Tech
Why Friend.Tech’s FRIEND Token Crashed After Crypto Airdrop
Friend.Tech, a decentralized social media platform, has launched its much-anticipated launch of cryptocurrencies.
Shortly after its introduction, the FRIEND token experienced a significant price drop as the platform launched its latest version, Friend.Tech V2.
Friend.Tech releases Airdrops and FRIEND tokens
On May 3, Friend.Tech has deployed its native tokenFRIEND and introduced version 2 of the platform, with new additions such as Money Club. Soon after the start of trading on Base, the price of the token rose to $169, only to drop sharply to $3.26.
The largest recipient of the launch of cryptocurrencies on Friend.Tech liquidated all of its token holdings within hours of receiving them, raising concerns about the impact on the token’s market value. As a result, the FRIEND token suffered another 52.5% drop from $3.26 to $1.32.
The unstable price movements appear to arise from liquidity problems. Liquidity is the market’s ability to handle large purchases and sales without significant price changes. In markets with low liquidity, a small number of large transactions can disproportionately influence the market price.
“This must be a joke, Friend.Tech only added $0.01 in liquidity. So first you milk your users with fees, then ask them to add liquidity so they can offload each other. There is a top-notch team here,” said a member of the crypto community.
To know more: What is Friend.Tech? A deep dive into the Web3 social media app
FRIEND Price trend. Source: TradingView
Despite the controversy, Friend.Tech is the ninth largest protocol on the Base network with a total value locked (TVL) of approximately $28 million.
The introduction of the Money Club in V2 aims to renew interest as communities can now manage shared treasuries. Other features include customizable engagement metrics in chats to improve user interaction. These improvements allow Friend.Tech to not only increase platform usage, but also regain its competitive advantage in decentralized social networks.
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