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Cryptocurrency News Articles
Sybil Airdrop Farmers Target Free Tokens as Crypto Points Market Explodes
Sep 28, 2024 at 02:06 am
Airdrops are seeing a surge in popularity, with crypto projects distributing $26.6 billion worth of tokens in just three years since the first airdrop.
The rapid growth of crypto points has sparked massive interest in traditional airdrops. However, this surge has also led to a spike in Sybil airdrop farming attacks, where fake users and bots claim airdrop tokens, beating genuine community members to the punch.
DailyCoin examines why this trend has exploded and investigates strategies to combat it.
Crypto Points Spark Airdrop Frenzy
Airdrops have seen a surge in popularity, with crypto projects distributing $26.6 billion worth of tokens in just three years since the first airdrop. That’s nearly the cost of 10 NASA rover missions to Mars.
Such frenzy over free token distributions is relatively new, sparked by the emergence of crypto points in 2023. Projects distributed points as loyalty rewards for completing tasks, such as providing liquidity, making transactions, or holding an NFT. These points were later proportionally converted into tokens, which users received during an airdrop.
Even though they aren’t registered on the blockchain and lack transparency, billions of crypto points have been distributed. It’s no surprise that dedicated speculative pre-markets have formed, where crypto points can be leveraged and traded for cryptocurrency ahead of their token airdrops.
Naturally, the opportunity to profit from trading crypto points made airdrops even more desirable.
They’ve become targets for not just individual users but also large-scale airdrop hunters, which has brought significant challenges to the crypto market.
Sybil Farmers Target Airdrops
But as the golden rule says, popularity comes with a price. Where there’s big money, there are also those looking to game the system. In this case, they are Sybil airdrop farmers – individuals or entities who manage thousands or tens of thousands of fake identities to participate in airdrops.
Named after a fictional character with dissociative identity disorder, Sybil farmers mimic the behavior of genuine users and siphon off the token rewards intended for them. Their goal is simple: exploit loopholes in airdrop qualification and amass as much free money as possible.
The spokesman from MarketingFi platform builder Cookie3 told me that crypto projects were unprepared for industrial-scale airdrop exploits because they had not dealt with this problem before. Sybils kept advancing their technologies.
“Sybil attackers are getting more sophisticated in building algorithms that farm airdrops in such a complex way of on-chain and off-chain behavior that can be caught by airdrop shields because it mimics organic behavior so much.”
Different Attack Vectors Require Different Counter Strategies
As many crypto airdrop distributors have learned, Sybil farmers exploit different weaknesses of the protocols to achieve their goals. So far, they’ve been often successful. Fortunately, crypto industry players also have suggestions on how to turn the situation around.
Linear Distribution Method Targets Loose Eligibility Criteria Issues
One common weakness Sybils exploit is the loose airdrop eligibility criteria. A good example of this is zkSync.
A popular Ethereum scaling solution distributed 3.675 billion ZK tokens in June, marking the largest Layer-2 airdrop ever. Anyone meeting basic criteria—such as interacting with other protocols, adding liquidity, trading ERC20 tokens, or holding NFTs—could participate in the airdrop.
Over 695,000 wallets have qualified. They drove the network’s user activity to new highs and received over $2.5 billion tokens at a pre-market value of $0.69.
Yet blockchain analytics uncovered at least 46,000 wallets that collectively received $94.5 million in ZK tokens. They all constituted 660 clusters, controlled by several entities as part of a Sybil attack.
The project was heavily criticized for failing to prevent Sybil attacks, with the crypto community accusing zkSync of favoring whales over genuine small users.
“I love the zkSync guys but damn that was not a well planned airdrop from a sybil perspective. Those criteria are easy to not hit as a real user, and easy to hit as a farmer, and had no anti-sybil program,” stated a prominent blockchain investor Adam Cochran.
I love the zkSync guys but damn that was not a well planned airdrop from a sybil perspective.Those criteria are easy to not hit as a real user, and easy to hit as a farmer, and had no anti-sybil program.Real users could easily use 1-2 dapps or only a handful of tokens on your… pic.twitter.com/PiqprIbKJ3
Unfortunately, airdrop eligibility criteria are often easy for Sybil farmers to exploit. Protocols reward users with loyalty points and free tokens based on their fees to qualify for the airdrop rather than the amount of capital in their wallets. This means the more tasks a user completes, the more gas fees they pay and the more tokens they earn—especially when using multiple wallets.
Some in the crypto space believe this loophole could be fixed using a linear airdrop distribution method. This approach calculates rewards based
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