Users decried the friend.tech airdrop claims process as the token tumbled from a sharp spike as high as $167 and crashed from its opening price of $10.
SocialFi project friend.tech debuted its native token FRIEND on May 3 with an airdrop to users, along with version 2 of its protocol previously announced last month. The platform launched last year on Base, Coinbase’s Ethereum (ETH) L2 network, offering an invite-based community through “keys”, a custom ERC-20 social token type.
Shortly after FRIEND launched, DEX Screener data showed a 98% plunge in the token’s price and little liquidity. Token liquidity allows traders to buy or sell assets on the market, essentially enabling trading. Small liquidity caps can result in massive price swings since large orders will have a greater impact.
A Messari analyst noted that friend.tech’s team initially added a liquidity level far disproportionate to the amounts collected in fees.
Users also pointed out that the claim portal was clunky, resulting in successful claimants selling large chunks of the token and driving prices down while others could not collect the airdrop.
FRIEND declined from $10 to under $2, but liquidity had improved. At press time, crypto.news noted over $8.3 million in liquidity while FRIEND’S 14.5 million supply supply held a $67 million market cap. The token also had over 20,000 holders and counting.
While liquidity improved and the number of holders increased, sellers still outmatched buyers by over 2,000. Coinbase Director Conor Grogan remarked that the friend.tech token launch presented a case study on airdrop culture, and how market participants react following distribution.
“The FriendTech airdrop is interesting because we get onchain proof of everyone’s trading acumen in an identity-linked way in about as good a natural experiment as you will ever get.”
Conor Grogan, Coinbase Director