Crypto Projects Grapple with Increasing 'Sybil Attacks' Amid Lucrative Airdrop Events
Summary:
The article discusses the increasing instances of 'Sybil attacks' in the crypto world, particularly during potentially profitable airdrop events. These frauds involve the creation of numerous fake accounts to garner as many digital coins as possible. Instances from Degen and Bitget Wallet's experiences combating these attacks are shared. Despite identifying these dishonest activities, addressing such attacks remains a challenge for development teams. The surge in such attacks, however, has had a positive impact by pushing crypto projects to develop more sophisticated user-verification methods for ensuring fair airdrop distribution.
As digital currency prices rocket, scammers riding the wave are increasingly launching 'Sybil attacks' - named after a novel's protagonist with multiple personalities. During highly profitable airdrop events, attackers use these counterfeit accounts to stimulate false network activity and secure as many digital tokens as possible. "We have recently taken measures to ban around 2,000 users believed to be involved in Degen farming," revealed the team behind the Degen memecoin project, a product of the Farcaster social media protocol. They warned that involvement in such tactics via planned posting or fake engagement could lead to exclusion. Active until 1st of August, the Degen airdrop incentivizes users to engage with and generate high-quality posts on Farcaster channels. However, some users have reportedly been posting low-quality content to collect airdrop points. Degen creators have stated that coordinated efforts to earn tokens or unrelated boosted channel posts will result in bans.
Sybil attacks, unfortunately, aren’t new. On 4th April, Bitget Wallet, a self-custody wallet, declared that it would remove airdrop points from users employing “emulators and cloud phones” to create deceptive wallet referrals and downloads to farm BWB tokens. The staff penned: “Ensuring fairness and integrity is our top priority, and we will not tolerate any dishonest practices contravening the event's code of conduct.” The Bitget Wallet airdrop, which has been ongoing for a month, ends on 27th April. Users can earn rewards by referring friends to deposit tokens or conduct decentralized finance (DeFi) swaps via the wallet. Despite recognizing this issue, curbing Sybil attacks remains a challenge.
“To avoid accidentally penalizing genuine users, we’ve only deducted points from the top 50 users found to boost their referral points dishonestly,” assure the Bitget Wallet developers. Earlier this year, renowned DeFi developer Banteg pointed out an issue with the Ethereum layer-2 protocol Starknet and its airdrop. Banteg determined around 1854 users who had either changed their account names or deleted them following the activity snapshot and around 701,544 addresses believed to be associated with duplicate or rebranded GitHub accounts managed by airdrop farmers. However, the addresses of these farmers were nonetheless included in the Starknet airdrop. Following its launch, Starknet's fully diluted valuation briefly exceeded $20 billion. The airdrop is still active and continues until June.
A Gamic HQ study in August highlighted that to execute a Sybil attack, airdrop farmers "use scripts or bots to construct a vast number of bogus accounts on specific platforms," that subsequently automate activities like "generating random usernames and emails, completing registration forms, and verifying accounts with CAPTCHAs." The study also indicated that such attacks centralize a significant portion of the airdropped tokens, which leaves fewer tokens for actual users invested in the project's long-term sustainability. Consequently, this could damage the project's image, inflate its token supply, and potentially lead to price manipulation due to excessive dumping by airdrop farmers post-event. However, Gamic HQ also identified several benefits emanating from these attacks. The surge in Sybil attacks has compelled blockchain projects to devise enhanced methods for user identity verification and fair airdrop distribution. This ongoing saga might ultimately contribute to a more fortified and secure blockchain eco-system, according to the researchers.
Published At
4/23/2024 10:01:28 PM
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