Quick Take:

• LayerZero: A cross-chain communication protocol.
• Message count dips from 348,000 on April 30 to 70,000 by May 5.
• Excerpt from The Block’s Data & Insights newsletter.

Airdrops have become a focal point of intrigue within the crypto sphere, with LayerZero emerging as a notable player in this arena. Serving as a cross-chain communication protocol, LayerZero recently underwent an eventful period marked by a significant decline in daily messages, indicative of broader developments within the platform.

Amidst the anticipation surrounding its token launch, LayerZero conducted a snapshot for its airdrop, a pivotal moment determining eligible addresses, on May 1. However, details regarding the token launch remain scant, with the protocol poised to unveil more information in due course.

In its endeavor to combat sybil farming – a practice wherein users engage with the protocol solely to maximize their airdrop allocation – LayerZero Labs devised a unique strategy. This approach aims to prioritize genuine platform users over opportunistic sybil farmers, aligning with the overarching objective of fostering a community committed to decentralized governance.

Central to this strategy is the allowance for sybil farmers to self-report, thereby receiving a reduced allocation of 15% compared to what they would have otherwise obtained. This reporting period spans two weeks, during which non-compliance risks receiving no allocation at all, as flagged by LayerZero Labs’ internal sybil report.

The initiative saw over 100,000 addresses engage in self-reporting by May 14, facilitating the identification of a substantial number of non-reported sybil entities. Subsequently, LayerZero, Chaos Labs, and Nansen undertook comprehensive analyses, collectively identifying over 803,000 such entities.

Following the elimination of sybil clusters through meticulous analysis, LayerZero introduced the “bounty-hunter” phase, allowing users to report suspected sybil addresses and claim a portion of their airdrop allocation as a reward. However, this program encountered a temporary halt due to overwhelming response, reflecting the gravity of the issue at hand.

The repercussions of these measures reverberated across LayerZero’s activity, with the number of daily messages witnessing a stark decline. From 348,000 messages on April 30, the count plummeted to a mere 70,000 by May 5, reaching levels unseen since March 2023. This dip underscores the magnitude of the task at hand in identifying and addressing sybil farming within the ecosystem.

As LayerZero navigates this pivotal phase, the community eagerly awaits the resolution of this experiment and its implications for participant access to airdrop allocations.