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

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 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 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.