May 25, 2024
Nontransferable tokens controversy
Latest Cryptocurrency News

Debate Over Nontransferable Tokens at Friend.tech Launch

Friend.tech, a decentralized social media platform, is gearing up for the launch of its version two and accompanying airdrop scheduled for May 3. However, recent developments suggest potential controversy surrounding its nontransferable token features.

Leaked Smart Contract Reveals Nontransferable Token Plans

A leaked smart contract has brought to light Friend.tech’s intention to introduce nontransferable tokens alongside its upcoming airdrop. According to a pseudonymous decentralized finance researcher going by the name CBBOFE, details found in a May 2 post hint at the inclusion of nontransferable tokens in the airdrop.

The researcher shared insights, stating, “Ticker is $POINT, not transferable unless to some whitelisted addresses. $POINT will be tradable on BunnySwap (FT native DEX).” This development signifies a potential restriction on the ability of airdrop recipients to sell or trade their coins, except for specific addresses pre-approved by the platform.

Industry Responses to Nontransferable Tokens

The move towards nontransferable tokens is not unique to Friend.tech alone. EigenLayer, a restaking protocol, has also opted to issue nontransferable tokens for its EIGEN airdrop, sparking recent controversies within the crypto community.

Kasper Vandeloock, a quantitative crypto trader and adviser at X10 exchange, sheds light on Friend.tech’s motive behind the nontransferable token strategy. Vandeloock notes that the decision was made to enforce a 1.5% fee on users, adding that the newly proposed utility token, POINTS, will enable the creation of social clubs on the platform, each incurring the aforementioned platform fee.

Impact and Concerns in the Crypto Community

The news of Friend.tech’s nontransferable token plans has triggered concerns among crypto enthusiasts and traders. One pseudonymous crypto trader known as MK expressed dissatisfaction, saying, “I hate Eigen so much for starting this non-transferrable meta.” Despite community backlash, there are arguments suggesting potential benefits for the long-term stability of token prices post-airdrop.

Nontransferable tokens have garnered attention due to their potential to alleviate immediate selling pressures following airdrops. Recent examples such as the Omni Network’s OMNI token and Wormhole’s W token saw significant value declines shortly after their airdrops, attributed in part to market speculations and short-term profit-taking strategies by airdrop hunters.

Future Goals

As Friend.tech readies itself for its version two launch and airdrop, the inclusion of nontransferable tokens has stirred both anticipation and concern within the crypto community. While such tokens may mitigate immediate post-airdrop selling pressures, they also raise questions about user autonomy and market dynamics in the evolving landscape of decentralized platforms. The coming days will likely witness further discussions and assessments regarding the implications of nontransferable tokens on Friend.tech’s ecosystem and the broader cryptocurrency market.

Image by freepik

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