Friend.tech's Controversial Smart Contract Features: Non-Transferable Token Raises Concerns

Decentralized social media platform Friend.tech's upcoming v2 launch may feature a non-transferable token airdrop. This token, called POINTS, would allow users to create social clubs on the platform while preventing initial airdrop selling pressure. However, concerns have arisen regarding potential conflicts with the platform's anti-venture capital stance due to a 1.5% fee associated with token sales.

Decentralized Social Media Platform Friend.tech Unveils Controversial Smart Contract Features

Friend.tech, a decentralized social media platform, is poised to launch its second version and airdrop on May 3. However, a leaked smart contract has raised concerns over the inclusion of controversial features, including a non-transferable token.

According to crypto researcher CBBOFE, who claims to have discovered the purported smart contracts, Friend.tech's upcoming version may introduce a non-transferable token with the airdrop. The token, denoted by the ticker $POINT, is reportedly non-transferable except to specific whitelisted addresses. Additionally, it will be tradable on BunnySwap, the platform's native decentralized exchange.

The non-transferability of the token implies that airdrop recipients will be unable to sell or trade the tokens, except through certain authorized protocol addresses. This restriction has drawn parallels to the recent controversy surrounding EigenLayer, another platform that distributed non-transferable tokens in its EIGEN airdrop.

Quantitative crypto trader and advisor Kasper Vandeloock speculates that Friend.tech's decision to make the token non-transferable is intended to compel users to pay a 1.5% transaction fee. Vandeloock asserts that this fee will force users to sell the tokens through the platform, which will then generate revenue for Paradigm, a venture capital firm that invested in Friend.tech.

In addition to its non-transferability, the POINTS token will serve as a utility token on the platform. It will enable users to establish social clubs, potentially subject to a 1.5% platform fee. Furthermore, the tokens will be distributed as rewards for staking Ether (ETH) and Points tokens in the Friend.tech smart contract.

The news of Friend.tech's proposed token features has sparked concerns among crypto enthusiasts. Crypto trader MK expressed dissatisfaction with EigenLayer for initiating the trend of non-transferrable tokens.

Despite the community backlash, non-transferable tokens could have potential benefits for the long-term price performance of a cryptocurrency. Historically, tokens have experienced significant declines following airdrops due to immediate selling pressure.

Examples of this phenomenon include The Omni Network's OMNI token, which plummeted 55% within 18 hours after its airdrop, and Wormhole's W token, which lost nearly 25% in value just hours after its airdrop.

Crypto airdrops often attract professional airdrop hunters who exploit protocols by claiming rewards with multiple wallets, intending to sell them immediately. In March 2023, it was reported that airdrop hunters had consolidated $3.3 million worth of tokens from the Arbitrum airdrop.

Friend.tech's upcoming airdrop will likely face similar challenges, highlighting the broader issue of airdrop manipulation.