zkSync (ZK) Token Airdrop Controversy: What Happened and What's Next?

On June 17, zkSync (ZK) tokens were distributed through an airdrop, creating a lot of initial interest. However, blockchain analysis revealed that nearly half

zkSync (ZK) tokens were finally airdropped on June 17, generating initial excitement within the crypto community. However, blockchain analysis revealed that nearly half of the top wallets that received the new zkSync token sold their entire allocation shortly after.

This large-scale sell-off led to a steep 39% decline in the token’s price, dropping from its launch price of $0.3098 to a low of $0.1904 on June 18. As of June 19, the price has recovered slightly, trading around $0.2215.

So, what exactly happened here? And how does this impact zkSync price predictions? Let’s delve into the details to understand the situation better.

What exactly happened?

zkSync announced its much-anticipated airdrop of the ZK token on June 11. This event aimed to distribute 17.5% of ZK’s 21 billion token supply to 695,000 eligible wallets on June 17. Additionally, 33.3% of the tokens were reserved for the project’s team and investors, intended as a reward for early users and long-time supporters.

Introducing the ZK Token

Checker → https://t.co/O2UonCvfzi

Announcement → https://t.co/hjgI14PHoi

Docs → https://t.co/taWBoCnfbc

It’s time to put the ZK token into the hands of the community. It’s your turn to govern ZKsync’s future. pic.twitter.com/VD3fZgH5bf

The announcement initially generated notable excitement within the crypto community. Eligible users were promised up to 100,000 ZK tokens, depending on criteria met before a snapshot taken on March 25.

However, shortly after the airdrop went live, criticism began to mount. Many long-term and active users reported receiving fewer tokens than they felt they deserved, while less active wallets received higher allocations.

The situation further escalated when several top-ranking projects built on zkSync, like the NFT project zkApes, revealed they had not received any airdrops despite generating colossal gas fees for the network.

We generated $15 million in gas fees for @zksync , but received no airdrop in return. What a joke!!!#zk #zksync

These projects formed a coalition to pressure zkSync’s team for a fairer token allocation, demanding transparency and fairness.

Despite the criticism, the airdrop went live on June 17, and what followed was a large-scale sell-off. Data from blockchain analysis firm Nansen showed that 41% of the monitored addresses sold their entire zkSync airdrop, while 29.2% sold some of their tokens. This massive sell-off led to a steep decline in the token’s price.

Critics argued that the criteria used for the airdrop were inadequate in preventing Sybil attacks, where multiple wallets are manipulated by a single user to amass tokens and then dump them after listing on exchanges.

Despite these criticisms, zkSync defended their approach. They mentioned rewarding genuine participants while maintaining fairness and integrity.

ZKsync never invited people to farm. It always strived to build a community of people who deeply care about the mission of ZK Credo and the incredible potential of the ZK tech.

Almost every blog post, twitter message, public statement of ZKsync focuses on the long-term mission,…

Controversy, public reaction, and skepticism

The zkSync airdrop was meant to be a celebration, rewarding loyal users and early supporters. However, the aftermath has been far from celebratory.

Mudit Gupta, Chief Information Security Officer (CISO) at Polygon (MATIC) Labs, was among the first to voice concerns. He pointed out the apparent lack of effective Sybil filtering, which allows individuals to exploit multiple wallets to maximize their airdrop rewards.

zkSync airdrop is out. Most farmable and farmed airdrop ever probably. Almost no sybil filtering as far as I can see.

Anyone who knew the criteria could've easily farmed the shit out of it.

Makes you appreciate what LayerZero is trying to do with sybil filtering.

Adam Cochran, a partner at Cinneamhain Ventures, echoed these sentiments. He noted that the criteria for receiving the airdrop were easy to meet for those manipulating the system, yet could be missed by genuine users due to the nascent stage of zkSync’s ecosystem.

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 d