“Unprecedented TVL Drop at Friend.tech!””Friend.tech’s TVL Plummets: Is Network Security at Risk?”

Friend.tech Records Largest Single-Day TVL Drop Friend.tech’s Total Value Locked (TVL) has undergone a substantial decline recently, registering its most significant single-day drop of 7.8% in early October, indicating a noteworthy downturn in performance.
Additionally, there has been a significant redemption of keys on Friend.tech, with reports of ongoing sim swap attacks casting a shadow over the network.
Massive Drop in Friend.tech TVL
A data and research analyst, Tom Wan, recently released an X thread exposing the massive drop in the new network’s TVL, as seen on Dune analytics. As per the tweet on Oct. 4, the network experienced its most significant single-day drop in TVL, recording a loss of about 2.3K Ethereum.

The TVL of @friendtech dropped 7.8% in a single day
What happened?
The new features in our @DuneAnalytics dashboard will show you what causes the drop
(0/6) pic.twitter.com/JizJZtsSPs
— Tom Wan (@tomwanhh) October 5, 2023 According to the data from DefiLlama stats, the Base-based platform experienced a decline in Total Value Locked (TVL) from 29.19K ETH to 27.14K ETH on Oct. 4. This was part of a series of TVL drops that started on Oct. 3, with a decrease of approximately 1.30K ETH. By early Oct. 6, the TVL had fallen to 26.48K ETH. Of note, the most significant TVL drop occurred on Oct. 4, with a reported decrease of about 7.8%, according to Tom Wan. Despite the decline in TVL, idle capital remained steady at 10.34K ETH (approximately $17M) on Oct. 4, as the redeemed keys were fully withdrawn from the network.
Additional reports indicate that despite the decrease in TVL, the amount of dry powder did not drop, suggesting that users could potentially reenter the market anytime.
Key Redemptions Reach New Heights
Tom Wan’s thread highlighted the statistics regarding the redemption of keys. Sept. 14 stands as the pinnacle, with a remarkable 6.7K ETH worth of keys redeemed. However, it is worth noting that 6.9K ETH worth of keys were minted during the same period.
On Oct. 4, there was a notable surge in key redemption, reaching a new high of approximately 2.1K ETH, valued at $3.5 million, as reported in the thread.
When users redeem their keys, they can either keep the Ethereum within the app or withdraw it from the system entirely. On Oct. 4, users who redeemed their keys chose to withdraw the funds from their accounts, resulting in no increase in idle capital within the network.
Chang, one of the biggest key holders, is among those who have been redeeming. As per reports, the player offloaded 43 of his keys, making profits of about 140 ETH ($232K).
The offloading led to a significant price decline in the key, plunging from 3.89 ETH per key to 2.64 ETH.
However, Chang’s profit is still in his FT account. He spent 77 ETH minting new keys on Oct. 4, 39 ETH of which was used to buy back 15 of his keys at a lower price of 2.27 ETH.
As per reports, the recent and ongoing sim swap problem is to blame for the sudden decrease in TVL. Reports indicated a scammer could make $387K in Ethereum through sim swap attacks on the network’s users.

I was just SIM swapped and robbed of 22 ETH via @friendtech
The 34 of my own keys that I owned were sold, rugging 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 doxxed to your real… pic.twitter.com/5wA86mjYEG
— daren (friend, friend) (@darengb) October 3, 2023 After many complaints that began a few days ago, Friend.tech upgraded its system to include login removal options. However, according to Tom Wan, the recent spree of withdrawals and TVL drops is mainly because of the sim swap attacks.

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