Friend.tech, a decentralized social media platform, is gearing up for its version two launch and airdrop on May 3. However, a leaked smart contract suggests that the platform may introduce controversial features, including a non-transferable token. The discovery of these smart contracts was made by CBBOFE, a pseudonymous decentralized finance researcher, who shared the information in a post on May 2.
According to CBBOFE, the non-transferable tokens will be distributed during the airdrop, meaning that recipients will not be able to sell or exchange the coins, except for specific whitelisted protocol addresses. This decision to make the tokens non-transferable has caused some controversy, as it restricts the ability of users to freely trade them.
EigenLayer, a restaking protocol, has also recently opted to issue a non-transferable token for its EIGEN airdrop, which has sparked outrage within the community. This move by EigenLayer has been one of the main reasons behind the recent controversy surrounding the project.
Friend.tech’s decision to make the token non-transferable is aimed at ensuring that users pay a 1.5% fee. Kasper Vandeloock, a quantitative crypto trader and adviser at the X10 exchange, explained that the new token, POINTS, will serve as a utility token that allows for the creation of social clubs on the platform. These social clubs may incur a 1.5% platform fee.
Additionally, the new tokens will be offered as rewards for users who stake their Ether (ETH) and POINTS tokens in the Friend.tech smart contract. This incentivizes users to hold and participate in the platform, while also supporting the overall ecosystem.
While the introduction of non-transferable tokens has raised concerns among crypto enthusiasts, it could potentially have a positive impact on the long-term price action of the cryptocurrency. Historically, tokens tend to experience significant declines in value following airdrops. For example, the Omni Network’s OMNI token fell by 55% in less than 18 hours after its airdrop, losing over half of its market capitalization. Similarly, Wormhole’s W token dropped nearly 25% in value just hours after an airdrop on April 3, and is currently down over 47% since then.
One of the reasons for this decline is the presence of professional airdrop hunters, who farm multiple airdrops with different wallets and then sell the rewards on the market. By making the tokens non-transferable, Friend.tech aims to reduce the initial selling pressure that typically follows an airdrop.
In the past, airdrop hunters have consolidated millions of dollars’ worth of tokens from airdrops into a small number of wallets that they control. This practice was exposed in March 2023 when it was revealed that airdrop hunters had consolidated $3.3 million worth of tokens from Arbitrum’s ARB airdrop into just two wallets.
In conclusion, Friend.tech’s upcoming version two launch and airdrop may introduce non-transferable tokens, which has sparked controversy within the community. While this decision restricts the ability to freely trade the tokens, it aims to ensure that users pay a platform fee and reduce the selling pressure typically associated with airdrops.