Arbitrum, a popular layer 2 scaling solution built on Ethereum, recently launched its token and airdropped it to its community. However, many eligible users reported not receiving the airdrop. This is not the first time a layer 2 project has airdropped tokens to its users.

Optimism, another Ethereum layer 2 solution, airdropped hundreds of millions of dollars’ worth of tokens to its users in May 2022, which sparked a frenzy for airdrops among the crypto community.

According to Delphi Digital, the number of active wallets on Arbitrum surged to 1.6 million on December 22, largely due to “airdrop hunters.” While airdrops can attract a large number of users to a project, it also has the potential to cause a steep drop in token value once the airdrop recipients sell their tokens. As a result, projects often try to target “real users” rather than just airdrop hunters.

Arbitrum has implemented a variety of conditions to determine which users receive the airdrop. These conditions include usage of the Arbitrum bridge, time spent transacting on the network, number of transactions/interactions with smart contracts, trading volume, liquidity provided, and number of transactions on Arbitrum Nova.

The more conditions a user fulfills, the more airdrop they receive. The project has also set time limits for users to qualify for the airdrop, with those who use the platform after the Nitro update on August 31, 2022, receiving only half of the airdrop based on their score.

“The purpose of this is to reward those who have supported the project from day one,” Arbitrum said in a statement.

Arbitrum has also introduced a “Sybil account” standard to weed out users who use multiple accounts to game the airdrop system. Using data from Nansen and Hop, Arbitrum will create a transaction graph on its network to identify related accounts. The project will then apply various criteria to exclude these accounts from receiving the airdrop.

According to Arbitrum, Sybil accounts are those that receive assets from similar wallet addresses, have similar on-chain activities, or are part of a chain of more than 20 accounts that transfer tokens back and forth. All Sybil accounts will not receive Arbitrum’s airdrop.

Other projects have also used similar methods to exclude airdrop hunters. Optimism, for example, excluded more than 17,000 wallet addresses during its first airdrop. While airdrops can be an effective way to attract users, it’s clear that projects need to be cautious in their implementation to ensure that they target genuine users and not just those looking for a quick profit.

#Sybil #Arbitrum #ARB #ARBairdrop #azcoinnews

This article was republished from azcoinnews.com

FOR AIRDROP HUNTERS...

When you farm an airdrop you must follow simple rules such as:
DYOR the projecttest the platform/game/dappjoin socialsbe active and make transactionsdo NOT do exact same things on the same time on the same project via different wallets - this will turn you into a "SYBIL mode" which is..

In the context of cryptocurrency, a Sybil attack is a malicious attempt to gain undue influence or control over a decentralized network by creating numerous fake identities. This can be achieved by using low-cost or free internet services or by exploiting vulnerabilities in the network's identity verification process.

How Sybil Attacks Work
A Sybil attacker can use fake identities to perform various actions, such as:
Manipulating consensus mechanisms: By creating a large number of fake identities, attackers can outvote honest nodes and alter the consensus rules of the network. This could allow them to double-spend coins, prevent legitimate transactions from being processed, or even halt the network altogether.Influencing governance: In some decentralized networks, certain decisions are made through community voting or governance polls. Sybil attackers can flood the network with fake votes to sway the outcome of these polls and gain control over the network's governance.Dominating airdrops: Airdrops are a common marketing strategy in the crypto space, where tokens are distributed to users based on specific criteria. Sybil attackers can create numerous fake identities to maximize their airdrop rewards, effectively stealing from other participants.

Examples of Sybil Attacks in Crypto
Monero's RingCT Upgrade: In 2018, an attacker attempted to manipulate the voting process for Monero's RingCT upgrade by creating over 40,000 fake identities. However, the Monero community was able to detect and invalidate these fake votes, preventing the attacker from influencing the outcome.Stealing Uniswap V1 Liquidity: In 2019, an attacker exploited a vulnerability in Uniswap V1's liquidity pool system to create millions of fake identities. This allowed them to siphon off a significant portion of the liquidity pool, causing significant losses for other users.
Preventing Sybil Attacks
Several strategies can be employed to mitigate the risk of Sybil attacks in decentralized networks:
Reputation systems: Networks can implement reputation systems that reward honest behavior and penalize malicious activity. This can make it more difficult for Sybil attackers to gain traction.Collaborative identity verification: Networks can collaborate to verify the identities of their users. This can help to identify and eliminate fake accounts before they can cause harm.Utilizing multiple verification factors: Networks can require multiple verification factors, such as KYC (Know Your Customer) procedures, to ensure the authenticity of user identities.Implementing Sybil-resistant consensus mechanisms: Some consensus mechanisms are inherently more resistant to Sybil attacks, such as Proof of Stake (PoS) systems that require network participants to stake a significant amount of cryptocurrency to participate in the consensus process.

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They maintain multiple accounts for the same project, stay undetectable and maximize profits from airdrops like those of Arbitrum, Aptos, Sui and others.



In one evening, you could make up to 10 quality accounts. It’s not rocket science, it’s just everyday work. That’s why so many people are FOMOing over it,” said Ilya, a 33-year old Ukrainian whose main source of income comes from airdrops.





Ilya (he asked CoinDesk to change his name) is also trading crypto for profit, but airdrops have taken up most of his time the past couple of months, he told me over Zoom, speaking from a “Southern European country.”

Ilya is one of the many crypto traders who make money from Sybil attacks on token airdrops. In other words, they spin up multiple accounts on a blockchain project that is expected to airdrop its token, then they snap as many tokens as they can. (A “Sybil” attack gets its name from a 1973 book about a woman with dissociative identity disorder.)





The attacks exploit the projects’ weak ability to identify and weed out fake accounts and pull tens and hundreds of thousands of dollars out of each airdrop. After they get tokens, they immediately sell.

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