Friend.tech, a social media platform built on the Ethereum blockchain, aimed to celebrate the launch of its version 2 protocol with an airdrop of its native token, FRIEND. However, this well-intentioned move turned into a warning as the price of the token saw a decline. dramatic fall and user frustration is reaching its peak.
Friend.tech: Building a social network on the blockchain
Launched in 2023, Friend.tech is positioned as a Web3 social media platform that leverages blockchain technology to foster a more “authentic” and “decentralized” online experience.
The platform uses a unique “key” system, which users access via exclusive invitations. These “keys” are essentially social tokens built on the ERC-20 standard, allowing communities within Friend.tech to establish their own governance and economic structures.
FRIENDly Faux Pas: Airdrop chaos and falling prices
On May 3, Friend.tech airdropped FRIEND tokens to its user base as part of the version 2 protocol rollout. Initial enthusiasm was quickly dampened when the token’s price exhibited a dizzying roller coaster ride. Reaching a high of $167 shortly after launch, FRIEND then dropped to a value below $2 in a few hours.
“It’s free money bro, why is CT upset”
Um, that wasn’t the case? Users paid $60 million in fees, of which $30 million (!!!) was extracted by Friendtech.
So, collectively, users paid $30 million in farming fees for a token with a liquidity pool of just $3 million in ETH liquidity… pic.twitter.com/aCrpmVUaNQ
– Average Joe Crypto (@AvgJoesCrypto) May 3, 2024
Analysts point to two main culprits for the crash: liquidity problems and a massive selling frenzy. Friend.tech’s initial liquidity pool, the funds readily available to buy and sell tokens, appears to have been insufficient to handle the trading volume.
This lack of liquidity meant that even small sell orders had an outsized impact on the price, driving it down quickly. What made the situation even worse was that a significant number of users who received airdropped tokens chose to sell them immediately, likely taking advantage of the initial price surge. This massive sale pushed prices down further, creating a vicious cycle.
– MaxBid24 (@MaxBid24) May 3, 2024
Claimed challenges add fuel to the fire
Adding insult to injury, the process of claiming airdropped FRIEND tokens reportedly proved cumbersome for many users. Technical issues and an unintuitive interface hampered the claims process, leading to user frustration and accusations of a poorly designed launch.
Related reading: Bitcoin Back in the Bullpen: Whales Spark Rebound with $2.8 Billion Buy
A glimmer of hope or a statistical mirage?
Despite the initial chaos, there were some signs of life for FRIEND. Liquidity has improved somewhat and the number of token holders continues to grow. However, this growth could be misleading.
Bitcoin is now trading at $63.274. Chart: TradingView
With such a low token price, the barrier to entry is minimal, potentially attracting new holders who are simply curious or hoping for a rebound. More importantly, the number of sellers continues to outnumber buyers, indicating a lack of long-term confidence in the value of the token.
Featured image from Pexels, chart from TradingView
