Friend.Tech’s FRIEND Price Analysis After Launch

On Friday, decentralized social platform Friend.Tech airdropped its native token, FRIEND, and unveiled version 2 of the platform, featuring new additions such as the Money Club. Upon its initial trading on Base, the token’s price surged to $169 but swiftly plummeted to $2.5, according to data from DEXscreener.

The Largest Airdrop Recipient Dump FREIND on Launching Day

The largest recipient of Friend.Tech's FRIEND airdrop liquidated all his token holdings just hours after receiving them, raising concerns about the potential impact on the token's market value. Consequently, the FRIEND token suffered another steep decline, plummeting 52.5% from $3.26 to $1.32. However, according to DEXscreener, FRIEND price surged to $169 but swiftly plummeted to $2.5.

Source: DEXscreener

Liquidity Issue

Hitesh Malviya, founder of crypto analytics platform DYOR, told CoinDesk that the recent price drop appears to be driven by liquidity issues, similar to what happened with Renzo last week. Liquidity refers to the market's ability to process large orders without significant price fluctuations. In a market with low liquidity, a few large transactions can disproportionately affect the market price.

The price volatility is primarily due to liquidity problems. When liquidity is low, large buys and sells can significantly impact prices. A member of the crypto community criticized Friend.Tech's handling of liquidity, saying: 

"This has to be a joke. Friend.Tech only added $0.01 in liquidity. First, they milk users with fees, then they have them add liquidity so they can dump on each other. Top class team here."

Concentrated Airdrop and Claiming Issue

On 27 April, the platform captured a snapshot for the highly anticipated 100% FRIEND airdrop. However, several users have reported difficulties in claiming their airdrops. "I'm not selling my FRIEND airdrop because I can't even claim it," stated Reetika Malik, a Dubai-based crypto analyst and trader, on X.

Hitesh Malviya, founder of DYOR, described the airdrop as "concentrated," with leading creators receiving the bulk of the supply. "Most users received an airdrop ten times smaller than expected, leading many to not claim their portion since it's less than $200 for most retail investors," Malviya explained in a direct message to CoinDesk on X. "Meanwhile, a few individuals ended up making a significant amount. It's a clear case of a very concentrated airdrop where leading creators took the majority, leaving retail investors in the lurch."

V2 and TVL Drop

Source: DefiLlama

Friend.Tech launched in August last year as an invite-only platform on Coinbase's Ethereum-based layer-2 blockchain, Base. It features a point system that rewards user engagement. The platform's version 2 introduces the Money Club, a new feature designed to provide an exclusive space for financial discussion and networking, complemented by an updated point system. 

As of now, Friend.Tech holds crypto assets valued at $15 million, which is more than 70% below its early October peak of $52.04 million, reports DeFiLlama.