FRIEND Volatility
On Friday night, crypto-enabled chatroom friend.tech unveiled that it would be deploying its own blockchain solution. The fair-launch token has been sliding down drastically over the past several weeks despite some high-conviction bets from whales.
It appears investors aren't quite sure to think of the announcement of a migration from Base. FRIEND was making new all-time lows at $0.64 midday Friday, but a late evening announcement catalyzed a further run-up to $0.88 before aggressively sliding backward throughout the remainder of the weekend to a new all-time low at Monday morning, and then rocketing back up to $0.78 at the time of publication.
Fellow Base project, the Farcaster-native memecoin DEGEN, publicly announced and launched its own L3 envisioned to foster experimentation across a myriad of DEGEN-enabled applications at the end on March 28. That deployment succeeded in bolstering DEGEN price, as all ETH bridged to the L3 is automatically swapped into its DEGEN gas token, but the token currently rests 70% off all-time highs set on April 1, meanwhile various onchain metrics have tumbled from this date.
Novel chain deployments can incite temporary bumps in token price, particularly when they create novel token utility and forcibly swap bridgers into it, however, the mere creation of infrastructure is no guarantee that token will continue to pump.
SocialFi projects, including friend.tech, have been plagued by low usage statistics, and while it is likely FRIEND price gains on rollup deployment, the new chain must spark renewed excitement in the ecosystem for it to be a sustainable catalyst. Previous rollup deployments and friend.tech’s prior V2 upgrade have been unable to accomplish such feats, casting doubts on the potential long-term benefits of this new chain in the absence of new adoption, which is unlikely to occur due to the seemingly unsustainable nature of friend.tech’s financialization.
Jack Inabinet