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Crypto social media platform Friend.tech faced significant backlash following a controversial decision by its team. The platform’s native token, FRIEND, experienced a sharp decline of over 42%, reaching its all-time low (ATL) price amid the controversy. Consequently, an Ethereum (ETH) whale saw its investment in the token drop by more than 95%.
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Friend.tech Loses Investors’ Trust
Over the weekend, the crypto platform Friend.tech announced its decision to relinquish control over its smart contracts to avoid future changes. Friend.tech is a Social Finance (SocialFi) platform launched in 2023 that merges the principles of social media with Decentralized Finance (DeFi). This innovative project is a blockchain-based social platform built on Ethereum’s Layer-2 Base, offering users the opportunity to monetize their content. The platform allows creators to generate income by using tradeable tokenized shares, known as “Keys,” to access their exclusive publications and private chats.
On September 7th, Friend.tech’s team disclosed that they had sent the admin and ownership of their smart contracts to Ethereum’s null address to “prevent any changes to their fees or functionality in the future.” According to the post, this change will not impact the “separate web client operated at friend.tech, which will continue as is.” Additionally, fees from the smart contracts or the platform are not going to the developer team’s multisig.
Following this announcement, the project’s community expressed their discontent, voicing disbelief about the decision. One community member labeled the team’s recent actions as “The best display of WORST LEADERSHIP ever in crypto history.” Others questioned whether the decision marked “the final nails in the coffin, or ribbons on a present?” This skepticism was rooted in issues observed during the project’s airdrop in May.
The distrust was further solidified when the platform announced plans to build its blockchain, “Friendchain,” in June. After facing backlash, Friend.tech revealed it had abandoned the project in a now-deleted post. This decision led to a drop in the token’s price by over 35% in July.
Crypto Whale Investment Drops 94%
Since the controversial news broke, FRIEND’s price has decreased by 42%. The cryptocurrency plummeted from $0.102 to $0.0593 over the weekend. By Monday morning, the token’s price had reached its ATL of $0.0574, reflecting a nearly 98% drop from its all-time high (ATH) of $3.26.
As the token hit its lowest price, a prominent crypto investor saw their investment nosedive by more than 95%. Blockchain research platform Spotonchain revealed that a whale had lost over $15 million on its FRIEND holdings. According to the report, Taiwanese personality Machi Big Brother was a “hard-core bull” on the platform’s token. The whale experienced nearly $16 million in realized and unrealized losses after spending around $18 million worth of ETH to acquire FRIEND tokens.
Machi purchased 15.99 million FRIEND tokens between May 9th and August 13th at an average price of $1.125. The trader also accumulated FRIEND tokens by providing liquidity on BunnySwap during this period.
As the token’s value declined over the months, the investor sold approximately 5.26 million tokens to cut losses. At the time, the sale was worth $2.27 million at an average token price of $0.431, representing a 61.7% realized loss.
Machi’s Remaining Holdings
Machi’s remaining 11.1 million FRIEND tokens had a 94.5% unrealized loss, valued at $11.4 million. At the time of the report, the whale’s holdings were worth around $689,000. The cryptocurrency has since recovered 32% from its ATL, briefly hitting the $0.09 mark earlier today, according to Coingecko data. As of this writing, FRIEND is trading at $0.0761, a 2.1% surge in the last 24 hours.
