Good friend.tech, a social media platform constructed on the Ethereum blockchain, aimed to rejoice the launch of its model 2 protocol with an airdrop of its native token, FRIEND. Nonetheless, the well-intentioned initiative was a cautionary story, with the token’s value experiencing a dramatic nosedive and consumer frustration reaching a fever pitch.
Good friend.tech: Constructing A Social Community On Blockchain
Launched in 2023, Good friend.tech positions itself as a Web3 social media platform that leverages blockchain know-how to foster a extra “genuine” and “decentralized” on-line expertise.
The platform makes use of a novel “key” system, the place customers achieve entry by way of unique invitations. These “keys” are primarily social tokens constructed on the ERC-20 customary, permitting communities inside Good friend.tech to ascertain their very own governance and financial constructions.
FRIENDly Fake Pas: Airdrop Chaos And Worth Plunge
On Could third, Good friend.tech airdropped FRIEND tokens to its consumer base together with the model 2 protocol rollout. Preliminary pleasure was rapidly dampened because the token’s value exhibited a dizzying rollercoaster trip. Hovering to a excessive of $167 shortly after launch, FRIEND then plummeted to a price beneath $2 inside a matter of hours.
“It’s free cash bro why is CT upset”
Um, it wasn’t? Customers paid $60 million in charges, and $30 million(!!!) of that was extracted by Friendtech.
So collectively, customers paid $30m in farming prices for a token that has a liquidity pool of solely $3m ETH liquidity… pic.twitter.com/aCrpmVUaNQ
— Common Joe’s Crypto (@AvgJoesCrypto) Could 3, 2024
Analysts level to 2 major culprits behind the crash: liquidity points and a sell-off frenzy. Good friend.tech’s preliminary liquidity pool, the available funds for purchasing and promoting tokens, seems to have been inadequate to deal with the buying and selling quantity.
This lack of liquidity meant that even small promote orders had an outsized influence on the value, pushing it down quickly. Additional exacerbating the state of affairs, a big variety of customers who obtained airdropped tokens opted to promote them instantly, probably capitalizing on the preliminary value spike. This mass sell-off additional depressed the value, making a vicious cycle.
pic.twitter.com/6ejMbaCLXf
— MaxBid24 (@MaxBid24) Could 3, 2024
Claiming Challenges Add Gas To The Hearth
Including insult to harm, the method for claiming airdropped FRIEND tokens reportedly proved cumbersome for a lot of customers. Technical glitches and an unintuitive interface hampered the claiming course of, resulting in consumer frustration and accusations of a poorly designed launch.
Associated Studying: Bitcoin Again In The Bullpen: Whales Spark Rebound With $2.8 Billion Buy
A Silver Lining, Or A Statistical Mirage?
Regardless of the preliminary chaos, there have been some indicators of life for FRIEND. Liquidity has improved considerably, and the variety of token holders continues to develop. Nonetheless, this development could be deceptive.
Bitcoin is now buying and selling at $63.274. Chart: TradingView
With the token value so low, the barrier to entry is minimal, probably attracting new holders who’re merely curious or hoping for a rebound. Extra importantly, the variety of sellers continues to outpace consumers, indicating a scarcity of long-term confidence within the token’s worth.
Featured picture from Pexels, chart from TradingView
