Is Friend.tech Doomed? 95% Volume Drop Raises Questions

Friend.tech's Rapid Decline

Friend.tech, has taken a nosedive less than three weeks since its launch on BASE as the daily trading volume fell by more than 95%. The number of new daily users plummeted from its peak of 20,359 on August 21 to a mere 2,392 on August 27, as per Dune data.

Friend.tech daily new traders Source: tk-research (Dune Analytics)

Further, daily transactions on Friend.tech faced a staggering 82% plunge from around 135,644 on August 21 to just over 23,288 on August 27, according to data from Dune Analytics. Simultaneously, inflows have also nosedived from $1.6.8 million on August 21 to approximately $1.6 million on August 27 – a sharp 90.5% drop.

Friend.tech protocol inflow in USD Source: cryptokoryo (Dune Analytics)

The early influencers such as Cobie, Hsaka Trades, and other crypto accounts on Twitter have garnered attention on Friend.tech, but the excitement has waned.

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Influencers and Critics Weigh In

Renowned figures in the crypto sphere have begun expressing their concerns. Michael Gu, founder of Boxmining, observed that buyers and sellers on Friend.tech are dwindling toward zero, signaling a worrying trend.

Beaniemaxi, a pseudonymous NFT trader and crypto analyst, straightforwardly declared "RIP Friendtech" in his tweet, highlighting the platform's decline in transactions.

Formerly ranked among the top 5 fee generators, Friend.tech's peak daily revenue of $843,761 on August 21 has shrunk to a mere $80,558, according to DeFillama data, raising questions about the sustainability of its model in the ever-evolving crypto landscape.

Friend.tech daily fees and revenue (Source: Defillama)

Launched on August 10, the platform initially surged in popularity, with fees reaching $1.7 million on August 21, surpassing even Ethereum. Now, the dwindling hype has led to BASE's lag behind rivals Arbitrum and Optimism in terms of daily transactions, according to l2beat.