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Friend.tech, a crypto social media platform, is currently facing significant backlash due to a controversial decision by its team. This has led to a sharp decline in the value of its native token, FRIEND, resulting in considerable losses for investors.
Recent Developments
Over the weekend, the value of FRIEND plummeted by more than 42%, reaching an all-time low (ATL). This decline has particularly affected a prominent Ethereum (ETH) whale, whose investment in FRIEND has decreased by over 95%. The turmoil surrounding the platform has raised serious concerns about its future and the trust of its community.
Launched in 2023, Friend.tech is a Social Finance (SocialFi) platform that merges social media with decentralized finance (DeFi) principles. Built on Ethereum’s Layer-2 Base, it allows content creators to monetize their work through tradeable tokenized shares known as “Keys.” These Keys grant users access to exclusive publications and private chats, creating a unique ecosystem for creators and their audiences.
Community Backlash
In a surprising move, Friend.tech announced it would relinquish control over its smart contracts to an Ethereum null address. This decision aimed to prevent any future changes to fees or functionality but was met with widespread discontent. Many community members expressed disbelief and frustration over this decision, which has further eroded trust in the platform.
Previous issues during the project’s airdrop in May had already raised doubts among investors. The situation worsened when the platform announced plans for its own blockchain, “Friendchain,” in June, which was later abandoned after facing significant criticism. This series of events has led to a crisis of confidence among users.
Impact on Token Value
As the fallout from these announcements unfolded, the price of FRIEND continued to decline. The token, which had been trading at approximately $0.102, fell to $0.0593 over the weekend, ultimately hitting its ATL of $0.0574. This represents a nearly 98% decline from its all-time high (ATH) of $3.26.
The sharp drop has led to substantial financial losses for investors, particularly for a well-known figure in the crypto community. This individual had invested heavily in FRIEND tokens, spending around $18 million worth of ETH to acquire approximately 15.99 million tokens at an average price of $1.125. As the value of FRIEND fell, this investor attempted to mitigate losses by selling around 5.26 million tokens for $2.27 million, realizing a loss of 61.7%.
Current Situation
Despite the turmoil, there have been signs of a slight recovery, with FRIEND briefly reaching the $0.09 mark earlier, representing a 32% increase from its ATL. As of the latest data, FRIEND is trading at $0.0761, reflecting a modest 2.1% surge in the last 24 hours. However, the remaining 11.1 million FRIEND tokens now carry a staggering 94.5% unrealized loss, valued at approximately $11.4 million.
The dramatic decline in FRIEND’s value has not only impacted individual investors but has also raised broader concerns about the stability and future of Friend.tech as a platform. The community’s trust has been severely shaken, leading many to question whether the platform can recover from this crisis.
Lessons Learned
The situation at Friend.tech serves as a cautionary tale for investors in the rapidly evolving crypto landscape. The combination of poor leadership decisions, community backlash, and significant financial losses highlights the volatility and risks associated with investing in emerging platforms.
As the crypto market matures, the importance of transparency, trust, and effective governance will be crucial in determining the success or failure of projects like Friend.tech. Investors must remain vigilant and informed to navigate the complexities of this dynamic environment.
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