The drop in the price of the recently launched FRIEND token has left cryptocurrency users feeling disappointed. Launched as part of the SocialFi project by friend.tech, the FRIEND token saw a drastic 98% decrease right after its introduction due to issues encountered during the airdrop claiming process. An analyst has pointed out a striking imbalance between the liquidity added and the collected fees on the friend.tech platform.

Significant Downturn in FRIEND Token Value

Following its debut, the FRIEND token from friend.tech’s SocialFi project experienced a sharp decline in value, much to the chagrin of crypto users. Introduced on May 3, the token witnessed a staggering 98% fall almost immediately. Users participating in the airdrop expressed frustration due to glitches in claiming their tokens, resulting in a rapid decrease in the token’s worth.

Concerns over Liquidity and Fee Collection

In the wake of this unusual event, an analyst named Average Joe’s Crypto on X from Messari identified a notable discrepancy in the liquidity and fees on the friend.tech platform. It was observed that the team had introduced a liquidity level significantly higher than the fees collected. Users reportedly spent $30 million in farming expenditures for a token with liquidity totaling a mere $3 million.

Problems with Airdrop Claiming Process

Numerous users voiced complaints about the ineffectiveness of the token claiming platform, leading to successful claimants swiftly offloading their acquired tokens. This swift selling pressure exacerbated the price drop as others encountered difficulties securing their airdrops. An unfortunate user disclosed how the value of their airdropped tokens plummeted from seven to five figures within a mere two-hour window, while witnessing others make substantial sales.

Conclusion

Despite the turbulent start and significant price plunge, indications suggest that the situation is stabilizing for the FRIEND token. At the moment, the token is trading at $1.68, as per data from DEX Screener. The liquidity of the token has notably improved, now valued at $17.5 million, with a market capitalization of $140 million. This episode underscores the unpredictable nature and risks associated with the cryptocurrency market, particularly concerning newly launched tokens.