Friend.tech, a once-prominent social finance app, is under fire following a significant change to its smart contracts that has sparked controversy and led to a dramatic drop in its token value. On September 8, the platform's team relinquished control over the project's smart contracts by setting the admin parameters to Ethereum’s null address. This move was intended to prevent future alterations to fees or functions but has instead triggered a series of negative reactions.
The decision to lock the smart contracts resulted in a swift 26% decrease in the value of the Friend.tech (FRIEND) token within just 24 hours. This sharp decline has drawn widespread criticism from the crypto community and raised concerns about the platform’s future.
Crypto analyst Waleswoosh took to X (formerly Twitter) to condemn Friend.tech, labeling it a “Ponzi scheme” that shifted from a social finance application to a more complex trading platform. According to Waleswoosh, the platform’s creators made bold promises to early key holders and amassed over $60 million in fees during its peak.
Further scrutiny has been directed at Friend.tech’s financial practices. Lookonchain reported that the team sold 19,477 ETH, worth approximately $52 million, between December 2023 and June 2024. Despite this significant financial activity, the FRIEND token has experienced a staggering 95% drop in value since its launch.
The criticism is compounded by the perception that the project may have engaged in practices more akin to a Ponzi scheme than a legitimate financial platform. This perception has fueled concerns about the transparency and sustainability of Friend.tech’s operations.
In response to the backlash, Friend.tech’s team issued a statement on September 10, affirming their commitment to continuing the operation of the app. They clarified that the recent changes to the smart contracts were designed solely to prevent future fee adjustments on the Base layer-2 platform. The team emphasized that these modifications would not affect the app’s current functionality, aiming to reassure users and stakeholders about the ongoing viability of the platform.
The controversy surrounding Friend.tech highlights the volatility and challenges inherent in the crypto space. The platform’s decision to lock its smart contracts and the subsequent drop in token value have raised serious questions about its management and future prospects. While the team remains committed to operating the app, the significant decline in token value and the criticisms from analysts suggest that Friend.tech faces a complex road ahead. Investors and users will be closely monitoring how the platform navigates these challenges and whether it can regain its footing in the competitive crypto market.
September 2024, Cryptoniteuae