Friend.Tech’s token falls 98% following airdrop fiasco

General

Users
decried
the
friend.tech
airdrop
claims
process
as
the
token
tumbled
from
a
sharp
spike
as
high
as
$167
and
crashed
from
its
opening
price
of
$10.

SocialFi
project
friend.tech
debuted
its
native
token
FRIEND
on
May
3
with
an
airdrop
to
users,
along
with
version
2
of
its
protocol
previously
announced
last
month. The
platform
launched
last
year
on
Base,
Coinbase’s
Ethereum
(ETH)
L2
network,
offering
an
invite-based
community
through
“keys”,
a
custom
ERC-20
social
token
type.

Shortly
after
FRIEND
launched,

DEX
Screener
data
showed
a
98%
plunge
in
the
token’s
price
and
little
liquidity.
Token
liquidity
allows
traders
to
buy
or
sell
assets
on
the
market,
essentially
enabling
trading.
Small
liquidity
caps
can
result
in
massive
price
swings
since
large
orders
will
have
a
greater
impact.

A
Messari
analyst

noted
that
friend.tech’s
team
initially
added
a
liquidity
level
far
disproportionate
to
the
amounts
collected
in
fees.

“It’s
free
money
bro
why
is
CT
upset”

Um,
it
wasn’t?
Users
paid
$60
million
in
fees,
and
$30
million(!!!)
of
that
was
extracted
by
Friendtech.

So
collectively,
users
paid
$30m
in
farming
costs
for
a
token
that
has
a
liquidity
pool
of
only
$3m
ETH
liquidity…

pic.twitter.com/aCrpmVUaNQ

—
Average
Joe’s
Crypto
(@AvgJoesCrypto)

May
3,
2024

Users
also

pointed
out
that
the
claim
portal
was
clunky,
resulting
in
successful
claimants
selling
large
chunks
of
the
token
and
driving
prices
down
while
others
could
not
collect
the
airdrop.

Watching
the
value
of
my
airdrop
go
from
7
figs
to
5
figs
in
the
span
of
2hrs
while
I
keep
refreshing
the
page
trying
to
claim….still
can’t
claim.

Meanwhile
I
gotta
watch
this
guy
cashout
while
my
wallet
won’t
even
load.

Adds
insult
to
injury
💀💀💀

—
Luke
Martin
(@VentureCoinist)

May
3,
2024

FRIEND
declined
from
$10
to
under
$2,
but
liquidity
had
improved.
At
press
time,
crypto.news
noted
over
$8.3
million
in
liquidity
while
FRIEND’S
14.5
million
supply
supply
held
a
$67
million
market
cap.
The
token
also
had
over
20,000
holders
and
counting.

friend.tech — FRIEND
token
data
after
airdrop
|
Source:
DEX
Screener

While
liquidity
improved
and
the
number
of
holders
increased,
sellers
still
outmatched
buyers
by
over
2,000.
Coinbase
Director
Conor
Grogan
remarked
that
the

friend.tech
token
launch
presented
a
case
study
on
airdrop
culture,
and
how
market
participants
react
following
distribution.

“The
FriendTech
airdrop
is
interesting
because
we
get
onchain
proof
of
everyone’s
trading
acumen
in
an
identity-linked
way
in
about
as
good
a
natural
experiment
as
you
will
ever
get.”

Conor
Grogan,
Coinbase
Director