Friend.tech Token Plunges After Launching V2 and Airdropping Tokens
Friend.tech, a decentralized social platform based on Base, became a hot topic during the May Day holiday. On May 3rd, it launched its V2 version and also airdropped its native token, FRIEND.
However, the airdrop, which was expected to generate excitement and goodwill for the project, instead received mockery from the crypto community. DexScreener data shows that FRIEND experienced a nearly 98% drop in price after going live, plummeting from around $169 to around $3.26 at one point. According to CMC data, the token even dropped to a minimum of $0.8 before climbing back up to its current price of $2.53. Let’s take a look at the details of the Friend.tech airdrop event.
Further reading:
Turning Social Connections into Companies and Community Influence into “Shares”! What is “Friend.tech,” the Platform that Raised $1.5 Billion in Funding?
Airdrop yields much lower than expected, and distribution is too “concentrated”
After the FRIEND airdrop, some analysts criticized the distribution mechanism, claiming that creators received a larger share of the tokens compared to retail investors. Hitesh Malviya, the founder of crypto analysis platform DYOR, stated that this distribution was a case of “concentrated airdrop.”
“Most users received 10 times less than they expected in the airdrop, so many of them didn’t even bother claiming it because the amount was less than $200 for most retail investors. At the same time, very few people ended up profiting significantly, so it’s a very concentrated airdrop case.”
Further reading:
1500% User Growth in Two Weeks! Why is Friend.tech Exploding in Popularity? Who is the Founder? Netizens Dig Up the Dark Past
Largest recipient of the airdrop quickly sold off, leaving some users unable to claim
The largest recipient of the airdrop on Friend.Tech sold off all their tokens within hours after the airdrop, causing concerns in the market. Blockchain data shows that the biggest whale, “Murphys1d,” sold over 55,000 FRIEND tokens shortly after the airdrop went live, leading to an initial price drop of about 50%. The whale’s selling triggered panic selling in the market, resulting in further declines.
During this period, some users complained about API failures that prevented them from claiming tokens as the price dropped. Crypto trader Luke Martin stated on X platform, “I kept refreshing the page trying to claim, watching the value of my airdrop go from seven to five figures within two hours, but couldn’t claim it.”
Researcher 0xCygaar pointed out that the surge in traffic overloaded Friend.Tech’s backend, and it was apparent that no scaling measures were taken. The proof-of-eligibility checks also experienced failures, leading to tutorials on manually claiming airdrops from the contract using the browser-based BaseScan.
Even those who successfully claimed the tokens had grievances as the price dropped by 46% from $2.78 to $1.49 within less than four hours. The community believes that besides being non-transferable except on BunnySwap, the developers’ addition of only $0.01 liquidity was the main factor for the rapid price decline.
Club feature also faces criticism
Friend.Tech was initially launched in August 2023, offering an invitation-only service with a reward points system. The V2 version introduced new features such as Money Club and a new points system. Money Club provides users with an exclusive space for financial discussions and communication, while the new points system rewards users for their contributions and interactions on the platform.
However, the Club feature also received criticism from some users. On one hand, in order to drive traffic to the Club feature, the airdrop design only allowed users to directly claim 10% of the airdrop. To receive the full airdrop, users had to join the “Money Club” and follow 10 users on v2. There were also some bugs in the software, with users reporting that newly created Clubs were not showing up. Additionally, Friend.Tech quietly integrated its own exchange (RabbitRouter + BunnySwap) into the app, charging a 1.5% transaction fee, as pointed out by Ethereum investor @eric.eth.
According to Dune data, since the release of V2 on May 4th, there have been 112,346 Clubs created, with a total transaction volume of 16,899,404 FRIEND and Club fees amounting to 252,651 FRIEND.
It’s worth mentioning that despite the “poor” performance of the Friend.tech token, some whales have made profits. According to Lookonchain monitoring on May 5th, the top 5 buyers of FRIEND have accumulated a total profit of $2.89 million.
Furthermore, according to The Data Nerd, three days ago, a savvy investor with the address 0xA26 spent $1.18 million to accumulate 732,000 FRIEND tokens at an average entry fee of $1.61, currently resulting in an unrealized profit of approximately $807,000.
Despite the controversies, Friend.tech remains an important player in the Web3 social media field, and only time will tell if it can continue to lead the SocialFi wave.