Token airdrops targeted by farm accounts and ‘Sybil attacks’

In the face of soaring prices, there has been a significant increase in phony crypto farm accounts, also referred to as “Sybil attacks.” These fraudulent accounts generate false network activity to amass as many tokens as they can during token giveaways or airdrops, which have grown increasingly profitable over time. (Paraphrased version)

More recently, we’ve implemented a ban on around 2,000 users who are suspected of engaging in “Degen farming” on our platform. The creators of the Degen memecoin project, which operates under Farcaster social media protocol, issued this warning. Engaging in activities like organized posting or artificial engagement may result in user bans.

The Degen airdrop lasts until August 1, offering rewards to users who interact or produce top-notch content on Farcaster’s social platforms. However, some users have been posting inferior content solely to amass airdrop points. According to Degen’s developers, participating in coordinated efforts primarily to gain tokens and sharing irrelevant content in amplified channels will lead to bans.

Token airdrops targeted by farm accounts and 'Sybil attacks'

The memecoin project is far from the first protocol to suffer from Sybil attacks. 

On April 4, Bitget Wallet announced that it will remove airdrop points from users who create false wallet referrals and downloads using emulators or cloud phones to farm BWB tokens. Maintaining fairness and honesty for all participants is of the utmost importance to us, and we will not tolerate any deceitful actions that go against the rules of the event.

For the past month, the Bitget Wallet has been hosting an airdrop event which will come to an end on April 27. During this period, users have had the opportunity to earn rewards in various ways. They could invite friends to join, deposit tokens into their wallets, or carry out decentralized finance transactions using the self-custody wallet for swaps.

Despite identifying the problem, cracking down on Sybil attacks remain difficult. 

The Bitget Wallet team explained that they took action against the top 50 users who artificially inflated their referral points by employing unauthorized methods, in order to prevent unwittingly punishing honest users.

This year, Banteg, a well-known DeFi developer, brought up concerns regarding Starknet, an Ethereum layer-2 protocol, and its airdrop. According to Banteg, they meticulously examined all Starknet airdrops and uncovered approximately 1854 individuals who had either renamed or deleted their accounts after the activity snapshot was taken. Furthermore, Banteg approximated that around 701,544 addresses were potentially associated with repeat or renamed GitHub accounts managed by airdrop farmers.

In spite of this disclosure, the Starknet airdrop distributed tokens to the farmers’ wallets addresses despite the inclusion. Shortly following its debut, Starknet momentarily exceeded a fully diluted market cap of $20 billion. The airdrop continues until June.

In last August’s report from Gamic HQ, it was disclosed that to initiate a Sybil attack, individuals referred to as “airdrop farmers” employ scripts or bots to generate an immense number of phony accounts on a given platform. These fabricated accounts subsequently perform automated functions, including creating random usernames and emails, submitting registration applications, and even verifying accounts using CAPTCHAs.)

Researchers at Gamic HQ explained that Sybil attacks allow malicious actors to accumulate a significant amount of the free tokens given out in an airdrop. Consequently, fewer tokens are left for sincere users who may be more invested in utilizing and backing the project in the long term. This can negatively impact a project’s reputation, lead to an increased token supply, and result in price manipulation due to massive selling by airdrop farmers once the event concludes.

Despite the negative impact of Sybil attacks on their project, the firm identified some benefits. They argued that these attacks have driven blockchain initiatives to enhance identity verification and fair airdrop distribution techniques. As a result, they are hopeful that this continuous challenge will eventually lead to a stronger and more secure blockchain infrastructure.

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2024-04-23 22:18