Decentralized social media platform Friend.tech, which operates on Coinbase's layer-2 network Base, has announced plans to develop its own blockchain, named Friendchain. This decision, made public on June 8, has left many users questioning the rationale behind creating a new blockchain for a social media platform.

In its announcement, Friend.tech stated that it will collaborate with crypto infrastructure startup Conduit to develop and transition to Friendchain. The platform also revealed that it will use its native token, Friend (FRIEND), as a "fully transferable gas token."

Crypto trader Dr. Jojipup responded to the announcement on social media platform X, asking, “No hate, just a genuine question, What is the value proposition of a social-focused chain?” Similarly, pseudonymous crypto commentator ox0 questioned the necessity of a new blockchain, while Pop Punk, co-founder of gas-auditing firm Gaslite, simply commented, “why.”

Concerns were also raised about potential increases in gas fees compared to those on Base, which is often touted as a "low-cost" Ethereum layer-2 solution. Despite these concerns, the announcement caught the attention of traders, leading to significant volatility in the price of Friend.

Market Reaction and Volatility

Following the announcement, the price of Friend experienced a dramatic spike, surging 64% within 20 minutes to reach $1.31. However, this sharp increase was short-lived, as the price quickly dropped back to $0.89 within the hour, according to CoinMarketCap data.

This significant price fluctuation came just a month after Friend.tech launched the Friend token alongside a major airdrop. The airdrop, which went live on May 3, saw the largest whale, known as “Murphys1d,” sell over 55,000 of the newly-issued Friend tokens shortly after distribution.

Historical Context and User Concerns

The move to develop Friendchain marks a notable shift for Friend.tech, which saw a surge in activity and transactions during its strong launch in August 2023. However, the platform's activity had stagnated significantly until the recent airdrop and subsequent blockchain announcement.

The user base's confusion and skepticism highlight the broader questions about the necessity and value of a dedicated social-focused blockchain. As Friend.tech and Conduit work on developing Friendchain, the platform will need to clearly articulate the benefits and unique value propositions to its community to address the prevailing doubts and concerns.