- DeFi app FriendTech’s hype wanes, with rapid decline in numbers.
- Peak daily fees hit $1.7 million, but dropped 98% to $38,000.
- Concerns raised over trading fees, load times, and token valuation.
In a sudden twist, the hype that once surrounded the DeFi social app FriendTech is now showing signs of waning. Within a remarkably short timeframe since its launch, its numbers have witnessed a significant decline, prompting experts to delve into the underlying causes of this downturn.
Upon its debut on August 10, FriendTech quickly gained traction, generating impressive fees that at one point positioned it as the second-highest earning platform after Ethereum itself. As per the latest data from a Dune Analytics dashboard by tk-research, the cumulative fees amassed by the app have now surpassed the $8 million mark.
Specifically, daily fees from token transactions soared to nearly $1.7 million at its pinnacle, placing FriendTech at the forefront of DeFi. However, this soaring success was short-lived, as the daily generated fees dropped by almost 98% to roughly $38,000 just a week later. In addition, daily trading volume also fell from its record of $16.8M to $382,185.
Aside from plummeting inflows, the platform is also grappling with a decrease in user engagement. FriendTech’s initial wave of new users fizzled out, with a significant drop of almost 97% in new account sign-ups. Meanwhile, the number of daily transactions in the platform went from 135,644 at its peak to only 4,743.
This sudden decline has raised questions about the sustainability of the platform’s model and its ability to retain users over time. While the exact reasons for this downturn remain unclear, a report from the crypto research firm Messari revealed that users have voiced concerns over trading fees, sluggish load times, and the valuation mechanism for tokens on the platform. Additionally, the absence of a clear privacy policy raised eyebrows among traders and potential users alike.
Automated trading bots, which played a significant role in the initial spike in transactions, also contributed to the downturn. According to experts, these bots manipulated transaction sequences, allowing them to buy tokens ahead of influencers at lower prices. This not only left creators paying higher prices in the secondary market but also led to a decline in user engagement.
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