Token tanks 98% after airdrop not delivered

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, the well-intentioned initiative turned into a cautionary tale, with the token’s price registering a dramatic nosedive and user frustration reaches its peak.

Friend.tech: Building a Social Network on Blockchain

Launched in 2023, Friend.tech is positioned as a Web3 social media platform that leverages blockchain technology to promote 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 based on the ERC-20 standard, which allow communities within Friend.tech to establish their own governance and economic structures.

FRIENDLY faux pas: airdrop chaos and price collapse

On May 3, Friend.tech launched FRIEND tokens to its user base in conjunction with the rollout of protocol version 2. The initial excitement was quickly dampened when the token’s price exhibited a dizzying roller coaster ride. Rising to a high of $167 shortly after launch, FRIEND then it slumped to below $2 within a few hours.

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Analysts identify two main culprits for the collapse: liquidity problems and a sell-off frenzy. Friend.tech’s initial liquidity pool, the funds readily available for buying and selling tokens, appears to have been insufficient to handle the trading volume.

This lack of liquidity meant that even small sell orders had a huge impact on the price, quickly pushing it lower. To further aggravate the situation, a significant number of users who received airdropped tokens decided to sell them immediately, likely taking advantage of the initial price surge. This mass sell-off further depressed the price, creating a vicious cycle.

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Claiming challenges adds fuel to the fire

Adding insult to injury, the process of claiming FRIEND tokens issued on the plane proved complicated for many users. Technical issues and an unintuitive interface hampered the application process, leading to user frustration and accusations of a poorly designed rollout.

Related reading: Bitcoin Back in Bullpen: Whales Rebound with $2.8 Billion Buy

A silver lining or a statistical mirage?

Despite the initial chaos, there were some signs of life for FRIEND. Liquidity has improved slightly and the number of token holders continues to grow. However, this growth may be misleading.

Bitcoin is now trading at $63.274. Chart: TradingView

With the token’s price so low, the barrier to entry is minimal, potentially attracting new holders who are simply curious or hoping for a bounce. More importantly, the number of sellers continues to outnumber buyers, indicating a long-term lack of confidence in the value of the token.

Featured image of Pexels, TradingView chart

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