Friend.tech v2 Launch and Airdrop Sparks Controversy with Non-Transferable Token

Decentralized social media platform Friend.tech is set to launch its second version and airdrop on May 3rd. However, leaked smart contracts reveal potentially controversial features, including a non-transferable token ($POINT), which has sparked concerns among crypto enthusiasts. This token cannot be sold or exchanged, except to specific whitelisted addresses, and is intended to prevent initial airdrop selling pressure while allowing users to create social clubs on the platform.

Friend.tech's Upcoming Version 2 Launch and Airdrop Sparks Controversy with Leaked Non-Transferable Token

Decentralized social media platform Friend.tech is poised to unveil its highly anticipated version 2 (v2) and conduct an airdrop on May 3rd. However, a recent leak of its purported smart contract has raised concerns among the cryptocurrency community due to the inclusion of a controversial non-transferable token.

Leaked Smart Contract Details

According to a May 2nd X post by a pseudonymous decentralized finance (DeFi) researcher known as CBBOFE, the Friend.tech v2 smart contracts introduce a non-transferable token (NTT) as part of the airdrop. The researcher claims to have analyzed the smart contracts, revealing that the token will carry the ticker $POINT and will be non-transferable except to certain whitelisted protocol addresses.

Implications of Non-Transferable Tokens

Non-transferable tokens, unlike traditional cryptocurrency tokens, cannot be freely sold or exchanged by recipients. This means that airdrop recipients will be restricted in their ability to realize the potential value of the coins, except through the specific whitelisted protocol addresses.

Criticism and Comparisons

The inclusion of a non-transferable token in Friend.tech's airdrop has drawn comparisons to the recent controversy surrounding EigenLayer's EIGEN airdrop. EigenLayer also opted for a non-transferable token, sparking significant backlash from the community.

Kasper Vandeloock, a quantitative crypto trader and advisor at X10 exchange, believes that Friend.tech's non-transferable token is a strategy to force users to pay a 1.5% platform fee. He notes the irony of this move, given that Friend.tech has positioned itself as an anti-venture capital entity while potentially benefiting financially from the platform fee.

Utility and Functionality of the $POINT Token

The upcoming $POINT token is expected to serve as a utility token within the Friend.tech ecosystem. It will facilitate the creation of social clubs on the platform. According to CBBOFE, the creation of these clubs may incur a 1.5% platform fee.

Additionally, the $POINT tokens will be offered as rewards for users who stake their Ether (ETH) and Points tokens in the Friend.tech smart contract.

Community Concerns

The announcement of the non-transferable token has raised concerns among crypto enthusiasts. Pseudonymous crypto trader MK expressed a strong dislike for the "non-transferrable meta" that EigenLayer initiated.

Potential Benefits of Non-Transferable Tokens

While non-transferable tokens have sparked criticism, they could also have some potential benefits. By restricting the initial sale of airdropped tokens, non-transferable tokens may help mitigate excessive selling pressure and support the long-term price action of the cryptocurrency.

Historical Examples of Post-Airdrop Token Declines

In recent times, several airdrops have witnessed significant token declines following their distribution. The Omni Network's OMNI token lost 55% of its market capitalization within 18 hours of its airdrop in April. Similarly, Wormhole's W token experienced a 25% decline within hours of its airdrop.

Airdrop Hunters and Token Manipulation

Airdrop hunters, individuals who create multiple wallets to participate in multiple airdrops with no long-term commitment to the protocols, have been identified as a problem in the cryptocurrency space. They often sell their airdropped tokens for profit, contributing to post-airdrop price declines.

In March 2023, airdrop hunters were reported to have consolidated $3.3 million worth of tokens from the Arbitrum (ARB) airdrop into just two wallets, highlighting their ability to manipulate the airdrop ecosystem.

Conclusion

Friend.tech's upcoming version 2 launch and airdrop, while highly anticipated, has been overshadowed by the controversy surrounding its non-transferable token. The inclusion of this feature has raised concerns about user freedom and token value realization. While non-transferable tokens may have some potential benefits in mitigating selling pressure, it remains to be seen how the community will respond to this development in the long run.