The cryptocurrency application linked to Twitter has gained significant traction, resulting in increased activity and a higher accumulation of fees within the Coinbase-supported Base network built on Ethereum’s layer-2 infrastructure. Since last Friday, the Friend.tech app developed on the Coinbase-incubated Base network has experienced a substantial surge in its level of engagement.
The app functions by tokenizing Twitter accounts directly on the blockchain, enabling users to purchase and trade “shares” representing their preferred social media influencers. Created by an individual known as the pseudonymous developer Racer, Friend.tech became operational through an exclusive beta launch on August 11, one day after the mainnet release of Base.
The application encountered server capacity challenges on its initial launch day, gaining immense popularity within the specific cryptocurrency community the following Friday.
The count of distinct users actively using the app more than doubled, rising from around 31,500 to over 67,400 as of the current time. The revenue and fees generated by Friend.tech also exceeded those of prominent market leaders like Uniswap and MakerDAO, as well as major layer-1 blockchains such as Bitcoin and Tron on August 20, according to DeFiLlama data. Furthermore, the application has significantly boosted the level of activity on the recently launched Base blockchain.
Base’s daily transaction volume reached an unprecedented peak on August 20, surpassing even the leading layer-2 networks Arbitrum and Optimism, with over 900,000 transactions recorded.
Understanding the Purpose of Friend.tech
Friend.tech is a mobile-exclusive social media platform connected to Twitter, where user accounts are transformed into tokens. Individuals who purchase “shares” of another user’s account are granted exclusive entry to that account’s private chat room.
One intriguing aspect contributing to its popularity is the utilization of a bonding curve, which automatically calculates the buying and selling prices, mirroring the automated market-making (AMM) framework of Uniswap. Traders are not required to find a trading partner to buy or sell shares on Friend.tech. Instead, a predetermined mathematical formula determines the price based on the number of users holding shares of an account.
The value of the shares increases in correlation with the number of shareholders. As an illustration, the Friend.tech account of well-known cryptocurrency trader and influencer Cobie currently holds a value of 2.04 Ethereum, approximately equivalent to $3,400, with approximately 145 holders.
The account of crypto analyst Adam Cochran, encompassing 57 holders, has a value of 0.576 ETH. Despite its mounting popularity, certain analysts have highlighted that the enthusiasm might be short-lived.A pseudonymous crypto analyst with the moniker “DeFi Made Here” tweeted that, at present, the app primarily serves as a method to speculate on “sh*tcoins,” denoting influencers’ shares, and to potentially earn rewards from an airdrop.
Furthermore, the bonding curve utilized by the platform is notably steep, making it challenging to attract additional participants to purchase shares. The analysts remarked that the cost becomes excessively high after the initial 100 shareholders.Notwithstanding, the platform is amassing significant attention, attracting prominent figures from beyond the cryptocurrency domain. Notable individuals such as Y Combinator founder Garry Tan, NBA player Grayson Allen, and professional gamer Faze Banks have joined the social media application.