The native token of Friend.tech, $FRIEND, experienced a significant drop of 50% on May 3, following the largest whale dumping their holdings. BaseScan data revealed that the largest holder, known as “Murphys1d,” sold over 55,000 of the newly issued $FRIEND shortly after the airdrop. This resulted in a 53.3% decrease in the token’s price from $3.26 to $1.30. Additionally, some users were unable to access their airdropped tokens, further adding to the turmoil within the community. The low liquidity environment of $FRIEND made holders vulnerable to such sell-offs, leading to outrage among users.
Despite the sell-off and inability of some users to claim their airdrop, a few large orders had a significant impact on $FRIEND’s market price due to its low liquidity of only $0.01. This sparked anger within the community, with one user expressing frustration over the situation. The outrage stemmed from the feeling that users were being taken advantage of through fees and forced liquidity additions, only to be left vulnerable to dumps. Airdrop farmers, described as squatters who exploit emerging protocols solely for airdrop rewards, were highlighted as a major issue plaguing token launches. These farmers often use multiple wallets to maximize rewards, leading to significant selling pressure and panic among legitimate protocol users.
The Friend.tech dump is just one example of a professional airdrop farmer impacting the market. Such dumps create major selling pressure, forcing legitimate protocol users to panic and potentially sell their holdings as well. The negative impact on price action from events like these is usually short-term, as seen with the case of $FRIEND and other tokens affected by airdrop farmers. While the immediate aftermath may be challenging, the long-term outlook for $FRIEND and other tokens may be salvaged by their community of investors who remain committed to the project.
In April 2024, Omni Network experienced a similar situation with Sybil farmers affecting their native OMNI token, which plummeted by 55% in less than 18 hours following its airdrop. The market capitalization of OMNI was halved as a result of the dump. The impact of such events on price action can be severe, but it is essential to consider the resilience of the token’s community in the long run. Despite the challenges posed by airdrop farmers and market manipulation, the strength of the community backing a token can play a crucial role in overcoming short-term setbacks and potential price drops.
While $FRIEND may face challenges following the recent dump, the community of investors and users backing the token could help it recover in the long term. The importance of community support and resilience in the face of market manipulation and airdrop farming cannot be understated, as seen in the case of other tokens affected by similar events. Ultimately, the ability of a token to withstand short-term price fluctuations and external pressures largely depends on the strength and commitment of its community of investors and users.
