Base Hits All-Time High Amid FriendTech Hype
Coinbase’s L2 usage surpasses competition
Based on IntoTheBlock’s weekly newsletter. If you enjoy it, and would like to receive it every Friday make sure to sign up here!
This week we dive into the renewed growth in Base, Coinbase’s layer 2 on top of Ethereum. We analyze some of the impressive statistics on its traction, the breakout application leading the way and how its leading to a more specialized layer 2 ecosystem.
Network Fees — Sum of total fees spent to use a particular blockchain. This tracks the willingness to spend and demand to use Bitcoin or Ether
- Bitcoin network fees climbed by 40%, stabilizing at around 30 Bitcoin per day, 2x greater than they were a year ago prior to Ordinals
- Ethereum fees declined by 4% as lack of volatility leads to slower demand on Mainnet, despite adoption on layer 2s
Exchanges Netflows — The net amount of inflows minus outflows of a specific crypto-asset going in/out of centralized exchanges
- Bitcoin recorded $10M in net inflows, while $110M of ETH left CEXs
Base Hits All-Time High Amid FriendTech Hype
Coinbase’s Base layer 2 has been gaining remarkable traction since its launch two months ago. With a combination of bluechip protocols and Base-native ones, the Coinbase L2 has been quickly attracting users and surpassing expectations.
Base Momentum — Here are some statistics on the growth of Coinbase’s L2
- September 14 marked a new all-time high for Base transactions, recording more transactions than Arbitrum and Optimism Mainnet combined
- Base has averaged 888k daily active addresses over the last month, with nearly 60% of the market share of addresses using Optimism roll-ups
- The Coinbase L2 has already attracted $380M in total value locked, making it a top 10 chain in this regard per DeFiLlama
Interestingly, it is not DeFi applications nor NFT marketplaces driving the surge in Base’s activity. Instead, a significant portion of usage can be attributed to a new social application, FriendTech.
FriendTech Hype Explained — Here’s a brief introduction to FriendTech (FT) and its remarkable numbers
- FT creates user accounts connected to their Twitter profiles, creating keys for each user which can be used to access a chat with them
- Users can buy and sell these keys, giving them upside on social profiles
- Influencers are incentivized to join as they can benefit not only from their keys going up in value, but also from getting 50% of their keys’ trading fees
- The remaining 50% of fees goes to FriendTech as revenue, which is currently on track to reach $93M annually, making it one of the most profitable crypto applications
- FriendTech usage has increased in the last week, partly driven by users aiming to get points that will later be used for an airdrop
The rise in FriendTech has attracted over 100k users (or rather unique Twitter profiles) within weeks of launching. This has led Base to grow a broad reach of retail users, feeding into Coinbase’s strengths.
Layer 2 Comparison — Ethereum’s L2 ecosystem is evolving with players becoming more specialized in their own niche
- Base has quickly become the L2 with the most unique addresses and transactions, fueled by Coinbase’s wide reach, making it a strong candidate for social applications like FriendTech to thrive
- Arbitrum continues to dominate in terms of transaction volume, having the most liquid DEXs and highest TVL in DeFi applications in general
- Optimism has been embracing its superchain vision, with the OP Stack becoming adopted as the underlying infrastructure of other L2s such as Mantle (formerly BitDAO) and Base itself
Overall, the Ethereum L2 space has become one of the more exciting areas in the crypto market. As L2s try new approaches and scale further, we are likely to continue seeing more innovative applications such as FriendTech drive broader adoption into crypto.
