Friend.tech’s total value locked (TVL) has seen a significant decline recently, recording its largest single-day drop of 7.8% in early October, indicating a notable decline in performance.
Additionally, there has been significant key recovery on Friend.tech, with reports of ongoing SIM swapping attacks taking their toll on the network.
Huge drop in Friend.tech TVL
Data and Research Analyst Tom Wan recently released an According to the tweet dated October 4, the network saw its largest single-day drop in TVL, recording a loss of around 2.3 thousand ETH.
TVL’s @friendtech It fell by 7.8% in one day
New features on our website @DuneAnalytics The dashboard will show you the reasons for the decline
– Tom Wan (@tomwanhh) October 5, 2023
According to DefiLlama data statistics, the base-based platform saw its total value locked (TVL) decrease from 29.19K ETH to 27.14K ETH on October 4. This was part of a series of TVL declines that began on October 3, with a decline of approximately 1.30K ETH. By early October 6, TVL had fallen to 26.48 thousand ETH.
It should be noted that the most significant decline in the total expected value occurred on October 4, with a decline of approximately 7.8%, according to Tom One. Despite the decline in TVL value, the idle capital remained stable at 10.34 thousand ETH (about $17 million) on October 4, as the recovered keys were fully withdrawn from the network.
Additional reports indicate that despite the decrease in the total value of the product, the amount of dry powder has not decreased, indicating that users are likely to return to the market at any time.
Major recoveries reach new heights
Tom One’s post highlighted statistics related to key recovery. September 14 marks the pinnacle, where a cool 6.7k ETH worth of keys were redeemed. However, it should be noted that keys worth 6.9 thousand ETH were minted during the same period.
On October 4th, there was a noticeable increase in key redemptions, reaching a new high of around 2.1K ETH, worth $3.5M, as mentioned in the thread.
When users redeem their keys, they can either keep their Ethereum within the app or withdraw it from the system entirely. On October 4th, users who recovered their keys chose to withdraw funds from their accounts, resulting in no more idle capital within the network.
Zhang, one of the largest key holders, is among those who have refunded their money. According to reports, the player dumped 43 of his keys, making profits of around 140 ETH ($232,000).
The dump led to a significant drop in the key price, dropping from 3.89 ETH per key to 2.64 ETH.
However, Zhang’s profits are still in his FT account. He spent 77 ETH minting new keys on October 4, of which 39 ETH was used to buy back 15 of his keys at a lower price of 2.27 ETH.
According to reports, the recent and ongoing SIM swap issue is responsible for the sudden drop in TVL. Reports indicated that a scammer could make $387,000 in Ethereum through sim swap attacks on network users.
The SIM card was just swapped and 22 ETH was stolen @friendtech
The 34 keys I had were sold, annoying anyone who held my key, all the other keys I owned were sold, and the rest of the ETH in my wallet was drained.
If your Twitter account is linked to your real account… pic.twitter.com/5wA86mjYEG
— Darren (friend, friend) (@darengb) October 3, 2023
After numerous complaints that started a few days ago, Friend.tech has upgraded its system to include login removal options. However, according to Tom Wan, the recent wave of withdrawals and TVL devaluation is mainly due to sim swap attacks.
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