This article is more than six months old

Friend.tech’s summer boom translates to 20% of Base transaction fees

Friend.tech’s summer boom translates to 20% of Base transaction fees
Markets
Friend.tech is responsible for almost 20% of Base's total transaction fees. Credit: Rita Fortunato/DL News
  • friend.tech is an app on Base that enables users to speculate on the popularity of personalities on X, formerly Twitter.
  • The platform also functions as a private chat room between influencers and their followers.
  • friend.tech has gained a significant amount of ground in a short period of time, with the app generating one-fifth of Base's fee revenue in a recent seven-day period.

Friend.tech has been a smash hit with crypto users since it launched in early August — a Dune data dashboard from OP Labs shows that the platform accounted for over 21% of Base’s total transaction fees.

The data, which spanned over a recent seven-day period, highlights the speedy rise since the summer of the Ethereum layer 2 rolled out recently by US crypto exchange Coinbase.

Friend.tech, which allows users to buy and sell shares linked to accounts on X, formerly Twitter, is the most-used application on Base. The second most-used app, cross-chain communication protocol LayerZero, only accounts for 3.4% of Base’s transaction fees.

Despite still being in beta, friend.tech has accrued almost $27 million in fees in the last 30 days, according to DefiLlama, and has over $52 million in crypto locked on the platform. The app is currently pushing 7,160 ETH, or about $12.3 million, in daily trading volume.

Friend.tech’s success took its two-person team by surprise. Pseudonymous friend.tech co-founder 0xRacer told Decrypt in August that he and his colleague had “initially shared the app to start load testing and didn’t expect it to go viral.”

The duo was busy fixing the app’s infrastructure and had little time to work on its economic model, the co-founder said at the time.

There are sceptics. Pseudonymous DefiLlama analyst and developer 0xngmi said that the software has vulnerabilities that may pose risks to users, arguing that was “possible to steal [users’ keys] or all funds with a front-end update.” Friend.tech has not yet responded to DL News’ request for comment.

“While DeFi has demonstrated immense potential in the space, the market also wants use cases beyond purely financial applications,” Base creator Jesse Pollak told DL News. “The demand is evident. While it’s challenging to predict the long-term sustainability of any tech platform, if friend.tech continues to adapt and evolve with industry trends, it stands a good chance of maintaining its momentum.”

Join the community to get our latest stories and updates

How friend.tech works

In effect, users are able to speculate on the popularity of eligible X accounts.

Popular X accounts are likely to see their shares, or “keys,” as they’re known, rise in price, since they can count on their numerous X followers to register on friend.tech and buy in. Smaller X accounts, meanwhile, may present growth opportunities.

By purchasing an account’s key, users unlock a keyholder-only chat room in which they can directly message the account’s owner.

Friend.tech therefore not only functions as a speculative project, but as a crypto native social media platform. The priciest keys currently belong to Vombatus, which are trading for 8.123 ETH (a little over $14,000).

Key sales and purchases incur a 10% fee, which is divided equally between friend.tech and the account owner. The more frequently an account’s keys are traded, the more fees that account will accrue. According to data from parsec, the account with the most accrued fees is friend.tech co-founder 0xRacer’s, with 254.19 ETH (roughly $440,000) raked in so far.

By interacting with the platform, users accrue points, which the platform distributes to its users on a weekly basis.

“Points will have a special purpose once the beta ends,” friend.tech has posted on social media — prompting speculation of a token airdrop.

Tom Carreras is a markets correspondent at DL News. He is based out of Costa Rica. Got a hot tip? Reach out to him at tcarreras@dlnews.com

Related Topics