The development team behind friend.tech has achieved remarkable success since its launch in August, with nearly $20 million in revenue. According to data from DeFiLlama, friend.tech is currently the leading revenue-generating application on Base and the second-largest in the entire crypto space. With its projected annual revenue of $180 million, friend.tech is poised for further growth.
User Fees and Revenue Distribution
So far, friend.tech has generated approximately $40 million in user fees. These fees are obtained from taxing around 10% of the trading volume of social tokens. Half of the collected fees are allocated as revenue for the project’s team, while the remaining half is distributed among users whose keys are traded. This revenue-sharing model ensures benefits for both the platform and its users.
The Unique Experience of Friend.tech
Friend.tech serves as a platform that allows users to connect their Twitter accounts and facilitates the buying and selling of influencer profile tokens, known as “keys,” using ETH on the Coinbase-backed Layer 2 network, Base. These keys grant users privileged communication access to influencers, creating a unique social interaction experience. Despite the emergence of several friend.tech clone apps, the project continues to dominate the SocialFi niche in terms of daily volume.
However, there has been a decline in the number of unique users since late September. This highlights the importance of continuously improving the platform to attract and retain users.
The Challenges friend.tech Faces
Despite its success, friend.tech has faced its share of challenges. One of these challenges came with the recent SIM-swapping attacks, where a hacker stole approximately $385,000 worth of digital assets in just 24 hours. These attacks involved swapping the SIM cards of friend.tech users to gain unauthorized access. This incident raises concerns about the platform’s security and the protection of users’ funds.
An analysis by blockchain sleuth ZachXBT revealed that the scammer had managed to pilfer 234 ETH in a short span of time by targeting multiple friend.tech users. Additionally, Manifold Trading, a company specializing in industry tools, has stated that $20 million of friend.tech’s total locked value of $50 million is potentially at risk due to these SIM-swapping attacks. To address this risk, Manifold Trading recommends that friend.tech enhance its account security protocols by implementing two-factor authentication (2FA).
Manifold Trading warns, “If you assume 1/3 of FriendTech accounts are connected to phone numbers, that’s $20M at risk from sim-swaps.”
This analysis also revealed another potential vulnerability in friend.tech’s setup, where a rogue developer could reconstruct private keys by recovering Shamir-Secret-Sharing shares from user data in the platform’s database. This discovery suggests that the entire TVL (Total Locked Value) of friend.tech is at risk.
Manifold Trading concludes, “The whole TVL is at risk.”
Given the scale of revenue generated and the potential risks involved, it is essential for friend.tech to prioritize security measures to ensure the safety of user funds and maintain its position as a leading player within the SocialFi niche.
