Friend.Tech's Native Token Plummets Post-Launch
[TL; DR]
Friend.Tech launched its version 2 platform which has boosted scalability, security and user privacy.
The Friend.Tech’s native token which debuted at a high value of $169 experienced a sharp drop within a short period.
Investors who will stake ETH on Friend.Tech smart contract will earn its utility token, POINTs.
Introduction
Friend.tech, a decentralized social platform, has turned into a leading player in the SocialFi sector. To position itself as a great competitor in the industry the protocol has initiated several activities to attract more users and serve different geographical regions. Recently, it launched its version 2 protocol and airdropped its native cryptocurrency, FRIEND. This article covers how Friend progressed with its airdrop and version 2 launch. We will also discuss its features and prospects.
Friend.Tech’s Token Debut and the Immediate Price Drop
May has become a symbolic month for Friend.Tech, a decentralized social platform based on Base, after the launch of its version 2 protocol and airdrop, aimed at attracting many users to the platform. Friend.Tech launched both its airdrop and version 2 protocol on 4 May. Although the crypto community anticipated the two developments to take Friend.Tech to the next level the SocialFi platform faced challenges with its airdrop.
DexScreener, an on-chain data aggregator focusing on real-time data analysis from multiple decentralized exchanges (DEXs), indicates that soon after Friend.Tech airdrop launch the FRIEND token price rose sharply before plummeting. The data aggregator shows that the price of the Friend.Tech native token (FRIEND) fell by 98% to US$2.50 after debuting at US$169. Bitrue also captured the moment that the FRIEND Token spiked to $169 as the following graph indicates.
Read also: Top 10 Popular NFTs in the Base Eco
FRIEND Momentary Price Spike - Bitrue
As The Graph indicates, the FRIEND price only spiked for a very short period. That is a reason why other crypto analytic firms like CoinGecko and CoinMarketCap have not indicated that the FRIEND token price ever rose to $169. For example, data on CoinGecko shows that after the launch, FRIEND’s price rose to $3.26 before falling by 48.52% from that peak.
As of now, CoinGecko indicates that FRIEND’s all-time high was $3.26 with an all-time low of $0.8332. On the other hand, its current price is 32.2% lower than its ATH. In the meantime, Base network’s contract shows that FRIEND has a maximum supply of 93,033,081.900000 and 53,779 holders.
When writing, FRIEND is trading at $2.21 after gaining by 12.1% within the last 24 hours. The token is within a bearish trend since it has lost by 4.3% within the last seven days as the next graph indicates.
FRIEND Price Movement between 4 and 12 May – CoinGecko
As observed from the diagram, FRIEND is in a ranging market as its value has been fluctuating between $1.59 and $3.04 within the last two weeks.
FRIEND Token Airdrop and Version 2 Platform Launch
After the version 2 platform launch on Coinbase Ethereum Layer2 (BASE) the decentralized social platform users experienced several problems. In fact, the protocol users reported various challenges related to the airdrop.
First, the users complained about the crypto reward that was used for the airdrop, where the creators received many more FRIEND tokens than the retail investors. The cause of such huge discrepancies was the use of a centralized airdrop distribution .
As per Odaily News, Hitesh Malviya, the founder of DYOR, a crypto analytics platform, explained the cause of such an unequitable airdrop distribution . He said, “Most users received 10 times less than they expected, so they didn’t even claim it because it was less than $200 for most retail investors. At the same time, very few people ended up making a lot of money, so it was a very concentrated case of an airdrop.”
As a result, some retail investors refused to claim the airdrop since it was below their expectations. One of such individuals is Reetika Malik, a Dubai-based crypto analyst and trader. Posting on X Malik said, “I’m NOT selling my $FRIEND airdrop (Cause I can’t even claim it).”
It is also important to note that the FRIEND crypto airdrop had strings attached to it. For example, every user could receive 10% of the airdrop without any conditions. However, to claim the rest of the airdrop a user had to join the Money Club and follow at least 10 others.
The platform also had API glitches preventing other users from claiming their FRIEND token airdrop. For example, some users had problems accessing the Money Club interface. Cygaar, a crypto investor was one of the people who experienced Friend.Tech’s backend problems are shown in the following screenshot.
Source: x.com
Liquidity Issues behind FRIEND’s Price Collapse
The retail investors and creators who successfully claimed the Friend.Tech native token airdrop faced another challenge, that of high crypto market volatility. Although the value of FRIEND rose to $169 upon its launch the cryptocurrency price drop that followed disheartened many FRIEND enthusiasts. Their hope of a sudden financial gain dithered when the FRIEND price dropped to $2.50 soon after a strong surge.
Several crypto analysts contend that the FRIEND crypto market volatility resulted from liquidity issues similar to what occurred to Renzo the previous week. The main problem was that the FRIEND token was not transferable and was only available for trading on BunnySwap. More significantly, as McSleauth confirmed on X, the developers only added $0.01 of liquidity.
Source: x.com
Insufficient liquidity meant that even small sell-orders had a big impact on the FRIEND token price fluctuation. What made the situation worse was that a large number of individuals chose to sell their airdropped tokens in response to the debut high FRIEND value. Thus, the resultant high sell-pressure led to a sharp FRIEND price drop.
Source: x.com
Introducing Version 2: New Features and the Money Club
Initially, Friend.Tech, launched in August 2023, used an invitation-only service and a reward points . Now, its V2 version launch includes new features such as the Money Club and a revised points . Notably, the Money Club Friend Tech feature has an exclusive communication and financial discussion space.
On the other hand, the revised points will reward Friend.Tech users for their engagement and other contributions on the platform. According to Dune, a data analytic platform, since 4 May, when Friend.Tech released V2 there are more than 112,346 clubs with a total transaction volume of over 16,899,404 FRIENDs. Likewise, the transaction fees have surpassed 252,651 FRIEND tokens.
In the meantime, a leaked FRIEND smart contract indicates that the decentralized social platform intends to introduce non-transferable v2 tokens. At the same time, it will also introduce a 1.5% fee for transfers with the aim of preserving FRIEND’s value. As CBBOFE has indicated on X, the users will utilize the points to buy clubs.
Source: x.com
POINTS will be a native utility token which the holders can stake and earn a reward. More significantly, POINTs will be traded on BunnySwap, Friend.Tech’s native DEX. The main function of POINTS is to enable the creation of social clubs on the platform. However, POINTS’ holders can only transfer the token to whitelisted wallet addresses which may help to preserve its value. The users will mostly earn POINTS from staking their ETH in the Friend.tech smart contract.
Engagement and Rewards: Friend.Tech’s Strategy
Friend.Tech has devised a means of rewarding its most active users like developers and content creators. To achieve that the platform has advanced tools that enable users to create and share content in a convenient manner.
Also, Friend.Tech has unique monetization opportunities for the content creators. As such, the participants can earn its native token which has real world value. The token holders can use the crypto asset to access premium services or convert their holdings to other cryptocurrencies.
What’s Next for Friend.Tech and FRIEND Token?
The recent launch of Friend.Tech version 2 has brought renewed interest in the SocialFi platform. As a result, after the launch the number of active users increased remarkably while more than 15,000 clubs have been created. However, the analysis of the data shows that most of the active users are returning members.
One of the things that is holding back the users is lack of clear communication from the Friend.Tech team. Therefore, to promote the growth of the platform and appreciation of FRIEND the team should keep in constant touch with its members to maintain their interest and motivation in the project.
The future of Friend.Tech depends on its recent airdrop and V2 upgrade which repositioned it as a leading decentralized social networking in crypto platform. Its new innovative features and community engagement will likely lead to a rise in the demand for its services and native cryptocurrency.
The highly anticipated V2 upgrade is key to user empowerment which should drive its growth. For example, the V2 upgrade has improved its scalability as well as its security and privacy which will likely elevate its usability and user satisfaction.
Conclusion
After the launch of Friend.Tech’s Version 2 and its airdrop the value of FRIEND rose to $169 before plummeting to $2.50. The main causes of the sharp price drop were insufficient liquidity and a high sell-off. The version 2 platform supports the creation of social clubs and a new utility token, POINTs. In the meantime, the users have already created over 15,000 clubs which enhance social engagement.
