Sybil Accounts: The Big Risk New Airdrop Farmers Are Overlooking

If your address is identified as a Sybil account, you could lose thousands of dollars in airdrop rewards — now and into the future.

By James Edwards

It's estimated that 17,000 users were rejected from the Optimism token airdrop after being identified as Sybil accounts, costing those users a collective $18,620,000 worth of tokens, according to The Defiant.

Being identified as a Sybil account means that an algorithm has recognized you as operating multiple wallet addresses for the sole purpose of airdrop farming. This activity is frowned upon, as you are supposedly not adding genuine value to the chain and instead are trying to game the airdrop for your benefit.

Whether this criticism is fair is up for debate, but previous high-profile airdrops like Optimism and Arbitrum excluded Sybil accounts from receiving airdrop rewards. 

This means that all your hard work — which can cost days of your life and potentially hundreds of dollars in fees and funds — was all for nothing. 

Worse still, you miss out on a payday that could be worth thousands of dollars. The Uniswap token airdrop was famously worth $12,000 at its peak, while some lucky Optimism users received over $30,000.

In addition to whatever rewards you miss today, you stand to lose rewards from future airdrops.

If your address is identified as a Sybil, it could be blacklisted and excluded from future airdrops by other protocols.

This happened to Sybil accounts that were identified during the Hop Protocol airdrop — they were later excluded from the Artibtrum airdrop, which was worth over $10,000 for the most active addresses.

With rumored airdrops for zkSync, Linea, Scroll and Polygon zkEVM, this could easily cost you tens of thousands in rewards if you're an active airdrop farmer.

How to prevent being identified as a Sybil account 

If you only use a single wallet for airdrop farming, then you typically have nothing to worry about.

Sybil accounts typically refer to people who operate more than one address in the hopes of getting an oversized reward. 

But it's key to understand that even if you only have one address at risk of being identified as a Sybil, it still has the potential to infect any related addresses. For instance, other addresses that you've sent funds to or from your primary address. 

A few best practices can help prevent being identified as a Sybil account. But keep in mind that this is an evolving space, and projects may implement new rules to determine airdrop eligibility.

• Isolate your addresses. Use separate addresses that have never interacted with each other (i.e., transferred funds to or from each other). You can use a free service like Arkham Intelligence to check if your addresses have ever transacted with each other.
• Build a transaction History. Make sure your wallet has a transaction history prior to your airdrop farming activity. You should look like you use a blockchain for purposes other than airdrop farming.
• Use different devices. Consider using separate wallets spread across different devices, such as a desktop computer, laptop and phone. This helps create a different mental space for each address and reduce the likelihood you make a mistake.
• Vary your transactions. Avoid making the same type of transactions across multiple wallets at the same time. Variety is key. Consider interacting with a variety of protocols rather than the same one over and over at the same time of day with the same amount of funds.
• Participate in governance. Participate in blockchain governance. If you own existing airdrop tokens, consider participating in an on-chain vote to demonstrate you're an active member of the community.
• It's rumored that Arbitrum tracked the IPs of computers that used any of the Arbitrum foundation's services — like their official token bridge or airdrop claiming utility. If one IP was tied to multiple addresses, they were excluded. While blockchains don't record IPs, the websites you use to interact with the blockchain often do. 

This might seem like a lot to remember, but the tl;dr is pretty straightforward — operate each wallet as though it were owned by a different person, and you should be okay. 

The main takeaway is to avoid transactions between addresses, as this is the biggest giveaway they're operated by a single individual.

Maintain your wallets diligently, and you could earn a tidy sum — get sloppy, and you stand to lose months of hard work.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.