In the midst of skyrocketing prices, numerous cryptocurrency projects are facing an increase in the number of fake accounts known as “Sybil attacks” named after a book about a woman with multiple personalities. These fake accounts artificially generate network activity to accumulate as many tokens as possible during airdrop events, which have become highly profitable over the years.
In response to this issue, the creators of the Degen memecoin project, built on the Farcaster social media protocol, have taken action by banning approximately 2,000 users suspected of engaging in Degen farming. They have warned that participating in coordinated posting or artificial engagement could lead to bans.
The Degen airdrop, which rewards users for engaging with or creating quality content on Farcaster social channels, is ongoing until August 1. However, it seems that a significant number of users have started posting subpar content solely to earn airdrop points. Degen developers have made it clear that engaging in organized actions for the purpose of earning tokens or posting unrelated content in boosted channels will result in bans.
Degen’s warning to Sybil attackers
It’s worth noting that the Degen memecoin project is not the first protocol to experience Sybil attacks. Bitget Wallet, a self-custody wallet, recently announced that it would deduct airdrop points from users who use emulators and cloud phones to create artificial wallet referrals and downloads for farming BWB token rewards. Bitget Wallet staff emphasized the importance of fairness and integrity for all participants and expressed their commitment to not turning a blind eye to any dishonest behavior.
Despite efforts to identify and address the issue, cracking down on Sybil attacks remains challenging. Bitget Wallet developers explained that they only deducted points from the top 50 users who boosted their referral points through illicit means to avoid penalizing honest users.
Earlier this year, prominent DeFi developer Banteg raised concerns about the Ethereum layer-2 protocol Starknet and its airdrop. They discovered numerous accounts that had either been renamed or deleted since the activity snapshot, as well as a large number of addresses allegedly linked to repeat or renamed GitHub accounts controlled by airdrop farmers. However, these addresses were still included in the Starknet airdrop. Despite this revelation, Starknet’s valuation temporarily surpassed $20 billion shortly after its launch. The airdrop is ongoing until June.
A report by Gamic HQ last August shed light on the deployment of Sybil attacks by airdrop farmers. These attackers utilize scripts or bots to create a massive number of fake accounts on a targeted platform and automate tasks such as generating random usernames and emails, filling out registration forms, and verifying accounts with CAPTCHAs. The researchers at Gamic HQ emphasized that these attacks result in a large portion of the airdropped tokens being accumulated by the attackers, leaving fewer tokens for genuine users who may have a long-term interest in using and supporting the project. As a result, the project’s reputation is tarnished, the token supply inflates, and price manipulation may occur due to excessive dumping by airdrop farmers after the event ends.
However, Gamic HQ also highlighted some positive outcomes of these attacks. They claimed that the rise of Sybil attacks has compelled blockchain projects to develop more sophisticated methods for verifying user identities and ensuring fair distribution of airdrops. They believe that this ongoing battle will ultimately contribute to a more robust and secure blockchain ecosystem in the long run.
In related news, blockchain data-availability protocol Avail has announced a 600M token airdrop.