Is Base’s “Onchain Summer” Turning to Winter?
In August 2023, Coinbase-backed Ethereum Layer 2 protocol, Base, emerged and quickly gained popularity. The platform’s success was often attributed to Friend.tech, a social protocol built on Base that accounted for almost half of the gas fees spent on the Layer 2 chain. However, despite Friend.tech’s contributions, Base’s growth has recently slowed down.
While Friend.tech continues to experience growth in total value locked (TVL) and revenue, Base’s TVL has seen a significant decline in the past week. This decoupling indicates that relying solely on the popularity of Friend.tech will not be enough to sustain Base’s rise as a Layer 2 chain.
Friend.tech’s Revenue Soars Amidst Criticism
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Despite the criticism surrounding it, Friend.tech has seen a skyrocketing increase in revenue. This demonstrates that while some may question its impact on Base’s success, it continues to generate significant profits.
Crypto Outflows Break Streak Amid U.S. Government Shutdown Fears
In other news, the cryptocurrency market has experienced a break in its outflows streak due to concerns over a potential U.S. government shutdown. As investors seek alternative assets amidst uncertainty, cryptocurrencies have become an attractive option.
Hot Take: Will Base’s Momentum Last?
Base’s recent decoupling from Friend.tech raises questions about its sustainability as a Layer 2 chain. While Friend.tech has played a significant role in Base’s initial success, it seems that additional factors will be necessary for Base to maintain its growth trajectory. The cryptocurrency market is constantly evolving, and it remains to be seen whether Base’s “Onchain Summer” will turn into a winter of stagnation or if it can find new avenues for growth.
