Manifold Trading Admits Friendtech Key Launch Was Inside Job

Manifold Trading, a crypto trading firm, has admitted that an insider used nonpublic information to profit from a hyped launch on the friendtech social trading app.

On Sep. 28, NFT influencer natealex signed up on the platform using Manifold’s anti-sniping service, which it provides for free to users with large followings looking to purchase their own keys before trading bots scoop them up.

The interface shows that the first regular user was able to purchase the key for just under 1 ETH, as bot transactions aren’t displayed. Meanwhile, blockchain sleuths discovered that one wallet managed to snipe and sell 30 keys, netting 20 ETH ($33,000) in minutes.

Observers immediately suspected that the wallet belonged to either Manifold or someone related to the firm, as it managed to get in alongside the launch transaction from Manifold.

“There’s not 1 sniper that just “randomly” sends the gwei they did without spamming while getting in the same block,” wrote ManaMoonNFT, accusing the firm of shady practices.

The next day, Manifold published a statement admitting that the wallet in question was indeed linked to the firm.

“People think we botted all big accounts in existence at this point,” a Manifold team member told The Defiant. “So we decided might as well go villain arc and actually start backrun sniping launches because it’s easy for us to do, and give creators the profit. We’ll just do this for cases where the presale tools aren’t being used.”

Manifold has been promoting presales as a way to get regular users in at lower prices.

“On any big account launch there is 10-30 ETH that bots take in profits (if no presale). Price action doesn’t change depending on which bots win out of 100s that compete,” the team member said.

“I think value should go towards users, the account creator, and FriendTech. This is why we built presale, self-sniping, and are curious if FriendTech team would run their own L2,” they added.

Second Wave

The token-gated social app that has drawn interest from all corners of the crypto sector is still attracting new traders as it nears its two-month anniversary — friend.tech has had over 10,000 daily active users for 16 days straight as the platform’s creators ride its second wave.

Roughly half of those users are returning users, according to a Dune Analytics dashboard.

That’s five times more than Aave, DeFi’s third largest protocol by value locked, according to Token Terminal.

Levi, a top friend.tech user, thinks crypto enthusiasts may be witnessing the birth of a new category of applications. “It’s like DeFi or NFTs,” he said.

Levi’s key is currently in third place on friend.tech, just ahead of Racer, friend.tech’s pseudonymous co-founder. Vombatus, another pseudonymous player in the crypto space who repeatedly bought their own keys, has the priciest key at over 8 ETH.

The relative calm in the broader crypto market is partially responsible for friend.tech’s ability to make so much noise — Levi for one, is betting that the application is going to stick around.

“I am betting on the platform having staying power,” he said, adding that he thinks it will be the catalyst for the next bull run.

SocialFi

Crypto enthusiasts are no strangers to hype cycles — whether it’s DeFi, NFTs or GameFi.

Hype has worn off DeFi however, as it has for NFTs, and ‘SocialFi’ is now the latest hot narrative.

Of course, any emerging subsector in crypto comes with risks. The addressable market of friend.tech is still limited by a myriad of factors — despite the simplicity of the user experience relative to most crypto applications, friend.tech still has some pain points.

And Uniswap, the leading decentralized exchange and DeFi’s most popular app, still dwarfs friend.tech’s daily user count. Still, friend.tech is the clear leader in the emerging category it created — the project continues to add features in an effort to cement its lead.

The updates include a desktop version — friend.tech was previously only available on mobile — and a watchlist feature which allows people to track room prices even if they don’t own the corresponding keys.