Justin Blau, popularly known as DJ 3LAU, and a notable crypto investor, has announced his withdrawal from the decentralized social media platform Friend.tech. This move has started discussions within the crypto community, as 3LAU cited regulatory risks as his primary reason for exiting the platform.
In a recent X post on September 15, 2023, 3LAU shared his decision, emphasizing his concerns about the potential regulatory challenges posed by Friend.tech. He commended the platform as an “awesome product” but expressed reservations about its perceived risks. As a result, he decided to step away from it. 3LAU also revealed his intention to donate the approximate 8 ETH proceeds from the platform to a music-specific charity called the Paid In Full Foundation, which he is passionate about.
One of 3LAU’s key concerns revolved around Friend.tech’s automated market maker (AMM) mechanism. This feature allows users to trade user keys (formerly known as shares) on the platform, creating a trading system for social media presence. However, 3LAU suggested that this feature operates within a regulatory gray area, potentially causing issues for users in the future. He clarified that while he did not consider the risks to be excessively high, he felt a responsibility to avoid engaging in areas with unclear regulatory boundaries.
In his statement, 3LAU stressed that he did not want his brand associated with an AMM in this context. This decision generated a significant reaction on social media, with users either supporting or criticizing the DJ.
Notably, some users accused 3LAU of selling his keys, potentially affecting his followers negatively or using them as “exit liquidity.” However, 3LAU promptly addressed these concerns by stating that he would reimburse anyone who had purchased his keys.
Friend.tech, which was introduced in mid-August, allows users to tokenize their social presence by buying or selling keys. These keys hold financial value and can fluctuate based on various factors, which has created a challenging situation for those who wish to exit the platform.
3LAU clarified his plans to compensate key holders from Friend.tech and reduce initial drama. He proposed using a split contract to distribute ETH proceeds to key holders pro-rata from the first key sale block. He also reaffirmed his commitment to donating the key’s value to charity.
This highlights the importance of navigating crypto and decentralized social media’s evolving regulatory landscape responsibly. His actions demonstrate a responsible response to exit concerns.