LayerZero Flags 800,000 Potential Sybil Addresses, Down from 2 Million Identified Initially

LayerZero Labs has identified a total of 800,000 addresses as potential sybil addresses, rendering them ineligible for the full token allocation.

Initially, the team had identified over two million addresses as potential sybils, but they later refined their criteria to minimize false identifications.

In a recent post on X, the team announced the end of the sybil self-reporting phase in their initiative to combat sybil activity, commonly known as “airdrop farming.”

The project aims to address the issue of users creating multiple fake accounts to gain unfair advantages in token allocations.

According to LayerZero, addresses meeting the specified criteria will receive 15% of their expected token allocation, while the remaining 85% will be redistributed to eligible users.

LayerZero Reveals List of Sybil Addresses

The complete list of addresses, including both self-reported ones and those identified through initial examinations conducted by LayerZero, Chaos Labs, and Nansen, has been made public.

On May 3, LayerZero introduced a self-reporting mechanism, offering sybil users 15% of their planned token allocation as a reward for honesty within a defined 14-day period. 

The team clarified that the initial analysis aimed to identify large-scale industrial sybil clusters and that the released list aims to exclude these clusters from bounty hunting eligibility.

However, it should be noted that the list is not considered definitive until the final report is published, as addresses may be removed or added as calculations are refined.

The sybil self-report phase has now concluded. Each self-reported address will receive 15% of its intended token allocation, with the remaining 85% returning to qualified users.

Between the sybil self-report and analysis by LayerZero, @chaos_labs, and @nansen_ai, 803,093… pic.twitter.com/wH9eFcMWV5

— LayerZero Labs (@LayerZero_Labs) May 18, 2024

The sybil bounty hunting process commenced on May 18 at 2:00 pm UTC and will continue until May 31, 11:59 pm UTC.

Participants are required to report a minimum of 20 addresses along with a clear methodology to be eligible for a reward of 10% of the intended token allocation for each reported sybil address.

The bounties will be awarded to the first eligible reporter of a specific address.

The LayerZero team is continuously working to improve the accuracy of their methodology, but the initial list of identified addresses will remain unchanged throughout the bounty hunt.

Bounty hunters can proceed with their work without concerns about the initial list, as the final and authoritative list will be shared once the bounty hunt concludes.

Sybil Farming Becomes Prevalent

Sybil farming, the act of creating multiple fake accounts to unfairly acquire tokens or rewards, has become a prevalent issue in decentralized finance protocols.

Airdrops, which reward early users with newly issued cryptocurrencies, are widely employed by these protocols to generate more engagement.

LayerZero’s ZRO was the first Hyperp (Hyperliquid-only perp) to launch on the HyperLiquid perpetual futures decentralized exchange in September 2023.

Instances of sybil farming have been observed in the crypto space before

In 2022, Optimism disqualified over 17,000 suspected wallets engaged in sybil activity from its airdrop, accounting for 6.83% of eligible wallets.

Similarly, in September, a network named ZkSync Era discovered 21,877 wallets involved in sybil farming activities, where the wallets were transacting a closed-source token among themselves using a private decentralized exchange.

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