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Resilient Engagement: Friend.tech Users Stay Active Despite 95% Drop in Trading Volumes

Aug 31, 2023 at 11:57 am

As revenues take a tumble, some market analysts are proclaiming the demise of the platform. But is that truly the case? The spotlight is on Friend.tech, a social app, as it garners attention for seemingly skyrocketing and then plummeting within a short span, a trajectory evident in the decreasing revenue activity. Remarkably, Friend.tech had surged to become the largest cryptocurrency platform based on this metric earlier this month.

Friend.tech introduces a unique concept by allowing personalities from X (formerly Twitter) to issue "keys" on its platform, granting access to exclusive closed group chats. Over the course of its existence, the platform has accumulated more than $4.2 million worth of ether in fees for content creators. This innovative platform is built on Base, Coinbase's newly developed layer-2 network.

While data displays a stark drop in transactional engagement, sliding from its peak of $16 million on August 21 to slightly above $700,000 as of Thursday, signaling a 95% decrease in trading volumes, certain on-chain analytics firms are offering a different perspective. Arkham, an analytics company, noted on Twitter that some of the narratives depicting an exit from the platform might be overstated. It pointed out that users still hold 3,870 ETH worth of keys, which is only a minor 10% decrease over the past week.

Although cumulative volumes have expanded from $80 million to $85 million throughout the week, it's worth noting that these figures plateaued. This follows a rapid surge from $2 million to $80 million during the initial two weeks after the platform's launch on August 10.

Interestingly, actual user engagement doesn't seem to be experiencing the same downward trend. The data illustrates a nearly doubled total user count in the last week, with around 5,000 returning users daily - individuals who engage with the platform on consecutive days.

New users decreased, but returning users remain stable. (Dune Analytics by @whalehunter) 

New users decreased, but returning users remain stable. (Dune Analytics by @whalehunter)

However, new user registration has been experiencing a steady decline over this period, potentially indicating that the initial surge in demand or interest has been fulfilled. Developers of Friend.tech assert that more than 75% of key holders are actively using the app "the next day," and over 50% continue to engage with it even after a week.

On Thursday, the developers disclosed that the average active key holder dedicates more than 30 minutes per day to the platform.

Remarkably, Friend.tech has drawn attention from notable personalities beyond the crypto realm, including figures from X. This influx of non-crypto individuals has contributed to the platform's rapid virality. Names like Richard "FaZe Banks" Bengtson II, a co-founder of the influential esports community FaZe Clan, NBA player Grayson Allen, and various popular creators from the subscription site OnlyFans have all joined Friend.tech within the last few weeks, propelling its growth.

The platform's expansion has occurred within an exceptionally brief time frame, even by the accelerated standards of the cryptocurrency world. Friend.tech's exclusive beta launch occurred on August 10, generating approximately 4,400 ETH (roughly $8.1 million) in trading volume on its inaugural day.

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