and multiple data experiences significant decline
Not long ago, the Base Season report released by Franklin Templeton pointed out that Base’s activity has significantly increased in recent months. In addition to the trading activity of MEME coins, SocialFi applications such as Friend.Tech have also contributed to this increase, capturing a significant market share of SocialFi activities.
According to Dune data, as of May 27th, Friend.Tech’s total trading volume reached 379,000 ETH, with protocol revenue of approximately 17,000 ETH and a total inflow of over 22,000 ETH. At the beginning of this month, Friend.tech’s V2 version airdrop plan caused a market frenzy, especially with the popular new feature, Club. Dune data shows that since the release of V2, there have been over 232,000 clubs, with a total transaction volume of over 42.62 million FRIEND.
However, at the same time, Farcaster, which is also in the Base ecosystem and the SocialFi track, has attracted significant market attention. It recently announced a financing of $150 million, with investors including Paradigm, a16z crypto, Haun Ventures, and USV. According to Dune data, as of May 27th, Farcaster has generated a total revenue of nearly $1.47 million and has over 409,000 users.
It is worth noting that Paradigm, an investor in Friend.tech, is also the lead investor in Farcaster’s substantial financing. However, Friend.tech was able to convince the venture capital firm to relinquish its token allocation and distribute it 100% to the community.
While Farcaster gains popularity, Friend.tech has been actively promoting itself on social media and indirectly criticizing competitors such as Farcaster to gain attention. For example, they asked, “For users who can’t afford to use Friend.tech, what encrypted social applications would you recommend?” and “Friend.tech is only suitable for the wealthy, please categorize it yourself.” These two leaders in the social track are engaged in fierce competition.
From the data perspective, although Farcaster’s profitability cannot yet compare to Friend.tech’s, the latter is experiencing a significant decline in data. DefiLlama data shows that in the past 30 days, Friend.tech’s TVL has dropped by nearly 67.4%. Additionally, Dune data shows that as of May 26th, the number of daily Club creations for Friend.tech has dropped by over 99.6% since its launch, and the daily trading volume has decreased by approximately 90%. As a result, Friend.tech has introduced features such as Keydrops, Memeclubs, and Pinned Rooms for Club in the past few months. They also plan to refund 2/3 of the Club Key exchange protocol fees to users.
With a significant loss of users and competition from rivals, Friend.tech is currently facing a dilemma.