Friend.tech Co-Founder Hints at Departure From Base, Token Falls 30%

Friend.tech co-founder, pseudonymously known as Racer, has hinted at leaving Base, an Ethereum Layer-2 network launched by Coinbase in 2023 that supports the platform.

Following the news, Friend.tech’s token fell sharply and is now trading at $1.02, with a 31.4% drop over the past day.

Racer posted on X about a system design bounty offering a $200,000 reward to anyone who could devise a method for migrating Friend.tech off of Base without causing significant disruptions for users. The reward would be given if the solution proved effective enough for adoption.

The only way to migrate is to get everyone to sell their keys, have treasury reimburse losses, then start new

GG to this fee farm. $FRIEND at $1, almost no organic users, and Racer wants off base. Still holding a bag as I fell for the $FRIEND to ten psyop 😭 pic.twitter.com/39tRVb5mmM

— AzFlin (@AzFlin) May 26, 2024

Racer said the relationship between the Friend.tech team and Base has been strained. In another post, they mentioned that the project faced backlash from Farcaster investors during its launch, which led to a deteriorating relationship and a sense of exclusion from the Base community.

In response, Jesse Pollak, who heads Base for Coinbase, made a diplomatic post. Pollack acknowledged that Friend.tech’s team had felt “isolated and disconnected” from certain parts of the Base and Ethereum ecosystems.

Pollack added that he would be sad if Base decided to leave but would still respect and support their chosen path.

Base Network’s Surging Activity

Friend.tech launched in August 2023, quickly generating hype and attracting both supporters and critics. The decentralized social network, built on Ethereum’s layer-2 scaling network Base, allows users to buy and sell “keys” linked to Twitter accounts.

Coinbase’s Q1 report highlighted that trading volume on the Layer 2 network surpassed that of its competitors, especially following Ethereum’s Dencun upgrade. The growth has been driven by popular projects launching on the network, such as Friend.tech and meme coins such as dogwifhat (WIF), Book of Meme (BOME).

DeFi crypto exchanges on Base experienced daily trading volumes exceeding $1 billion, significantly narrowing the gap between the L2 and Coinbase’s main centralized exchange, which trades nearly 250 cryptocurrencies.

The Dencun upgrade rapidly increased Base’s daily transaction volume and revenue, allowing it to outpace established players like Optimism and Arbitrum. This upgrade reduced costs for Layer-2 scaling chains like Base, resulting in increased user engagement and transaction volume.

According to Dune Analytics, there are currently 234,199 active addresses on Base, with 38,087 new addresses this week. Meanwhile, the network’s total profit is $42.7 million, and its total revenue is $58.67 million.