Base, a new Ethereum Layer 2 (L2) solution developed by Coinbase, has recently surpassed Ethereum’s daily transaction volume, hitting a rate of 16 transactions per second. This achievement, according to Brian Armstrong, the CEO of Coinbase, can be largely attributed to FriendTech, a novel decentralized finance (DeFi) social application.
The driving force behind Base’s transaction surge, which outpaced Ethereum’s, is primarily the growing excitement around FriendTech, the latest DeFi app to make waves. Base, created by Coinbase, a well-known American cryptocurrency exchange platform, is positioned as an open ecosystem where individuals have the freedom to construct new decentralized applications (dApps).
.@BuildOnBase hit 16 transactions per second yesterday
— Brian Armstrong 🛡️ (@brian_armstrong) August 22, 2023
On Monday, August 21, 2023, Artemis Terminal, a digital asset analytics platform, reported that Base’s daily transaction volume had reached $1.37 million, while Ethereum’s stood at $1.01 million.
FriendTech is one of the dApps hosted on Base, specifically designed to interface with Twitter. Its main function involves the tokenization of Twitter accounts. Within this social app, users have the opportunity to buy and sell “shares” of various profiles, potentially leading to profits.
Since FriendTech’s launch, the application has managed to accumulate over $6 million in fees and has generated around $3 million in revenue, as indicated by data from Llama.
However, there have been suspicions that the enthusiasm around FriendTech and the high transaction numbers on Base might be influenced by automated bots and fraudulent activities. This concern was voiced by Ethereum researcher Evan Van Ness and Robert Miller, who holds a leadership role at Flashbots, on platform X.
Van Ness expressed, “The prevalence of bot-driven transactions makes it incredibly challenging to generate profits. There’s now a flood of FT transactions on Base for every new account that connects to it.” Miller further explained, “It appears that individuals are closely monitoring new accounts connecting to Base, and then inundating the network with purchase requests for the FT shares of those accounts.”
Income Sharks, a channel focused on cryptocurrency analysis, proposed that FriendTech’s appeal was largely driven by a fear of missing out, and not everyone participating in the app would ultimately profit. They highlighted, “In this complex ecosystem, there’s a finite pool of funds circulating, resembling elements of a Ponzi scheme.”
In summary, Base, the innovative Ethereum Layer 2 solution from Coinbase, has achieved a remarkable daily transaction volume, surpassing Ethereum, largely due to the growing popularity of FriendTech, a DeFi social app. However, concerns have been raised about potential bot-driven activities and the sustainable profitability of these endeavors.