Friend.tech Gears up for Version Two Release Amid Controversy Over Non-Transferable Tokens
Summary:
Friend.tech, a decentralized social media platform, is on the brink of its second version launch and airdrop on May 3. According to leaked smart contracts, the airdrop might feature a new non-transferable token, $POINT. This move, which forces users to trade only to whitelisted addresses, has drawn flak from the crypto community, echoing a similar backlash against EigenLayer's EIGEN airdrop. Despite facing criticism, some view these non-transferable tokens potentially beneficial to sustain long-term cryptocurrency values.
Friend.tech, a decentralized social media platform, is gearing up for the release of its second version and an airdrop scheduled for May 3. However, according to allegations made by CBBOFE, a decentralized finance researcher who prefers to remain anonymous, leaked smart contracts entail controversial elements, including a token that cannot be transferred. CBBOFE suggests that the impending airdrop might feature a non-transferable token, known as $POINT, that can only be traded among approved addresses on BunnySwap, Friend.tech's native decentralized exchange. Users who receive tokens from the airdrop won't be able to swap or sell these coins unless they're dealing with specific addresses approved by the protocol.
Another prominent restaking protocol, EigenLayer, also chose to issue an untransferable token for its EIGEN airdrop; a decision that drew significant backlash recently. According to Kasper Vandeloock, a crypto trader and advisor at the X10 exchange, Friend.tech chose to make the token non-transferable to ensure users pay a 1.5% fee. He remarked, the company advertises itself as being against Venture Capital while simultaneously serving as a revenue generator for Paradigm.
The proposed new token, POINTS, will be utilized within the ecosystem, enabling the creation of social clubs on the platform for a potential fee of around 1.5%. In addition to this, Friend.tech may also offer these tokens as rewards for users staking their Ether (ETH) and Points tokens in the platform's smart contract.
Despite potential benefits to long-term cryptocurrency price action, untransferable tokens have drawn significant criticism from the community. Following past airdrops, tokens often experience steep value decreases. For instance, post-airdrop, the OMNI token from The Omni Network dropped by 55% in less than 18 hours, and Wormhole's token slumped nearly 25% in value within few hours after an airdrop.
Crypto airdrops are frequently exploited by professional "airdrop hunters" who collect the same airdrop using multiple wallets with no intention of utilizing the protocol long-term, further driving down token values. Earlier in March 2023, these hunters accumulated tokens worth $3.3 million from the then Arbitrum (ARB) airdrop, consolidating them from 1,496 wallets into just two under their control.
Published At
5/2/2024 2:43:53 PM
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