I have a chrome extension that has been basically making me pretty good passive income. Just recently someone else came along and wrote the same extension, but he's offering it for free.
Should I be worried? Are there any things I can do?
Is the copycat extension any good? If yours works better, and/or delivers more value, then people will likely still choose to buy yours.
Perhaps you could add another sought-after feature. I think the key is to always be one step ahead in terms of the value you deliver vs copycats.
If you don't think it's worth the effort of staying one step ahead, then an alternative plan would be to start working on something else...