3LAU Steps Back from Friend.tech: A DJ’s Cautionary Tale in Crypto Risks

The DJ Who Danced Away from Risk

Popular DJ Justin Blau, better known in the music world as 3LAU, has made headlines not for his beats, but for his recent departure from the decentralized social media platform, Friend.tech. In a rather dramatic twist, he shared his concerns over potential regulatory pitfalls associated with the platform, proving that even DJs can have second thoughts.

Understanding the Risks

In a candid thread posted on X (formerly Twitter) on September 15, 2023, 3LAU laid bare his reasons for this unexpected move. He mentioned that after evaluating the risks more thoroughly, he found Friend.tech’s framework a bit too shaky for his taste:

“I think it’s an awesome product, but a bit too risky for me (unfortunately).”

In a generous twist, he announced plans to donate 8 ETH (around $13,000) to a charity close to his heart—the Paid In Full Foundation.

What’s the Deal with Friend.tech?

Friend.tech, launched in mid-August, allows users to buy and sell keys that represent their social presence. Essentially, if you’re a big name or a budding influencer, people can buy keys to access exclusive content or interactions. Sounds cool, right? It is, until the regulatory gremlins start gnashing their teeth.

Regulatory Gray Area: A DJ’s Dilemma

3LAU’s primary concern revolved around the platform’s automated market maker (AMM) feature, which allows trading user keys like sports cards at a garage sale. He warned that this mechanic inhabits a regulatory gray area that could spell trouble. In his words:

“Everything there is probably fine minus the AMM mechanic, which holds more risk.”

So while you might think key trading is a smart investment, 3LAU is sounding the alarm on potential issues. After all, who wants to be the DJ with a side gig in legal drama?

Reactions: The Social Media Symphony

His announcement ignited a storm of conversation on X, with fans and critics alike weighing in. Some accused him of using his followers as “exit liquidity” or dumping shares. Ouch! However, 3LAU has taken the high road, promising to reimburse anyone who bought his keys, showing that he’s not just about the music but also about accountability.

A Musical Resolution

In a follow-up, 3LAU shared how he intends to compensate impacted key holders. He plans to create a split contract for reimbursement:

“Making a split contract to return all of this ETH to 3LAU Friend.tech key holders pro-rata at the block at which I sold the first key.”

As for the donation? That’s still going ahead. So, DJ or not, he’s making sure he covers his bases while strumming the strings of goodwill.