UNCHAINED: LayerZero Fought the Sybils and Airdropped Its Token. Did the Team Win?
Jun 21, 2024
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Founder Bryan Pellegrino discusses LayerZero's ZRO token launch, controversies, anti-Sybil campaign challenges, mandatory donation to Protocol Guild, and reflections on airdrop distribution strategies. The episode explores the complexities of detecting Sybil accounts, community response, security measures, and recent crypto developments.
LayerZero implemented an anti-Sybil campaign for ZRO token distribution with a mandatory donation requirement.
Bryan Pellegrino discussed challenges in genuine user participation and the option for self-reporting Sybil attackers.
The episode unravelled over a million fraudulent accounts uncovered through the anti-Sybil campaign.
Kraken faced extortion accusations by CertiK after a bug exploit led to a $3 million withdrawal.
NASDAQ files for a Bitcoin and Ethereum ETF offering diversified exposure and 70% Bitcoin allocation.
Athena's controversial governance token changes face backlash for mandating a 50% lockup post-inaugural airdrops.
Deep dives
Disclosure of the Trump-Linked DJT Token Creation Confession
Former pharmaceutical executive Martin Shkreli admits co-creating the controversial Trump-themed DJT token in collaboration with Barron Trump during an X-Spaces event following an extensive investigation led by blockchain sleuth Zack XBT and crypto-trader Gigantic Rebirth. Shkreli initially denied involvement, leading to a $100 million bet by Gigantic Rebirth challenging the token's authenticity. Upon providing evidence to Arkham Intelligence, Shkreli confessed, revealing over 1,000 pieces of evidence.
CFTC Investigates JUMP Crypto Over Crypto Trading
The Commodity Futures Trading Commission initiates an investigation into JUMP Crypto, the crypto division of Chicago-based trading firm JUMP, focusing on their trading and investment activities in the blockchain sector. JUMP Crypto faced challenges, including a $325 million hack and losses from the FTX collapse, leading to regulatory scrutiny from the CFTC. The investigation adds to previous SEC and Justice Department cases involving JUMP Crypto's operations.
SEC Concludes Ethereum 2.0 Probe by ConsenSys
The U.S. Securities and Exchange Commission (SEC) concludes its investigation into Ethereum 2.0 conducted by ConsenSys, marking a significant win for Ethereum and its supporters. ConsenSys reported the investigation's closure following a letter sent to the SEC seeking clarification on Ether's classification. This outcome follows ConsenSys' lawsuit against the SEC challenging Ether's status, advocating for its treatment as a commodity in the market.
Kraken Accuses CertiK of Extortion in $3 Million Bug Exploit
Major crypto exchange Kraken accuses security firm CertiK of extortion after a bug exploit leads to the withdrawal of nearly $3 million from Kraken's treasury. Kraken's Chief Security Officer Nick Percoco reveals that a critical bug allowed users to inflate their account balances artificially. CertiK reportedly demanded details on the bug's impact before returning the funds, leading Kraken to label their actions as extortion. The bug exploit and subsequent demand for disclosure create tension between Kraken and CertiK.
NASDAQ Files Combined BTC-ETH ETF as Ethereum ETF Issuers Respond
NASDAQ files for a combined Bitcoin and Ethereum ETF, managed by hashtags, offering a diversified exposure to the cryptocurrency market with a 70% Bitcoin and 30% Ethereum allocation. The filing follows Ethereum ETF issuers addressing SEC feedback on their S-1 forms, aiming to launch these ETF products by July. Ethereum ETF issuers react to SEC comments, expecting revised submissions soon, with product launches on the horizon.
Time .Fun Social Platform Launches Tokenizing Time
The newly launched social platform Time .Fun on BASE network offers users the ability to tokenize their time, where each token represents a minute of user time, allowing for tokenizing, trading, and interactions with creators. Meme coin trader Ansem and Helium's co-founder Mertmamtaz have engaged with the platform, showcasing its endeavor to make time a tradable asset and enable personalized interactions.
Athena Updates Tokenomics with Pivotal Lockup Requirement
Synthetic dollar protocol Athena introduces controversial changes to its governance token Ina's tokenomics by mandating a 50% lockup for recipients of Ina airdrops within Athena, Pendle Finance, or restaking pools, sparking backlash from users. The forced lockup aims to align USD stablecoin usage with INA token interests but faces criticism for undermining token holder governance rights and disregarding future airdrop distributions.
ZK-SYNC Airdrop Sees Trading Activity Below Expectations
The highly anticipated ZK-SYNC airdrop experiences lackluster trading performance, opening around 30 cents and dropping by 30% to approximately 21 cents, despite over 2.62 billion ZK tokens claimed worth $630 million within the first 10 hours. Notably, 40% of the top 10,000 addresses immediately sold their full airdrop allocation, contributing to the subdued market performance of the token.
SEC Pushes Back on Ripple's Attempt to Reduce $2 Billion Fine
The SEC opposes Ripple's efforts to reduce a proposed $2 billion fine for selling XRP to institutional investors, arguing against comparing this case to a recent Terraform Labs settlement due to differing circumstances. Ripple aims to reduce the fine to $10 million, citing distinct fraud allegations and penalty calculations. The legal dispute over the fine reflects Ripple's ongoing legal battles with the SEC regarding XRP sales.
Disclosure of the Future of Airdrops Lead by Ripple
Ripple's insightful sentiment on the future of airdrops in the crypto industry emerges amid their fines and investigations by the SEC over XRP sales. Ripple highlights the current discrepancies in airdrop efficacy and the need to evolve distribution strategies to foster genuine engagement and alignment between protocols and users. As Ripple navigates regulatory challenges, its perspective on airdrop evolution provides industry insights.
Summary Conclusion
The podcast covers a spectrum of crypto-centric topics, including the disclosure of Martin Shkreli's involvement in the Trump-linked DJT token creation, regulatory scrutiny of JUMP Crypto by the CFTC, the SEC's closure of the Ethereum 2.0 probe, and Kraken's extortion accusations against CertiK. NASDAQ's innovative ETF filing, the launch of Time .Fun social platform, and Athena's updated tokenomics provoke discussions. ZK-SYNC's airdrop trading performance and the SEC-Ripple legal tussle add depth to the dynamic crypto landscape.
LayerZero’s token ZRO is now live. Founder Bryan Pellegrino delves into all the controversies, challenges and criticisms of its anti-Sybil campaign—and its requirement of a donation to the Protocol Guild.
LayerZero’s token claims went live on Thursday, and as with every recent airdrop, there was plenty of controversy.
In this episode, Bryan Pellegrino, cofounder and CEO of LayerZero Labs, joined to discuss their ambitious anti-Sybil campaign and the subsequent token distribution. He delved into the challenges of ensuring genuine user participation, the decision to offer a self-report option for Sybil attackers, and the complexities imposed by industrial-grade farmers. Bryan shared what he would have done differently and why a mandatory donation to Protocol Guild was imposed.
Also, are airdrops dead? How can the industry improve this not-so-effective distribution method?
Show highlights:
0:30 Why LayerZero launched an anti-Sybil campaign with its airdrop, and what challenges they faced in ensuring genuine user participation
4:00 Why LayerZero offered a self-report option for Sybil attackers, and how this strategy revealed both the complexities and the creativity within the crypto community
09:28 How the anti-Sybil campaign uncovered over a million fraudulent accounts
12:43 What Bryan would have done differently in their campaign
15:33 What alternative methods, such as KYC and proof-of-humanity protocols, LayerZero could have used for their anti-Sybil campaign
16:53 How LayerZero navigated the cat-and-mouse game with industrial airdrop farmers
21:30 Why they decided to impose a donation to Protocol Guild to claim the ZRO token
30:33 What caused the dramatic drop in LayerZero's activity post-announcement of their anti-Sybil campaign, and why the team is optimistic despite the decline
33:53 LayerZero's plans for future airdrops
37:11 What Bryan thinks the future holds for airdrops in crypto, and how the current broken system can be improved to achieve better distribution and user engagement
Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com
Unchained Podcast is Produced by Laura Shin Media, LLC. Distributed by CoinDesk. Senior Producer is Michele Musso and Executive Producer is Jared Schwartz.
