Several cryptocurrency projects have experienced an increase in “Sybil attacks,” or “fake farm accounts,” following increased prices.
These fraudulent accounts generate fabricated network activity to acquire the most significant number of tokens possible during airdrop events, which have grown substantially profitable.Â
“We have recently banned around 2,000 users who we suspect were farming Degen,” the Farcaster social media protocol-based Degen memecoin project’s creators wrote on X. “Participation in Degen farming, including artificial engagement and coordinated posting, may result in bans.”
Through August 1, users who participate in the Degen airdrop or produce high-quality content shared on Farcaster’s social channels will be rewarded. Conversely, many users have started publishing below-average content with the explicit intention of accumulating airdrop points.
Degen developers wrote, “Participating in organized actions primarily to earn tokens and posting irrelevant content in boosted channels will result in bans.”
Sybil assaults have sincere precedent, predating the memecoin project.
Users who use “emulators and cloud phones” to generate artificial wallet referrals and downloads to harvest BWB token rewards will have airdrop points deducted from their accounts, according to self-custody wallet Bitget Wallet on April 4.
Bitget Wallet staff wrote, “Upholding fairness and integrity for all participants is of the utmost importance to us, and we cannot turn a blind eye to any dishonest behavior that violates the event’s rules of conduct.”
With a scheduled conclusion date of April 27, the Bitget Wallet airdrop has been in progress for the past month. Through the self-custody wallet, users can earn rewards by referring peers, depositing tokens, or conducting decentralized finance (DeFi) swaps.Â
Even with the identification of the issue, effectively countering Sybil’s attacks continues to be challenging.
“To be certain that we do not inadvertently penalize honest users, we have identified and deducted points only for the top 50 users who boosted their referral points through illicit means,” according to Bitget Wallet developers.
A notable DeFi developer, Banteg, also mentioned an issue with the airdrop of the Ethereum layer-2 protocol Starknet earlier this year. “1854 users who have either renamed or deleted their accounts since the activity snapshot,” they purportedly discovered after examining every Starknet airdrop.
Banteg additionally detected an approximate total of 701,544 addresses that were purportedly associated with duplicate or renamed GitHub accounts under the control of airdrop producers.
Notwithstanding this disclosure, the addresses of the airdrop producers persisted in the Starknet airdrop. Soon after its launch, Starknet surpassed a diluted valuation of $20 billion. The airdrop will continue through June.Â
Researchers detailed in an August report by Gamic HQ that airdrop farmers “use scripts or bots to create a massive number of fake accounts on a targeted platform” to execute a Sybil attack.
These accounts automate processes such as “generating random usernames and emails, filling out registration forms, and even verifying accounts with CAPTCHAs.”
Additionally, researchers from Gamic HQ stated that Sybil assaults “mass a significant portion of the airdropped tokens, leaving less for legitimate users who may have a longer-term interest in utilizing and supporting the project.”Â
Consequently, excessive dumping by airdrop farmers following the event’s conclusion may lead to price manipulation, an escalation in the supply of tokens, and harm to the reputation of the underlying project.
Nevertheless, the company also observed several favorable outcomes due to the assaults. They claimed that “the increase in Sybil attacks has compelled blockchain projects to develop more sophisticated methods for ensuring equitable airdrop distribution and user identity verification.”
“With any luck, this ongoing conflict will ultimately result in a blockchain ecosystem that is more resilient and secure.”
