Base, an Ethereum Layer 2 incubated by crypto exchange Coinbase, is now home to 46% of transactions related to SocialFi onchain. According to trillion-dollar asset manager Franklin Templeton, Base has “hit a home run” in SocialFi (Social Finance), largely driven by increasing usage of SocialFi application, Friend.Tech.

In a May report, Franklin Templeton predicted that SocialFi will be a “key vertical to watch” for Base’s adoption and growth over the long haul. According to the asset manager, there is more room for the newly launched L2 to snatch market share from incumbents such as Polygon and BNB Chain.

“[It is] positioning itself well to capture a material share of SocialFi activity and remain a leader in the Ethereum L2 sector going forward,” Franklin Templeton said.

The launch of popular SocialFi platform, Friend.Tech’s native token FRIEND and version two update out on May 3rd is attributed to Base’s recent rise in the SocialFi niche. Base’s direct integration with Coinbase which makes it easy for Coinbase users to access Base through their Coinbase wallets has also helped the L2 network to capture half of the SocialFi market share.

Friend.Tech, launched last august, is a social network that allows users to purchase social tokens called keys that gives them access to exclusive content and creators.

Social-related transactions by network. Chart by Franklin Templeton.

Friend.Tech, currently trading at $2.51, has a total value locked of around $14 million and has gained 20% over the past 24 hours to reach a market capitalization of $233 million.

Base is an L2 built on the Optimism (OP) Stack and secured by Ethereum that provides a secure and low-cost way for developers to build decentralized apps (dApps) onchain. The OP stack is a collection of software protocols that powers the Optimism network and provides the building blocks to construct L2 blockchain solutions on top of Ethereum.

Base, in recent months, has seen a significant increase in activities, driven by SocialFi application Friend.Tech and the trading activities of Base memecoins such as BRETT, DEGEN and TOSHI, which has grown to cumulatively market capitalization of over $500 million.

Image Source: The Block data dashboard

Despite not launching an airdrop yet, Base is starting to rival popular Ethereum L2, Arbitrum and Optimism in terms of revenue and transactions. Base generated more than 60% ($355,000) of total Layer 2 revenue ($583,000) on Thursday, data from The Block’s dashboard reveals. Similarly, the daily transactions count on Base is five times higher than Optimism and one million more than Arbitrum.

Base has also seen a huge surge in the supply of USDC on the network from around $100 million in December to over $2.5 billion today. Franklin Templeton attributed this surge to a Coinbase announcement in December 2023 that offered free transfer of USDC on Base using the Coinbase Wallet.