Author: defioasis

Editor: Faust & Bai Ding, Geekweb3

Recently, a major earthquake has occurred in the airdrop track. The highly anticipated ZKsync, LayerZero, and Blast all officially held TGE in June. It was thought to be a feast for airdrop parties, but it turned out to be the birth of the "largest anti-looting in history" and the "largest witch database". In addition, Binance MegaDrop also implemented punitive measures for users who received rewards through multiple KYC. Not only were the wool parties anti-looted, but they were also labeled as witches, and they complained bitterly under the double loss. The airdrop track, which was once regarded by countless people as a channel for getting rich quickly, has now been completely abandoned.

It can be said that the number of airdropped tokens is not satisfactory, and the overall market continues to be sluggish. Most airdropped tokens peaked when they were launched, and then plummeted all the way, and countless wool parties eventually lost their income. However, is this chaos a phased phenomenon, or is it an inevitable result after the industry develops to a certain extent?

Focusing on the above issues, this article combines the recent controversial ZKsync airdrop, LayerZero anti-sybil measures and Blast points system and other real-life materials to deeply analyze the current airdrop track pattern and its future trends. We believe that the era of getting rich by robbing hair is history, and everyone should give up fantasy and find more suitable and more practical things to find another way out.

ZKsync airdrop: Matthew effect, insider trading, and ignoring old users

The most famous TGE and airdrop events in recent times include the ZKsync airdrop in June. Although its Airdrop share accounts for about 17% of the total token supply, the airdrop weight ratio is relatively high among well-known projects, but its distribution details and airdrop effect still caused dissatisfaction in the community. The reasons can be briefly summarized into three points.

First, there is an obvious Matthew effect in the distribution of this airdrop. Although ZKsync claims to be "very generous" in community rewards, as a star project with over 6 million active addresses, only nearly 700,000 addresses are eligible to receive airdrops, that is, only 10% of the addresses received rewards, which is basically the lowest among the major Ethereum Layer2 projects in the previous TGE.

In addition, compared with the dismal returns of most airdrop players, 23.9% of the airdrops were distributed to 9,203 addresses. Each of these 1.3% addresses received nearly 100,000 token rewards, about 27,000 US dollars, which ultimately made the minimum/maximum rewards obtained by different airdrop addresses differ by 100 times.

These data show that ZKsync’s reward mechanism is heavily biased towards a small number of top players.

Afterwards, it was verified that ZKsync allocated most of the airdrops to users with more assets on the chain, or OGs and contributors in the community. ZKsync may hope to encourage these people to hold tokens for a long time. However, the result was not as expected. According to Nansen data as of June 30, among the first 100,000 addresses that received the ZK airdrop, only 19.3% continued to hold tokens, and the remaining addresses sold some or all of the airdropped tokens.

Second, in addition to the unreasonable distribution weights mentioned above, this airdrop distribution is also believed to involve "rat trading". For example, although the holders of PudgyPenguins, MiladyMaker, Degen, and Bonsai did not directly participate in the ZKsync ecological interaction, they were still eligible to receive airdrops, and the amount of airdrops they received was more than many users who actively participated in the interaction. The existence of these suspected "rat trading" has greatly diluted the users' actual airdrop shares, causing strong resentment in the community.

Interestingly, it is not just the airdrop players who objected to ZKsync, but also several project parties within the ZKsync ecosystem have joined the list of defenders. NFT project parties that have long been on the whitelist are not eligible to participate in the airdrop activities that ZKsync gives to projects within the ecosystem, while some MEME projects with less than 10,000 followers on Twitter, such as LongMao and Long, have received a certain share of the airdrop, which can't help but make people suspicious.

In addition, several long-term projects in the ZKsync ecosystem, such as Zerolend and Element, also tweeted that they were treated unfairly. On the contrary, Aave, Ethena, and some projects that have not yet been launched in the ecosystem received airdrops, with Aave receiving the largest share this time. ZKsync used 0.5% of the total FDV, or about $20 million, to support Aave's social product Lens, which is more than the latter's publicly disclosed $15 million in financing.

Based on the above reasons, many community members and project parties expressed doubts and dissatisfaction with ZKsync's distribution mechanism, believing that it lacks transparency and fairness.

Third, although the ZKsync mainnet has been online for 4 years and has been in operation for a long time, early loyal users did not gain any advantage in this airdrop distribution. Among the 7 airdrop bonus rules of ZKsync, early Zksync lite users only meet two of them. If they do not participate in the subsequent interaction of ZKsync Era, they will not even be eligible to receive the airdrop.

The above are some of the questions raised by community members regarding the ZKsync airdrop. ZKsync officials used the excuse of avoiding large-scale robot and Sybil attacks as a defense for the watered-down airdrop results. However, in actual anti-Sybil operations, ZKsync did not filter Sybil accounts thoroughly.

A senior witch player @k1z4 claimed to have obtained 6.6 million airdrop tokens using 350 wallet addresses. In addition, more than 3,300 accounts listed as witch addresses by Arbitrum still received rewards, and more than 130 million airdrop tokens were put into Layerzero's witch list addresses.

Compared to Eigenlayer, which adjusted its distribution plan under pressure from community opinion, ZKsync did not take any measures to solve the problem, ignoring the dissatisfaction of community members, which ultimately made people completely disappointed. Currently, the activity of the ZKsync mainnet has been declining since it reached its peak in March, and this trend has been extremely intensified after TGE.

LayerZero: Releases the largest list of witches in history

Unlike ZKsync, which did not make the airdrop rules transparent in advance and gave a set of excuses afterwards, LayerZero adopted an open and transparent approach in the details of the airdrop rules, distribution plan, anti-sybil methods, etc. from the beginning, fully listened to the opinions of the community, and ensured the fairness of the airdrop distribution. To this end, LayerZero co-founder Bryan Pellegrino actively interacted with the community on social media, showing his high attention to the community.

However, the biggest complaint about the project is not the airdrop distribution rules, but the Sybil problem.

After LayerZero announced the snapshot on May 1, it quickly launched a two-month Sybil review. The first round of review was jointly conducted by Nansen and Chaos, mainly filtering out obvious Sybil behaviors such as common scripts, synchronizers, and address associations. After that, the Layerzero team launched a second round of anti-Sybil actions - community reporting. Users can report the Sybil behavior of other accounts to each other and receive a portion of the airdrop that the reported account should receive as a reward.

Since the Sybil addresses will be made public in the form of a list, which will affect the subsequent airdrop policies of other projects, this community reporting system has sparked widespread discussion and criticism.

Of course, the community reporting system is not LayerZero’s first. Previously, Connext, Hop, Safe and other projects have used this method to filter Sybil addresses before airdrops. However, unlike previous community reporting systems, LayerZero did not start the reporting process after the airdrop query function was turned on, but included all passing addresses in the review scope, involving about 6 million addresses. This move quickly triggered community condemnation.

In the early GitHub reporting stage, the LayerZero community "fights magic with magic" by using DDOS and malicious batch reporting to slow down the review process, which once led to the closure of the witch hunter's GitHub account. Later, the reporting entrance was moved to a platform that required a deposit, but the large amount of reporting information still delayed the progress of LayerZero's work, and ultimately failed to complete the review work before the airdrop query was opened.

It can be said that the community reporting system has fully tapped the imagination of the masses, resulting in a large number of witch-hunting ideas emerging, and the coverage of anti-witch efforts is almost unprecedented. The characteristics of these discovered witch addresses are:

1. There is a certain regularity in ENS domain name registration. In the LayerZero community round of reports, there is an example of a group of ENS addresses that all start with ruslan and have suffixes of 001-104. These addresses were reported as a cluster controlled by a single entity. This address cluster received a large number of airdrops on ZKsync, and there is a strong suspicion of Sybil. This case has attracted people's attention and made people pay attention to the clues in ENS domain name registration behavior.

2. Clues in non-EVM chains and testnet addresses. Although witch players interact cautiously on the EVM chain and use various anti-witch methods, their interactions in the non-EVM ecosystem may reveal their true colors. Witch hunters can find witch clusters through the association with EVM addresses on Aptos, Solona, ​​and Starknet wallets. In addition, witch hunters can also find witch addresses on the testnet.

3. Clues in on-chain voting behavior. A witch hunter used the correlation of voting behavior on StargateDAO in the snapshot as a basis, and based on the correlation between the behavioral patterns of each address, the time of the first vote, and the interval between previous votes, he finally found 7,404 witch addresses belonging to 211 clusters.

In addition, social media accounts have also become a basis for witch hunting. Potential witch accounts can also be identified through the content of account posts, mutual connections, and even the inference of connections based on the invitation link serial number. Although this method has not been fully adopted, its reference significance cannot be ignored.

If the identity of a Sybil is inferred by behavioral similarity, for a single entity with multiple active accounts, even if there is no direct correlation between the addresses, it is inevitable that they will be detected due to similar behaviors during long-term use. However, the above method is more based on inference and lacks direct evidence, which poses the risk of mistakenly killing non-Sybil users. Therefore, after publishing the Sybil list, LayerZero still opens up opportunities for the community to appeal in order to reduce the rate of mistaken killing.

In summary, in the community reporting system, there is a game relationship between witch hunters, users and airdrop studios. If the Lumao studio surrenders itself, it can still get 15% of the original reward; if the witch determination criteria are not determined, the witch hunter can "lure the snake out of the hole" through the official and community reporting channels and get 10% of the airdrop income of the reported account. In order to avoid wasting energy, the witch hunter must ensure that the reported address is originally eligible for the airdrop.

Judging from the final results, LayerZero only distributed 8.5% of the tokens to the community of 1.2 million people during the TGE. There were too many people and too little porridge. The amount of airdrops people received was not ideal, and even the income of the top 5% of users was average. Whether it was the surrenderers or the witch hunters, the income was not high. This can be confirmed by the data leaked in the media.

In addition, Layerzero officially confiscated 10 million tokens that belonged to the Sybil addresses. Although the team has not yet announced the final Sybil list, it is inferred from the previous rounds of lists that the number of addresses involved in the final list is no less than 1 million, which is the largest Sybil database in the history of Web3. This move triggered an unprecedented battle royale, and the wool party was more cautious when interacting with projects that have not yet TGE, and even made many people give up the wool interaction of cross-chain bridges such as Hyperlane, Bungee and LiFi.

Redefining Witch

After Layerzero announced the witch hunt, ZkLink, Linea, and Drift followed suit, and the witch hunt atmosphere spread to other ecosystems, and even staking and verification nodes were included in the scope of the witch hunt. However, different projects have different definitions of "witches", and there is still a lot of ambiguity in the positioning of real users and witches.

Although Nomis and Trustalbas have introduced indicators to measure user authenticity, many projects do not distinguish between Farmer and Sybil, but directly define some Farming behaviors with non-real user traces as Sybil. For example, Wormhole regards brush transactions as junk transactions, classifies them as Sybil behavior, and confiscates the user's related rewards;

Similarly, Layerzero defines apps commonly used by Farmers as witch applications, and defines users who frequently use "witch farming" programs such as Merkly, L2Pass, and L2Marathon, as well as users who use worthless NFTs and small cross-chain transactions as witches. However, Layerzero ultimately only downgraded the use of cross-chain transactions below $1 and low-quality NFT cross-chain transactions, and did not blacklist them, which is indeed a more reasonable approach.

Blast: Points-based airdrops are going bad

As an alternative to interactive airdrops, the points system has been controversial since its inception. On the one hand, the uncertainty of airdrops, the opacity of points, and the project party's ability to arbitrarily modify the points rules. For example, in Eigenlayer and Drift Protocol, the points obtained by users staking real money were declared not to be the main basis for airdrops, and Etherfi even had the phenomenon of point reduction and point theft;

On the other hand, even if the points are clear, the dilution in the future is still unknown. Taking the multiple rounds of Odyssey activities launched by Linea as an example, the points may be diluted in the future due to various activities, extended TGE time and other factors. These practices of the project party are vividly called "PUA" by users.

When it comes to point-based airdrops, Blast is the originator. Its point system has two types: users can get ordinary points through deposits and gold points through on-chain interactions. However, Blast has only had the concept of ordinary points before, and suddenly introduced gold points after the mainnet was launched. The difference between the two is that ordinary points are obtained through the positive correlation between pledged assets and duration, while gold points require users to continue to participate in interactions after the mainnet is launched. Gold points can multiply users' ordinary points, up to 120 times the ordinary points.

People originally thought that the staking activity would end when the Blast mainnet was launched, and that the airdrops would be distributed according to the normal points at that time. However, after the staking activity ended, Blast suddenly launched the gold points mechanism, catching people off guard.

First of all, Blast was one of the first projects to use a points-based airdrop system. The core of this system is that users who pledge more assets and for a longer period of time will receive more airdrops, but the 120-fold multiplier of gold points means that the benefits of early users at the cost of locking up a large amount of assets are diluted indefinitely.

Secondly, the gold points mechanism requires users to keep all pledged assets in the Blast network for interaction, because the project did not take a snapshot after the mainnet went online, but continued to obtain ordinary points based on the amount of assets as before. In this case, if users withdraw most of their assets and only leave a small amount of assets for interaction, the growth rate of ordinary points as the base will drop significantly, and the role of gold points will be greatly reduced. Qualitatively speaking, this is a typical "reverse staking".

In short, Blast has made every effort to significantly reduce the benefits of airdrop players and try to keep user assets on the Blast chain, but people are not buying it. After the rules were announced, Blast's TVL dropped by $1 billion in just 10 days, a decrease of 1/3.

After endless recruitment, interaction, and deposits, the points system eventually evolved into a competition of social influence, a game for big players. KOLs use their social influence to invite users, and then get the airdrop weight to enjoy the benefits. Big players have an innate advantage in the points game based on deposits. Justin Sun received a share of up to 4.26% in the first season of EigenLayer's airdrop.

When points are no longer recognized in the airdrop of the points project, and points are diluted in various ways, users' hard-earned points may even lose eligibility due to Sybil censorship. This distribution method will gradually be despised by the community. Blast's large-scale anti-dumping has made more and more people unwilling to sacrifice their opportunity costs in exchange for those invisible and intangible points. The rise of the points system began with Tieshun, and may end with Tieshun.

The sun is setting on the airdrop track

The model of getting rich through airdrops has been popular for four years since the summer of Defi, but it is now on the decline. Since the beginning of the year, with the growth of the number of fans of LuMao KOL and the rapid expansion of the scale of LuMao Studio, people's attention to airdrops has shown obvious signs of overheating. In contrast, the airdrop yield of individual users has shown an exponential decline. From Wormhole, Starknet to Taiko, LayerZero, ZKsync and other projects, in just half a year, the airdrop rewards that a single address can obtain have been reduced at a visible rate.

Affected by market and community sentiment, many projects did not perform well during TGE. The low community sentiment can be attributed to the low return on investment of users, while the negative sentiment in the secondary market reflects investors’ dissatisfaction with projects with low circulation and high FDV.

In hindsight, community members reacted strongly to projects such as ZKsync, LayerZero, and Taiko, which required long-term interactions and were eventually counter-charged, and issued voices of condemnation. In contrast, projects such as Avail, Dymension, and Celestia, which issued airdrops to non-ecological users, did not cause much controversy. This is because the airdrops do not require users to interact too much in the ecosystem, and the wool party does not pay too much cost, which is a pleasant surprise for the recipients.

In summary, the original intention of airdrops is to attract real users with expected rewards, and the track of making money is not what the project parties want to see. The various strange phenomena that have appeared recently can be attributed to the long-standing incentive incompatibility between airdrop farmers and project parties.

In order to get rewards, airdrop farmers spend a lot of time and money, and conduct a lot of meaningless interactions, thinking that they deserve a lot of rewards; while the project owners are more willing to distribute rewards to real users who contribute to the reputation of the project. These two are contradictory, but a few years ago, anti-sybil resources were scarce, and the airdrop threshold was lowered, which made it normal for most people to make profits. Many airdrop farmers just wanted to get rewards, and abandoned the project after the airdrop was issued, so the airdrop could not achieve the expected effect of the project owner.

A typical example of this phenomenon is LayerZero, where the user usage rate dropped sharply after the airdrop (as shown in the figure below). It can be said that the so-called strange phenomena and changes in the current airdrop track seem to be returning to the original, that is, no longer allowing users who have not really contributed to the ecosystem to gain benefits.

(Photo credit: @Axel_bitblaze69)

Jupiter Co-founders previously stated that airdrops are a gift to early users, not a reward, loyalty program, or growth method. However, after the Arbitrum airdrop, the influx of a large number of studios broke the balance between early users and project owners. Bryan Pellegrino emphasized that user donations are not mandatory, and receiving airdrops is not a matter of course.

Nowadays, the large-scale "anti-scam" has greatly cooled down the gold rush of airdrops, and the illusion of false prosperity has gradually disintegrated. For project parties, ecological construction has also begun to return to rationality. They need to think about how to attract normal users and avoid the erosion of automated witches as much as possible. Whether it is light filtering or excessive hunting, it will cause dissatisfaction and condemnation in the community. For wool parties, the era of high odds and big money in airdrops has passed. When participating in airdrop activities, they should lower their expectations and stop dreaming of making a fortune by relying on on-chain interactions. This is a really wise move.

In any case, airdrops are either a problem of scarcity or uneven distribution. Today, the market capacity of the entire Web3 is close to saturation. With the rampant wool party, getting rich through airdrops has become a bubble.