The first major breakout star on Base blockchain has announced a new Layer 2.

What is FriendTech?

It is a dApp you log into via your X account. Inside, you can buy or sell 'Keys' – think of them as shares – of other users. This, in turn, gets you into an exclusive chat with other Keyholders. There's no guarantee that the X user will engage tho. The twist? These Keys/tokens are minted on a bonding curve that increases prices as more are created. So, if you get in early on a user before everyone else does, you may profit considerably. Below is a chart of their transactions over time

Base and Friend.tech launched on August 9th and 10th respectively. Friend.tech immediately became the top dApp of the Base chain. At one point, 36.2% of daily transaction fees on Base came from Friend.tech. As you can see in the chart, it grew massively until September 13th. That day, it handled 539,810 transactions. Friend.tech had a points-based system. And a large chunk of that activity was driven by airdrop speculations. But eventually, people got tired of speculating. And Friend.tech activity started to decline.

You can also see a notable spike in activity around May time. This was largely driven by their v2 and token launch. But those releases didn't do much for the dApp. So, their numbers kept declining following the launch. At the same time, Base has continued to grow massively. Recently, they even overtook the Optimism mainnet in TVL.

They are launching their own chain called Friendchain. It will be built in partnership with Conduit, a rollup-as-a-service provider. Conduit is already behind rollups such as Zora, Aevo, and Orderly.

$FRIEND will be used as the gas token for this new chain. And while this might increase the token’s utility, there are risks too. All major L2s use $ETH as their gas token for a reason. They have to pay Ethereum in $ETH. If they accept other tokens as gas tokens, there's a risk that the token price will fall below the level required to buy enough $ETH.

Why Build Their Own Chain Now?

Their own chain will give Friend.tech greater control over their tech stack. It might allow them to make changes faster and provide a better user experience. Personally, whenever someone moves to their own chain, it's usually a way for them to make more money 🤷‍♂️ .

Friend.tech has been performing quite poorly. Both the dApp numbers and the token price have been trending downward. So, this L2 might be a pivot to save the application.