Friend.tech denies shutdown rumors after renouncing control of smart contracts

Web3 social app Friend.tech has denied rumors of shutting down its app, clarifying the earlier announcement of renouncing control of its smart contracts. In a post on September 10, the team explained that the friend.tech web app will keep functioning as usual, and the changes will simply ensure that there are no further changes to the platform.

According to the team, it does not plan to discontinue or shutter the web app as its action will only guarantee that the protocol’s fees on Base will not be raised.

It said :

“These actions do not affect the current functionality of the friend.tech web app in any way. Everything you know and use remains the same.”

Friend.tech team renounced control of the smart contracts on September 8, irreversibly transferring control to a null address. The decision followed several months of declining activity for the platform.

FRIEND down 97% from peak despite recent gains

Following the team’s most recent announcement, the platform’s native token FRIEND saw a rise in value, gaining almost 25% in the last 24 hours to reach $0.0872, according to CoinGekco. Despite the gains representing a 51% jump from its lowest price yesterday, FRIEND’s value remains 97% down from its peak of $3.26 in May 2024.

The token has been gradually falling for some time, making its recent plunge unsurprising given how it has struggled to record transaction volume or attract new users. Not even an airdrop or the launch of a new app was enough to stem its eventual decline, with daily fees declining below $100.

With FRIEND now trading near its all-time low and the team abandoning the project, several investors, including venture capital firms such as Paradigm and Notation Capital, are left with losses they would have to write off. According to Lookonchain , popular crypto trader Machi Big Brother lost over $16 million on the project with the 11.1 million FRIEND tokens he bought for around 5,200 ETH ($16.7 million) now worth about $0.7 million.

Friend.tech developers leave as millionaires

Meanwhile, investors’ losses did not affect the team as Friend.tech creators as they made millions from the protocol before bailing on it. According to data from Dune Analytics , the project generated $81.2 million in fees since its launch, making it a profitable venture for those involved. With the team getting 50% of the fees, the developers likely made over $40 million within a year.

This has led many to consider the actions of Friend.tech creators as a rugpull, noting that by renouncing their control of the smart contracts, they effectively abandoned the project and left their investors and users with losses. However, some believe a new team can fork Friend.tech and continue its developments, similar to how the DeFi project Solidly became Aerodrome.

Still, many consider the likelihood of this to be low, noting that the best thing for users would have been for the Friend.tech team to sell to someone else who is interested in developing the protocol. One user noted that by removing the protocol’s ability to generate revenue, the team has made it impossible for someone else to improve it, as there is no incentive for doing so.