- Trading volumes and activity on the controversial SocialFi platform Friend.tech has been elevated recently, but that is not necessarily a positive metric.
Over the weekend, the total trading volume on Friend.tech exceeded $10 million, the highest for several weeks.
However, industry analyst Colin Wu said, “This may be exit behavior.”
Ethereum is being withdrawn from the platform as keys are being redeemed at a faster rate than they are being minted, according to Dune Analytics.
Friend.tech ETH Exodus
More than 5,000 ETH was withdrawn from the platform in the two days over the weekend. It is the largest withdrawal since October 24, when 4,380 ETH was taken off in a single day.
Moreover, Friend.tech total value locked fell 21% over the weekend to 17,100 ETH, or $33.6 million.
It is the lowest TVL on the SocialFi platform since mid-September.
On November 18th and 19th, the total trading volume of friend tech exceeded 10 million US dollars, which was the highest in more than half a month. This may be an exit behavior. A total of 4.42k ETH was withdrawn from friend tech in the two days over the weekend. Friend tech TVL…
— Wu Blockchain (@WuBlockchain) November 20, 2023
Since its peak of around $50 million in early October, Friend.tech TVL has tanked by around 34%.
Additionally, there has been virtually no increase in the number of new users since late October. According to Dune, the platform has a total cumulative user figure of 839,190, but activity has fallen back overall. Bitcoinworld reported last week about Friend.tech’s daily transactions plunging to new lows.
Moreover, the platform has been plagued with scams as malicious actors target its users through phishing and SIM-swap attacks.
Over the weekend, the team reported that they had identified and removed 600,000 accounts identified as bots. However, it appears that genuine users have also been locked out.
We've been working to reduce botting. Today, we identified and removed 600k accounts identified as bots from the feed's vote distribution.
If you believe your account was identified as a bot in error, please contact [email protected] and include your X/Twitter username
— friend.tech (@friendtech) November 17, 2023
Prominent crypto influencers are now reporting being locked out of the platform. One said they lost more than 10 ETH, which the platform will not help them recover. “These social finance apps are all incompetent, and I regret joining them,” said “SalsaTekila.”
Meanwhile, analyst Alex Krüger said the Friend.tech team “locked me out with an upgrade, then refused to help,” adding:
“These people are absolute scum. Founders have a fiduciary duty towards holders who put their money in.”
Update on my social finance journey:
1) Got locked out of friend tech and they won't help me recover; lost probably 10+ ETH.
2) Got drained on star arena for all my avax, lost like 1500 avax.
— SalsaTekila (@SalsaTekila) November 19, 2023
It appears that the Friend.tech hype could be waning as users become disgruntled with the platform and start withdrawing their assets (if they can).
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