Friend.tech critics declare the platform dead as transaction volume drops 95%


  • Friend.tech noted a sharp decline in its transaction volume and fee income over the past week. 
  • Daily new traders, transacting users have slowed down, transaction volume dropped 94.8% since August 21. 
  • BASE is struggling to maintain its position at the top, among competing Layer 2 chains Arbitrum and Optimism. 

BASE’s decentralized social network Friend.tech is in a state of decline less than three weeks after its launch on the chain. Several users and critics on Twitter declared the platform “dead”, citing the drop in the number of users, transaction volume and other metrics.

The count of new daily users on the platform plummeted from its peak from 20,360 on August 21 to 1,811 on August 27. A data panel on Dune Analytics shows detailed statistics noting the performance of the project.

Also read: Friend.tech surprises with $2.88 million in protocol fees; critics point to a possible Ponzi scheme

Friend.tech’s metrics paint a picture of decline in popularity

The hype surrounding the blockchain-based platform fizzled out after early creators like Cobie, Hsaka Trades and crypto influencer accounts on Twitter gained popularity on Friend.tech.

According to a Bloomberg report, Friend.tech appeals to the “speculative mania” that meme coin projects like Dogecoin rely on. The protocol has raised questions as to whether speculation is required for a project to generate high revenue in the crypto ecosystem.

The platform made its debut on August 10. Since then, fees generated by Friend.tech peaked at $1.7 million on August 21 and dropped to $95,400 on August 27. At $1.7 million, Friend.tech was the highest-earning platform after the Ethereum blockchain. 

Fees generated by Friend.tech as seen on Dune Analytics

Fees generated by Friend.tech as seen on Dune Analytics

The hype has resulted in a decline of BASE’s performance against Layer 2 competitors Arbitrum and Optimism.

Arbitrum and Optimism pose tough competition to BASE

Data from a Dune Analytics dashboard compares the number of transacting addresses per day on the three chains. As of August 25, Arbitrum ranked the highest with 122,110, followed by BASE and Optimism. 

Transacting addresses/ day ARB vs OP vs BASE

Transacting addresses/day ARB vs OP vs BASE on Dune Analytics

In terms of transactions per day, a metric that indicates the utility of a platform and its popularity among users, Arbitrum leads with 694,990, followed by BASE at 667,310 and Optimism at 328,350, seen in the chart below. Arbitrum leads in both metrics comparing the three blockchains, posing a tough competition for BASE. 

Transactions/day for Ethereum Layer 2

Transactions/Day for Ethereum Layer 2s on Dune Analytics 

Critic of Friend.tech

Michael Gu, founder of Boxmining, shared his thoughts on Friend.tech in a recent tweet. Heobserved that buyers and sellers are tanking toward zero on the platform. 

Beaniemaxi, a pseudonymous NFT trader and crypto analyst, said “RIP Friendtech” in his tweet. The trader called the platform dead, citing the decline in transactions.

Whether the platform is “dead” or makes a revival depends on the number of new users and demand for influencers’ keys in the near future. Until then, Layer 2 Arbitrum is outperforming BASE amid the slow but steady decline of Friend.tech.

Bitcoin, altcoins, stablecoins FAQs

What is Bitcoin?

Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.

What are altcoins?

Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.

What are stablecoins?

Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.

What is Bitcoin Dominance?

Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.


Like this article? Help us with some feedback by answering this survey:



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Solana congestion troubles could end soon, testnet v1.18.11 release arrives

Solana congestion troubles could end soon, testnet v1.18.11 release arrives

Solana network is plagued by failed transactions caused by congestion issues on the blockchain. The recent rise in popularity of Solana-based meme coins has resulted in a massive increase in user activity on the SOL blockchain, which has exacerbated the issue. 

More Solana News

Bitcoin meme coin PUPS hits new all-time high as Ordinals tokens see massive spike

Bitcoin meme coin PUPS hits new all-time high as Ordinals tokens see massive spike

Pups, a BTC-based meme coin, hit a new all-time high of $84.08 early on Friday. The Ordinals Inscription project, which was launched nearly a year ago, sees gains from anticipation surrounding Bitcoin halving.

More Bitcoin News

XRP price tests $0.60 support as AMM makes comeback on XRPLedger

XRP price tests $0.60 support as AMM makes comeback on XRPLedger

Ripple sees AMM back in action on the XRPLedger mainnet after amendment on Friday. XRP price tests $0.60 support, price ranges below $0.62 on April 12. Ripple CLO shared the Second Circuit Court of Appeals refusal to reconsider their decision, considered a loss for the SEC. 

More Ripple News

Robert Kiyosaki steers clear from ETFs, opts for holding Bitcoin directly instead

Robert Kiyosaki steers clear from ETFs, opts for holding Bitcoin directly instead

Robert Kiyosaki, author of Rich Dad Poor Dad, is popular for his investment advice and pro-Bitcoin stance on social media platform X. Early on Friday, Kiyosaki shared his thoughts on Bitcoin ETFs and advocated holding the asset directly, instead of a “Wall Street” version. 

More Cryptocurrencies News

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established. While Bitcoin’s long-term outlook remains positive, bouts of volatility could bring prices down ahead of the upcoming halving.

Read full analysis

BTC

ETH

XRP