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The controversial decision by the team behind the crypto social media platform Friend.tech has sparked a significant backlash. The platform’s native token, FRIEND, experienced a staggering 42% drop, hitting an all-time low price amidst the controversy. This decision led to a dramatic decrease in the value of investments, with one Ethereum whale witnessing a plummet of over 95% in their token holdings.
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Friend.tech Loses Investors’ Trust
Over the weekend, Friend.tech, a crypto platform, announced a decision to relinquish control over its smart contracts to prevent future alterations. Friend.tech is a Social Finance (SocialFi) platform that was launched in 2023, blending the concepts of social media and Decentralized Finance (DeFi).
The project operates as a blockchain-based social platform on Ethereum’s Layer-2 Base, offering users the chance to earn from their content creation. Users can monetize their content by utilizing tokenized shares, known as “Keys,” to access exclusive content and private chats.
On September 7, Friend.tech’s team made the decision to transfer admin and ownership of the smart contracts to Ethereum’s null address to prevent any future fee or functionality changes. This move is not expected to impact the separate web client operated at friend.tech, which will continue as usual. Additionally, the fees from the smart contracts or the platform are not going to the developer team’s multisig.
Following this announcement, the community expressed dissatisfaction with the decision, labeling it as a display of poor leadership in the history of crypto. Doubts had already arisen in May during the project’s airdrop, and were further solidified when Friend.tech announced plans to create its blockchain, “Friendchain,” in June. After facing backlash, the project abandoned the initiative, causing a 35% decline in the token’s price in July.
Crypto Whale Investment Drops 94%
Following the announcement, the price of FRIEND plummeted by 42%, dropping from $0.102 to $0.0593 over the weekend. By Monday morning, the crash led to the token hitting its all-time low of $0.0574, marking nearly a 98% decline from its all-time high of $3.26.
As the token reached its lowest value, a crypto investor witnessed a significant drop of over 95% in their investment. Reports from blockchain research platform Spotonchain revealed that a whale incurred losses of over $15 million on their FRIEND holdings.
It was disclosed that Taiwanese figure, Machi Big Brother, had shown strong support for the token, resulting in substantial realized and unrealized losses. The whale was at a loss of nearly $16 million, having initially invested around $18 million worth of ETH to acquire FRIEND tokens.
Machi acquired 15.99 million FRIEND tokens between May 9 and August 13 at an average price of $1.125, also accumulating tokens by providing liquidity on BunnySwap during this period.
As the token’s value continued to decline, the investor opted to sell around 5.26 million tokens to mitigate losses. At the time of sale, the tokens were worth $2.27 million, with an average token price of $0.431, resulting in a 61.7% realized loss.
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The remaining 11.1 million FRIEND tokens held by Machi experienced an unrealized loss of 94.5%, equating to $11.4 million. Currently, the whale’s holdings are valued at approximately $689,000.
Despite the substantial drop, the cryptocurrency has shown a 32% recovery from its all-time low, briefly reaching $0.09 earlier today based on Coingecko data. At the time of writing, FRIEND is trading at $0.0761, indicating a 2.1% increase in the last 24 hours.
Featured Image from Unsplash.com, Chart from TradingView.com
