The highly anticipated launch of the native token of the Friend.Tech platform was supposed to be a milestone to remember. It surely was, but not the way users probably expected as the fresh-out-of-the-oven FRIEND token saw its price collapse shortly after the community-centered airdrop hit users’ wallets.

The airdrop coincided with the rollout of the Friend.Tech V2 platform. However, technical issues plagued the event as users were unable to claim their rewards, causing the price of FRIEND to lose more than 90% of its value in just a few hours.

Also read: Inside Saga Protocol’s $10M Airdrop and 2 Upcoming Airdrops You Don’t Want to Miss

The failed airdrop triggered a significant backlash among community members who rushed to voice their discontent on the social media platform X. However, some did reap attractive rewards by dumping thousands of tokens on unwary investors who probably thought that the FRIEND token would rapidly recover from these issues.

Friend.Tech Pledged to Distribute 100% of its Native Token Among its Users

On May 3rd, FriendTech executed one of the crypto world’s largest ever airdrops, freely distributing 100% of its new FRIEND token supply directly to existing users of its platform.

This distribution model differed from the industry’s typical standard, which involves reserving a substantial portion of the token’s circulating supply for investors, founders, developers, and other purposes.

The new Friend.Tech V2 platform introduced new features like “Money Clubs” that could be used to create exclusive paid networking spaces as well as an on-platform decentralized exchange called BunnySwap for trading FRIEND and other assets.

Also read: Best DeFi Exchanges in 2024

If you have checked crypto X (formerly Twitter) in the past few days or weeks you have probably heard quite a bit about Friend tech and the upcoming token airdrop. In the weeks leading up to the launch, FriendTech had been aggressively promoting the FRIEND airdrop through its network of influential users and creators.

This created significant hype and heightened expectations among community members, with the platform seeing a spike in activity as people positioned themselves to receive a share of the soon-to-be-minted tokens.

The prospect of receiving a significant number of freely distributed tokens was meant to embody the platform’s ethos of decentralized social ownership and community-focused rewards.

Top influencers had been promoting the airdrop enthusiastically to their followers and to outside observers it seemed like it was set to succeed.

Technical Troubles Prevent Users from Claiming Their FRIEND Tokens

Despite the promising marketing, as the FRIEND token distribution process began on May 3 (launch day), a significant portion of Friend.Tech’s users encountered various technical problems that prevented them from successfully claiming their airdropped tokens.

Numerous users took to social media platforms like X, formerly known as Twitter, to voice their frustration about the Friend.Tech app freezing during the claim process, generating incorrect proofs that led to blocked claims, or simply not loading at all to allow users to initiate their claims.

“The FriendTech claim is cooked because the app is generating the wrong proofs,” said 0x5f_eth of Ethos Network. “Doesn’t seem like everyone has the issue.”


“For [Friend.Tech’s co-founder] Racer’s final act, he’s enabled the ability for users to watch the price of $FRIEND free fall on the app without being able to load their wallet balance or claim their tokens,” commented the crypto analyst SplitCapital.

The technical issues left many frustrated users stuck watching in real-time as the newly launched FRIEND token’s price whipsawed and eventually cratered – all while being unable to actually claim the tokens they were supposed to receive. These kinds of issues are extremely common in crypto but they are almost always negative, pushing users away from the launch.

FRIEND Sees Its Price Collapse from $169 to Just $1 Within Minutes

friend price action since May 3 coinmarketcap
FRIEND Price Action – Source: CoinMarketCap

The price of FRIEND experienced extreme levels of volatility and, ultimately, faced a dramatic sell-off from the moment the token began trading live on BunnySwap.

After an initial debut at around $3.26, the token briefly spiked up to an eye-watering $169 before it came crashing down to less than $1 in just a few hours, according to data from DexScreener.

As of this morning, the FRIEND token is trading at $2.26 according to data from CoinMarketCap. Its circulating supply currently stands at 14.6 million tokens resulting in a market capitalization of $33.36 million. Meanwhile, data from BaseScan indicates that a total of 50,623 wallets currently hold FRIEND tokens, with two wallets amassing nearly 25% of the total circulating supply.

“It looks like the price dump has been driven by liquidity issues, similar to what happened with Renzo last week,” said Hitesh Malviya, founder of crypto analytics platform DYOR in an interview with Coindesk, referring to the factors that may have impacted the performance of FRIEND right after the airdrop was executed.

However, other analysts have blamed concentrated token allocations as well for the collapse of the token’s price as a significant number of FRIEND tokens were reportedly airdropped to the platform’s largest “whales”.

“This was the largest sybil on FriendTech dumping all his points in one clip,” said Luke Martin, the host of the Stacks Podcast, referring to a major token holder rapidly offloading their entire FRIEND allocation.

The largest recipient of FRIEND tokens according to analysts was named “Murphys1d”. This whale was granted 55,000 tokens during the airdrop and, just a few hours upon receiving them, he went on to dump the majority of his or her claim on the open market.

The Airdrop Distribution Heavily Favored Insiders and Whales

DYOR’s Malviya highlighted that the FRIEND distribution was “a very concentrated airdrop, where leading creators took the most supply home.” This is a nightmare for any token launch because it means that just a handful of people can decide to sell all of their tokens at once, irreparably harming the token’s price.

The top-heavy allocation allowed some top influencers like HaskaTrades and CL207 to profitably dump hundreds of thousands of FRIEND tokens within minutes of the launch. For CL207, the airdrop resulted in a $170,000 windfall despite offloading all of the tokens in a heavily illiquid market.

Also read: 10 Best Crypto Twitter Accounts To Follow – 2024 X List

Meanwhile, HaskaTrades reportedly netted $174,000 from the event after selling the tokens at an average price of $0.91.

“Most users got 10x less airdrop than what they were expecting, so they are not even claiming that airdrop, as its less than 200$ for most of the retail investors,” Malviya told CoinDesk.

“But at the same time few people ended up making a crazy amount. So its a clear case of very concentrated airdrop where leading creators took the most supply home through airdrop, leaving retail in disguise.”

Liquidity Providers Capitalized on FRIEND’s Price Volatility

At the same time, while regular users were locked out, the combination of immense trading volumes, erratic price swings, and BunnySwap’s 3% trading fees enabled major liquidity providers to rapidly accumulate lucrative rewards worth thousands of dollars in a matter of hours.

One major liquidity provider who helped seed BunnySwap posted about earning over $6,000 in combined trading fees and liquidity incentives by the end of the first day – a 10% return on their initial $60,000 liquidity provision in just eight hours of trading. This sounds about right for a new token with low liquidity but high trading volume.

With BunnySwap siphoning off 1.5% of all FRIEND trades as fees for liquidity providers, and FriendTech itself earning another 1.5% fee, the two parties reaped over $1 million in fees from the $69 million in trading volume generated on that first ultra-volatile day.

Most of these providers are either whales or insiders. This helped echo the uneven allocation of the FRIEND airdrop and prompted users to criticize the team for favoring elite participants over the platform’s regular user base.

The chaos surrounding the launch of Friend.Tech’s native token FRIEND inevitably leads analysts and crypto enthusiasts to draft comparisons with past failed crypto airdrops that were defined by similar challenges like:

  • Vulnerabilities to whales and airdrop farmers who baffle the system to collect short-term profits.
  • Technical distribution problems preventing average users from claiming tokens.
  • Insufficient liquidity causing irrational pricing dislocations.
  • Disproportionate rewards for project insiders over regular users.

FRIEND Airdrop Fail Highlights the Risks Associated with Airdrops

The Friend.Tech FRIEND airdrop provides a notable case study about the risks associated with crypto token distributions and the need the implement adequate mechanisms that protect retail users from being trampled by whales and farmers.

Technical glitches, heavily concentrated allocations favoring a handful of wallets, low liquidity, and practices that favor airdrop farming behavior are real risks that can make users lose money after spending months or years supporting their favorite projects.

“This has to be a joke, friendtech only added $0.01 in liquidity, so first you milk your users with fees, then u get them to add liquidity so that they can dump on each other top class team here,” a crypto trader named mcSleuth posted in an apparent jab at FriendTech’s handling of the launch.

While the token may have had exceptionally low liquidity at the start, DexScreener data shows that FRIEND’s liquidity quickly ramped up to over $4 million. However, most of the damage had been done by then as the price had already tanked while users were mostly unable to claim their hard-earned tokens due to technical issues.

The FriendTech airdrop demonstrated how such distribution schemes can disadvantage the average user when they are not designed and executed properly. Clear and fair distribution criteria, a robust technical infrastructure, and adequate liquidity safeguards are crucial for protecting investors’ interests.