DeFi
Liquidity providers rake in big money as influencers rush to sell their FRIEND airdrop tokens – DL News
- Friend.tech’s native token, FRIEND, went live on Friday with 52 million FRIEND claimed by users as of 4 p.m. London time.
- Trading has been extremely volatile, with $69 million in trading volume generating over $1 million in fees for liquidity providers so far.
- FRIEND was launched alongside V2 of the social media platform, the main feature of which is group chats called “clubs”.
On its first day of trading, ami.techThe FRIEND token has already generated a total volume of over $69 million, generating $1,035,000 in fees for liquidity providers.
Users who participated in V1 on ami.techa social media platform that allows users to buy and sell shares, called keys, with other users providing access to private chat rooms, has earned a share of 90 million FRIEND tokens.
Against the trend, the entire FRIEND offering was allocated exclusively to users of the protocol, deviating from the industry norm where typically more than half of a new token’s supply is reserved for investors and developers.
Once claims for FRIEND were live, many users rushed to sell their tokens for a gain.
For example, HaskaTradesa popular influencer among crypto traders, sold around 191,000 FRIEND at an average price of $0.91, net $174,000.
Another influencer, CL207sold nearly 170,000 FRIEND at an average price of $1.22 for one $207,000 profit.
The rush to attempt to claim and then sell tokens for a gain, and the resulting volatility, has helped liquidity providers.
All FRIEND transactions must be made through ami.techThe Bunny Swap decentralized exchange. Transactions through the DEX are charged a 3% fee, of which 1.5% goes to the friend.tech team and 1.5% to liquidity providers.
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Users who provide FRIEND liquidity on Bunny Swap are also eligible to receive more FRIEND rewards. In total, 12 million FRIEND has been set aside to reward liquidity providers over the next 12 months.
But providing liquidity is not without risks.
As some have done underlinesusers who provide liquidity are exposed to fleeting losswhich is amplified in very volatile situations.
A fleeting loss occurs when you lose value in a cryptocurrency investment due to the price movement of the tokens you have pooled together compared to if you had simply held them separately. This loss is only realized when you withdraw your tokens from the pool.
Still, liquidity providers appear to be doing well so far.
A social media liquidity provider posted an update on 10.02 Ether and 18,064 FRIEND, they provided liquidity, a total of around $60,000.
In approximately eight hours, the user earned 0.65 Ether and 2,090 FRIEND in trading fees, as well as another 321 in FRIEND liquidity incentives. At current prices, that’s about $4,000 in FRIEND rewards and $2,000 in Ether rewards, a gain of 10%.
Friend.tech Clubs
Once V2 launched, users were able to claim 10% of the total amount of tokens they were to receive instantly. The remaining 90% could be claimed after following 10 users on the app and joining a club.
Clubs are group chats that require the purchase of a “key” to access. The price of keys is dynamic, following a curve that adjusts depending on the number of people who have purchased them. As more keys are purchased, the cost of accessing the chat room may increase or decrease accordingly.
Although many users problems reported When joining clubs, exchanging club keys is also done through Bunny Swap, for the same 1.5% fee. It is unclear how many fees the club key exchanges generated.
However, at 4 p.m. London time, around 52 million of FRIEND’s total supply has been claimed, implying that many users have been able to purchase club keys.
The idea of clubs seems to be well received, with some highlights how this new functionality will also play a central role in creating value for liquidity providers.
Since its launch around $3.08, FRIEND briefly climbed around $169.09 before stabilizing around $1.79. Some 36,500 trades were made and $12 million of liquidity was provided to the market. AMI/wETH pair.
Ryan Celaj is a data correspondent at DL News. Do you have any advice? Send him an email to ryan@dlnews.com.