Web3 social media platform Friend.tech faces rug pull allegations online after the team permanently relinquished control over the project’s smart contracts. 

On Sept. 8, the team behind Friend.tech announced that it had set the admin and ownership parameters to Ethereum’s null address. The team said that this prevents any future changes to their fees or functions. 

Following the move, the Friend.tech (FRIEND) token dipped by 26% just 24 hours after the announcement. 

Friend.tech rugged?

In a post on X, pseudonymous crypto analyst Waleswoosh said, “Friend.tech rugged.” In a thread, the analyst described the project as a “Ponzi” as it evolved from a social finance (SocialFi) app into advanced trading. 

Source: Waleswoosh

The analyst also said that during the project’s peak, creators within the platform promised their key holders “wild things,” with one creator promising to split airdrops between key holders. The analyst also pointed out that apart from creators, Friend.tech’s team also made over $60 million in fees. 

According to blockchain analytics platform Lookonchain, the Friend.tech team sold 19,477 Ether ( ETH ), worth about $52 million, from Dec. 2, 2023, to June 11, 2024. Lookonchain also highlighted that the token’s price had dropped 95% since its launch. 

While people dubbed the platform to have the potential to be the next Instagram, interest waned. The analyst said that after its much-anticipated airdrop, most holders sold their tokens and moved forward. 

Because of the recent Friend.tech announcement, Waleswoosh believes that Friend.tech tokens and keys are now “worthless.” 

Related: Why Web3 gaming needs a Steam-like platform for growth

Friend tech responds to community questions

On Sept. 10, the team behind the SocialFi app posted an announcement, clarifying some concerns about the project. According to the team, they have no plans to discontinue the Friend.tech website application. 

The project also reiterated that their actions only guarantee that no future changes will be deployed on the layer-2 platform Base, which would create new fees. The team also added that the actions don’t affect the app’s functionality, saying everything “remains the same.”

Cointelegraph approached Friend.tech for comments but did not get an immediate response. 

Magazine: Web3 Gamer: SocialFi boosts game revenue, Axie Infinity creator wants to ditch Discord