Coin Edition -
- Crypto users have decried the drop in the price of the recently launched FRIEND token.
- FRIEND dropped by 98% shortly after its debut amid glitches in the airdrop claim process.
- An analyst identified a significant imbalance between the added liquidity and collected fees Friend.tech.
Several crypto users have decried the unprecedented drop in the price of the recently launched FRIEND token of the blockchain SocialFi project friend.tech. Most users involved in the project’s airdrop complained about the claim process as they watched the newly launched token drop by 98% shortly after its debut.
Friend.tech launched last year on Base, the Coinbase (NASDAQ:COIN) Ethereum L2 network, offering an invite-based community via a custom ERC-20 social token, “Keys.” However, the project’s native token, FRIEND, debuted on May 3 with an airdrop to users.
Data from DEX Screener showed that FRIEND/WETH dropped from $169.09 to $0.5293 shortly after launching. In addition, users observed a significant drop in the token’s liquidity, exposing it to massive price swings and increased volatility.
Following the unusual behavior, a Messari analyst identified as Average Joe’s Crypto on X noted an imbalance between the added liquidity and collected fees on the newly launched platform. According to the analyst, the friend.tech’s team added a liquidity level disproportionate to the amounts collected in fees. He highlighted that users paid $30 million in farming costs for a token that has a liquidity of $3 million.
Some other users complained about the clunky nature of the tokens claim portal. Hence, it allowed successful claimants to sell large chunks of the tokens, resulting in plunging prices while others struggled with claiming their airdrops. One user noted that he watched the value of his airdrop go from seven figures to five figures within two hours while watching others cash out significant claims.
Conditions appear to have improved for FRIEND as of the time of writing, as the token’s price posted a rebound to trade for $1.68, according to data from DEX Screener. The token’s liquidity also reflected significant improvement, showing a value of $17.5 million, with a market cap of $140 million.
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