The Decline of DeSoc: Friend.Tech Abandons Smart Contracts and Farcaster Stagnates

Developers of the Web3 social network Friend.Tech have transferred the administration and ownership rights of the project’s smart contracts to an Ethereum burn address.

Admin and ownership parameters have been set to 0x000…000 to prevent any changes to their fees or functionality in the future.

This change does not affect the separate web client operated at https://t.co/YOHabcBL3H which will continue to function as is. No fees from either…

— friend.tech (@friendtech) September 8, 2024

The transactions effectively locked the system in its current state, preventing any further “changes to fees or functionality.”

“Currently, no fees from either the smart contracts or the [site] friend.tech are being directed to the team’s multisig wallet,” the statement reads.

The changes did not affect the Friend.Tech web client, allowing the application to continue operating indefinitely.

“The end of an era is not at all what I imagined,” wrote Ethos founder Serpin Takst.

He mentioned he would have purchased the project’s technology for integration into his own protocol, but “now it’s all over.”

Friend.Tech was launched on August 10, 2023, on Ethereum’s second-layer network Base, supported by Coinbase. The decentralized social platform integrated with X allowed participants’ profiles to be tokenized.

Less than three weeks after a successful start, the community began discussing the project’s “death”—active users, fund inflows, and collected fees plummeted by ~90%.

In May 2024, the Friend.Tech team launched the second version of the protocol and conducted an unsuccessful FRIEND token airdrop, marred by technical and organizational issues. After the distribution, the token’s price collapsed from $169 to $1.4.

Subsequently, the asset’s price fell by 30% following a proposal by Friend.Tech co-founder Racer to move the protocol from Base to its own blockchain.

Amid the team’s abandonment of smart contracts, the FRIEND token’s price dropped by ~26% in a day. The asset is trading at $0.06 with a market capitalization of $5.6 million.

According to a dashboard on Dune, the project’s TVL fell from a peak of $50.78 million in September 2023 to just over $4 million.

The number of users of the Web3 social network is ~918,000, but in August, the daily number of new connections fell below 10. Daily fee volumes dropped to less than $100.

However, since its launch, the platform has earned ~$86.3 million in fees, distributing ~$44.7 million among content creators.

Farcaster and Lens Protocol Also Stagnate

The popularity of the blockchain-based social network Farcaster initially surged after the launch of Frames functionality in late January. The solution allows developers to embed various interactive features directly into messages.

In May, the platform raised $150 million in a round involving Andreessen Horowitz (a16z), Haun, USV, Variant, Standard Crypto, and others. Farcaster co-founder Dan Romero stated that the funds would support the platform’s development “for many years to come.”

However, the daily number of new accounts in the social network fell from a February peak of ~15,000 to 545 by September 8, according to Dune.

The number of daily active users (DAU) peaked at around 104,000 in June but has since declined to 60,000. Post and interaction metrics with the protocol have decreased by 60%.

Another representative of the segment, Lens Protocol, shows a similar decline in user activity. Daily registrations fell from a peak of 37,000 in February to 142 by September 8.

DAU decreased from a peak of 42,281 in July to 8,368.

According to X user MayDay Crypto, the issue with DeSoc projects is that they attempt to build “on blockchain” analogs of traditional social networks without any innovations in functionality and user interface.

The problem with Farcaster is that it’s trying to “build” what is already there “but on blockchain” without any UX/UI innovations. The first successful decentralised social app will be one of the current web2 market leaders after they integrate blockchain technologies.

— MayDay Crypto??? (@Mayday117) September 9, 2024

“The first successful decentralized social app will be one of the current Web 2.0 market leaders after they integrate blockchain,” he suggested.

As reported in August, 84% of crypto users spend most of their time on platforms like X, Telegram, and YouTube for thematic information, according to a CoinGecko study.