Friend.tech v2 airdrop could introduce non-transferable token
Decentralized social media platform Friend.tech is preparing for its version two launch and airdrop on May 3, but a leaked smart contract suggests it may have controversial features, including a non-transferable token.
The Friend.tech v2 smart contracts may introduce a non-transferable token with the airdrop, according to pseudonymous decentralized finance (DeFi) researcher CBBOFE, who claims to have potentially found the smart contracts, according to a May 2 X post.
“Ticker is $POINT, not transferable unless to some whitelisted addresses. $POINT will be tradable on BunnySwap (FT native DEX).”
A non-transferable token means that airdrop recipients won’t be able to sell or exchange the coins, except for certain whitelisted protocol addresses.
Top restaking protocol EigenLayer has also decided on issuing a non-transferable token for its EIGEN airdrop, which was one of the main reasons behind the recent outrage surrounding EigenLayer.
Friend.tech made the token non-transferable to make users pay the 1.5% fee, according to Kasper Vandeloock, quantitative crypto trader and adviser at X10 exchange. He told Cointelegraph:
“If you can’t transfer it, you are forced to sell it through them, which has the 1.5% fee… Which is kind of ironic, they bring this strong ‘we are anti-VC’ vibe to the table while being a profit factory for Paradigm.)”
The new potential token, POINTS, will function as a utility token, allowing the creation of social clubs on the platform, which may cost a 1.5% platform fee according to CBBFOE:
“New smart-contract called Clubs. Anyone can create multiple clubs and a bonding curve among several options. 1.5% platform fee and 1.5% staking contract. Club keys are bought with $POINT.”
The new tokens will also be offered as rewards for users staking their Ether (ETH) and Points tokens in the Friend.tech smart contract.
The announcement caused concerns among crypto enthusiasts. Pseudonymous crypto trader MK commented:
“I hate Eigen so much for starting this non-transferrable meta.”
Related: EigenLayer sees over 12,000 queued withdrawals — How far will TVL fall?
Non-transferable tokens could reduce initial airdrop selling pressure
While non-transferable tokens have been causing significant community outrage, they could benefit the long-term price action of the cryptocurrency, as tokens tend to see drastic declines following the airdrops.
At the end of April, The Omni Network’s OMNI token fell 55% in less than 18 hours following the airdrop, losing over half of its market capitalization.
Wormhole’s token (W) is another example, falling nearly 25% in value only a couple of hours after an airdrop on April 3. The token is down over 47% since the airdrop, according to CoinMarketCap.
Crypto airdrops are often riddled with professional airdrop hunters (or squatters) that farm the same airdrop with multiple cryptocurrency wallets with no intention of using the protocol in the long term and market selling the rewards after claiming.
In March 2023, it was revealed that airdrop hunters consolidated $3.3 million worth of tokens from the then Arbitrum (ARB) airdrop from 1,496 wallets into just two wallets they had controlled.
Related: LayerZero cross-chain interoperability protocol completes first airdrop snapshot
