The Friendsies Fiasco: Rug Pull Rumors and Leadership Woes Explained

What is happening over at Friendsies? The kindness-themed NFT project, headed by FriendsWithYou founders Samuel Borkson and Arturo Sandoval III, raised some major eyebrows in the Web3 community on February 21 when they tweeted that they’d be putting “a pause on Friendsies and all future digital goods for the time being.” Specifically, they cited market volatility and an inability to deliver the project as intended as reasons for the pause.

Without further explanation, the team then deleted the Friendsies Twitter account. From rug pull accusations to a public offer to take over Frendsies, we dive into everything that happened next and offer additional insight from a well-known collector in the NFT space.

A pregnant pause

After the tweet, rumors of a rug pull immediately began to circulate, with some concerned that the $5.3 million the project raised in its April 2022 mint had yet to be reinvested into Friendsies and its community as promised. Further, part of the project’s roadmap — according to self-described on-chain sleuth ZachXBT — included a Tomogatchi-like P2E game, community treasury, and a royalties program that all had yet to materialize.

When the official FriendsWithYou website also went dark following the announcement, it only served to fuel these worries (the website is back up at the time of writing). However, in a quick turn of events, the Friendsies team reactivated its Twitter account just hours after the initial announcement, tweeting that the founders simply wanted to “pause social media engagement” and were not putting a pause on the project itself. The Friendsies team claimed that their Twitter and website had been overwhelmed by hate and threats in an apparent attack on them and the project.

Whatever the truth behind the situation, the community won’t have to wait long for the full explanation. NFT collector fungibles is hosting a Twitter space on February 22 at 3 PM ET in which Borkson and Sandoval will make an appearance and field questions. But it may be too little, too late.

˙ᵕ˙ – Hi friends! We wanted to reach out directly to the community with an important update.  As the project founders, we have decided that it would be best to put a pause on @fRiENDSiES_Ai and all future digital goods for the time being. We had the best intentions to make a

— fRiENDSiES (@fRiENDSiES_Ai) February 21, 2023

˙ᵕ˙ – Dear Community,

It is clear that we have upset many of you with the nature of our announcement, and perhaps we did not handle that in the best way possible.  To be very clear, we are not abandoning fRiENDSiES.  Our only intention was to be transparent and communicate with

— fRiENDSiES (@fRiENDSiES_Ai) February 21, 2023

These latest developments are allegedly part of a larger pattern of misteps and improper planning by the FriendsWithYou leadership team. Speaking with nft now on background, a well-known collector in the NFT space described their experience in the FriendsWithYou community as markedly disappointing. The collector had bought a Friendsies NFT that, as part of a March 2022 auction with Christie’s, came with a painted bronze sculpture counterpart. However, after being informed by the Friendsies team that they would need to pay an additional $8,000-12,000 to ship the statue, the holder declined and subsequently had to return the NFT. They were refunded 45 percent of their total NFT investment, taking a significant loss in the process. 

As a further concern, the anonymous source and others in the space have pointed to wallet activity that saw much of the ETH the project wallet had accumulated in its mint swapped for USDC and taken out of the ecosystem.

Community sentiment

Whatever is happening in the FriendsWithYou world, people aren’t impressed. While the Friendsies team espoused the need to be transparent in its most recent Twitter update, the Web3 community hasn’t failed to notice that deleting the project’s Twitter account after making an ambiguous announcement regarding its future is a strange way to foster transparency

Nor are Web3 community members particularly charmed with the fact that FriendsWithYou has blocked several Twitter accounts that either criticized or reported the project’s pause (FriendsWithYou also blocked nft now after we reported on the announcement and subsequent deletion of Friendsies’ Twitter account). 

Making a public offer to take over Friendsies. I’ll install a new team and take the project forward with a different vision

The IP has so much potential and the holders deserve better. We just cannot keep letting stuff like this slide because it really is hurting the space.

— Satvik Sethi (@sxtvik) February 21, 2023

While some community members are focused on these flaws, others see an opportunity. In a move reminiscent of Pixelmon and Pudgy Penguins’ leadership changes, artist and former Mastercard Web3 Lead Satvik Sethi offered to buy out the Friendsies project shortly after the initial announcement, saying the community deserved better and that the IP had too much potential to go to waste. 

Incompetence or ill intent?

While the entire Web3 community has a particularly well-honed radar for malicious actors at this point, it’s possible that recent revelations surrounding Friendsies’ mismanagement may be just that: incompetence, not ill intent.

Given the haphazard nature of how the FriendsWithYou team handled holders’ sculpture delivery and refunding, and the recent inconsistencies in how they have communicated changes to their community, Friendsies woes might simply be the result of an unsteady hand at the helm. After all, the team may end up owing more in taxes on their mint earnings than they can now cover. 

btw when these guys say “market volatility” they really mean “we bagheld ETH down 70% and then sold the bottom”

— Arkham (@ArkhamIntel) February 21, 2023

The Friendsies NFT drop was billed as a set of customizable NFTs that act as virtual companions to their owners that FriendsWithYou planned on making interactive in the metaverse. Borkson and Sandoval called them a “personal, augmented reality friend” and “a lifelong digital companion” while speaking to nft now in March 2022 (full disclosure, nft now engaged in a giveaway with Friendsies in the same month). All of the project’s activity was very much couched in the narrative that Borkson and Sandoval have long expressed: empathy, camaraderie, and making the world a better place. Ideas of unity and kindness are supposedly woven into its DNA and creators’ vision. 

It can’t be ignored that recent events surrounding the FriendsWithYou universe are made all the more glaring through the lens of that thematic grounding. Borkson and Sandoval have been active in the community for months, promoting every value that Web3 represents at its best. But their team will have to take the heat if they want to maintain legitimacy in the eyes of the community. 

“Together, we are the creators of a new world,” reads the FriendsWithYou Golden Cloud Club membership page. “We, the architects of a new society, pledge to uphold the [principles] of empathy and compassion for each other and our living planet.” Those principles are now being put to the test, and whatever the FriendsWithYou team decides to do in the immediate future, the whole of the Web3 community is going to hold them to their own standard. That’s not bullying; that’s accountability.

The post The Friendsies Fiasco: Rug Pull Rumors and Leadership Woes Explained appeared first on nft now.

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