As an analyst with a background in blockchain technology and social media platforms, I’ve followed Friend.tech’s journey closely. The team behind this project had noble intentions of creating a decentralized social media platform using Ethereum blockchain. However, the recent airdrop and token price crash serve as a cautionary tale for the crypto community.
Friend.tech, the Ethereum-based social media platform, intended to mark the debut of its protocol version 2 by distributing its native token, FRIENT, through an airdrop. Unfortunately, this noble endeavor took a turn for the worse as the token’s price plummeted dramatically and user dissatisfaction escalated to alarming levels.
Friend.tech: Building A Social Network On Blockchain
Introduced in the year 2023, Friend.tech functions as a social media platform on the web that harnesses the power of blockchain technology to create a more “genuine” and “decentralized” digital environment for its users.
Friend.tech operates a distinct “invite-only” system where users are granted access via exclusive invitations. These invites function as social tokens adhering to the ERC-20 standard, enabling communities on Friend.tech to set up their own governance and economic frameworks.
FRIENDly Faux Pas: Airdrop Chaos And Price Plunge
On May 3rd, Friend.tech distributed FRIFriend tokens to its community in correlation with the introduction of their version 2 protocol. However, the initial elation was short-lived as the token’s price experienced extreme volatility. Reaching a peak price of $167 immediately following the airdrop, FRIFriend then drastically dropped below the $2 mark within just a few hours.
“It’s free money bro why is CT upset”
As an analyst, I’d rephrase it this way: I was taken aback to discover that users collectively paid $60 million in fees. Strikingly, Friendtech alone pocketed an astonishing $30 million from those fees.
Together, users have spent a total of $30 million on farming costs for a token, yet its Ethereum liquidity pool amounts to just $3 million.
— Average Joe’s Crypto (@AvgJoesCrypto) May 3, 2024
As a crypto investor, I’ve come to understand that recent market turbulence can be attributed to two main factors: inadequate liquidity and a wave of panic selling. In simpler terms, Friend.tech’s initial pool of liquidity – the funds readily available for buying and selling tokens – seems to have been inadequate to manage the trading volume effectively.
The scarcity of available liquidity caused minor sell orders to significantly influence the price, causing it to drop rapidly. Additionally, a large proportion of users who received distributed tokens chose to sell them promptly, potentially taking advantage of the initial price surge. This wave of selling intensified the downward trend, resulting in a self-reinforcing cycle of declining prices.
— MaxBid24 (@MaxBid24) May 3, 2024
Claiming Challenges Add Fuel To The Fire
Instead of “Adding insult to injury,” you could also say “Making matters worse” or “Compounding the problem.” So, “Making matters worse, the process for claiming airdropped FRIEND tokens reportedly proved difficult for many users.” Technical issues and a confusing interface complicated the claiming process, resulting in user irritation and allegations of a poorly executed launch.
A Silver Lining, Or A Statistical Mirage?
Although FRIEND experienced some turbulence at first, it has shown promising developments. The liquidity situation has become less dire, and the community of token holders has expanded. Yet, this expansion may not be as genuine as it seems.
As an analyst, I would interpret it this way: With the token’s price being relatively low at the moment, the threshold for investment is quite small, making it an attractive option for newcomers who are either intrigued or optimistic about a potential rebound. However, it’s crucial to note that the selling activity outnumbers buying activity significantly. This imbalance suggests that many holders lack faith in the token’s long-term value and could be selling off their holdings.
Read More
- SOL PREDICTION. SOL cryptocurrency
- USD PHP PREDICTION
- USD COP PREDICTION
- BTC PREDICTION. BTC cryptocurrency
- TON PREDICTION. TON cryptocurrency
- Strongest Magic Types In Fairy Tail
- ENA PREDICTION. ENA cryptocurrency
- LUNC PREDICTION. LUNC cryptocurrency
- AAVE PREDICTION. AAVE cryptocurrency
- OSMO PREDICTION. OSMO cryptocurrency
2024-05-04 17:12