Friend Tech copped backlash as many users struggled to claim tokens.
The freshly launched and long-awaited FRIEND token is trading at just a $25 million market cap following a launch that left many community members complaining.
On May 3, the entire supply of FRIEND became claimable alongside Friend Tech’s v2 iteration. Friend Tech v2 also introduced a native decentralized exchange, BunnySwap, a revamped networking and social platform dubbed Money Club, and a new points system.
However, with many users experiencing errors when attempting to claim their tokens, FRIEND being non-transferable except to trade on BunnySwap, and BunnySwap’s liquidity pool reportedly seeded with a single FRIEND token, the project has attracted widespread criticism.
“They’re likely going to seed with that 1 [FRIEND] and it’ll be a madhouse from there,” tweeted 0xBreadguy, a DeFi developer. “Walled garden for degens away from any exchanges, who literally can’t interact without having faked being a normal user first. It’s on-chain anarchy for the foreseeable future.”
“The Friend Tech 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 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,” said SplitCapital, a crypto analyst.
Steep price decline
According to CoinGecko, FRIEND crashed 67% over three hours to a low of $0.89 after debuting at $3.26. However, price data from DexScreener shows roughly twice as much chronological price action, including a brief spike to roughly $170 that reversed over 15 minutes.
The token has since posted a sharp bounce from its low to change hands at $1.57, still equating to a meager market cap of $25.3 million.
Luke Martin, the host of the Stacks Podcast, said they were stuck watching the value of their airdrop allocation fall from seven figures in value to five figures over two hours while unsuccessfully attempting to claim.
Martin also flagged one of Friend Tech’s larger farmers unloading six figures worth of FRIEND immediately after claiming. “This was the largest sybil on Friend Tech dumping all his points in one clip,” Martin said.
Fall from grace
Friend Tech burst onto the burgeoning SocialFi scene in August 2023. The platform allows users to buy and trade “keys” allowing access to chatrooms associated with Twitter accounts.
With prominent crypto analysts promising keyholders access to exclusive tips and alpha while also earning a 5% fee on key trades, Friend Tech rapidly emerged as a booming web3 platform.
Friend Tech also earns a 5% fee on key sales, driving $1 million in daily revenue as volume peaked above $20 million in September, according to Dune Analytics. However, activity on the platform has since collapsed, with volume slumping to an all-time low below $60,000 on March 2.
Data from Dune Analytics also shows daily users dipping below 1,000 in April, marking a pullback of more than 99% from its October high of nearly 74,000.
Still, the platform enjoyed a minor recovery over the past six weeks after Friend Tech’s March 22 announcement it would soon distribute FRIEND tokens to points holders alongside the launch of its v2 iteration.
Volume briefly spiked back to $7 million in April as active users posted a local high of 4,000. However, less than 1,500 users drove under $410,000 worth of trades daily during the final week of April as activity dried up again.
According to 0xBreadGuy, Friend Tech will earn a 1.5% fee on Money Clubs, a 1.5% fee on Bunnyswap trades, and 5% on Friend Tech key swaps from its v2 iteration.
Friend Tech creators will also continue to take a 5% fee on key swap, and share of referral fees. Liquidity providers will also earn a 1.5% fee on trades.
