Wormhole Airdrop: Eligibility and Distribution Insights
Wormhole has not just pulled back the curtain on the details of its airdrop; it’s also given LayerZero airdrop hunters and Sybils (hackers using multiple accounts) much to think about.
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After the announcement of Wormhole's airdrop, the project's community faced confusion over its criteria. Participants who showed less activity surprisingly received more tokens than their more active counterparts. By providing more details on the token distribution, the project team eased community unrest and addressed lingering questions.
In this piece, we delve into Wormhole’s approach to clustering user wallets across various networks, identifying genuine protocol participants, and determining token distribution amounts.
Cryptocurrency Wallet Clustering
Wormhole serves as a foundational (Layer 0) protocol, enabling transactions between diverse blockchains. Its protocol's ecosystem applications rely on a complex architecture that allows users to manage several crypto addresses at once.
For instance, to swap USDT from Ethereum to Solana, a user must engage with both blockchains—employing Metamask for Ethereum and Phantom for Solana.
Identifying users eligible for the airdrop becomes a challenge as Wormhole needs to:
- Link active addresses across various blockchains;
- Log the volume, transaction count, and other interaction metrics in each network.
To address this, Wormhole developed an ownership graph that assigns a unique ID to a cluster of a user's wallets, incorporating those that interacted with Wormhole ecosystem apps such as Pike, Mayan, Allbridge, or Portal. The exact criteria for grouping wallets remain undisclosed—possibly based on the user's IP address when connecting to dApps or certain on-chain interaction details.
User's crypto wallet clustering. Source: wormhole.com
The evaluation of user activity took into account all transactions conducted, rather than being confined to a particular ecosystem. Furthermore, even if certain wallets (like wallets D and E in the example above) didn't directly engage with each other, their activities were nonetheless integrated with those of others.
Rewards were distributed across all wallets belonging to the same cluster. Therefore, if you've verified the ownership rights for the W token solely on EVM-compatible networks, make sure to do so for all other blockchains as well.
The Hunt for Sybils
A Sybil attack involves a hacker creating numerous fake accounts to masquerade as genuine users. Crypto projects, during their airdrops, implement strategies to detect and counteract such fraudulent activities.
Funding Source: To interact with the protocol, users must deposit cryptocurrency into their wallets. For a Sybil managing hundreds or thousands of wallets, this becomes a daunting task.
Typically, inexperienced Sybils opt for one of two funding methods, as identified by Wormhole:
- Diffuse funding: Wallet A funds wallets B, C, D… Z in a scattergun approach;
- Sequential diffuse funding: Wallet A funds Wallet B, which then funds Wallet C, and so forth.
The craftiest yet still novice hackers attempt to disguise their tracks by using multiple wallets for funding, betting that a handful of interconnected wallets will go unnoticed by the protocol. Nevertheless, these attempts usually end up being exposed.
Two methods Sybils employ to top up crypto wallets. Source: wormhole.com
Following Arbitrum's lead in filtering out linked crypto wallets during its airdrop, Sybils proposed a new, albeit previously existent, method of deposit: utilizing centralized exchanges (CEXs).
CEXs' wallets are flagged in the blockchain, theoretically clearing any doubts about the legitimacy of the incoming funds. Transactions are conducted through main exchange accounts and sub-accounts for withdrawals.
The Wormhole team highlighted their use of the Louvain method for detecting communities—a sophisticated algorithm for identifying relationships within large networks—to spot Sybils. This approach helped differentiate between legitimate users and hackers by analyzing deposit timings, amounts, and subsequent activities.
Transaction Spamming: A hallmark of Sybil attacks is the rapid-fire execution of transactions, often involving the same amount of tokens between a single or multiple wallets, with a discernible pattern.
Transaction spam between two or more wallets. Source: wormhole.com
Genuine users might inadvertently fit this profile, prompting Wormhole to reevaluate such cases. If you believe you've been wrongly identified as a Sybil, there's a petition form available for rectification.
Adopting such stringent measures discourages blind adherence to “guide-based” airdrop hunting. Despite being a bona fide user, the project might still mistake you for a Sybil if the guide you followed has been widely circulated among the crypto community.
Take guides with a grain of salt: Treat them as navigational tools rather than step-by-step instructions for activity completion.
Wormhole Airdrop Criteria Explained
The Wormhole airdrop was determined by several key factors, including the volume and number of transactions made through the protocol. Beyond these basics, the team introduced bonus mechanisms that amplified the distribution of W tokens.
While the threshold for the minimum number of transactions was not made clear, insights were offered regarding transaction volume. This volume was assessed through a coefficient influenced by the transaction's date, asset, and network used. The entry barrier averaged $1,500, lower for early adopters of Wormhole and higher for those joining later.
Eligibility for the bonus multiplier hinged on several criteria:
- Consistent activity span: 3 months;
- Initial interaction with Wormhole: December 1, 2023;
- Bear market engagement: June 2022 – October 2023;
- Early post-mainnet interaction: 1 year;
- Transaction volume threshold: $10,000;
- Preferred transaction network: Ethereum;
- Key DeFi transaction assets: BTC, ETH, and stablecoins.
Details such as the coefficients, reward mechanisms, clustering algorithms, and Sybil attack countermeasures will be disclosed post-airdrop by the Wormhole team.
In addition to rewarding on-chain activities, which represented 81% of the airdrop tokens, community members of Wormhole and participants from other ecosystems also received W tokens.
Wormhole airdrop specifics for community members. Source: wormhole.com
Wormhole Discord Members were allocated tokens based on their server roles: Spacewalkers received 8,000 W, Wormhole Fellows 14,000 W, and Extraterrestrials 16,000 W.
Zealy Quest Platform engaged users in creating memes, illustrations, and promoting Wormhole on social media. The top 500 Zealy Wormhole quest participants were each awarded 2,000 W.
Pyth Network Stakers, an oracle network bridging traditional and blockchain data, saw the top 10,000 wallets by staking volume awarded 2,000 W each. Notably, Pyth was mentioned in our list of the top staking coins with potential airdrops.
DeGods/y00ts NFT Community participants who bridged these collections' NFTs via Wormhole and held relevant roles in the Wormhole Discord received between 2,000 to 10,000 W.
Bad Kids NFT Community role holders in Discord were each given 7,000 W, totaling 971 users.
Mad Lads NFT Community saw its NFT holders, also part of the Discord with corresponding roles, receive 16,000 W per NFT. With 20% of the W tokens unlocking at TGE and the remainder over a year, the rewards are soulbound to the NFT, ensuring the NFT owner receives the tokens.
Monad, the highly anticipated EVM-compatible blockchain with parallel processing capabilities, awarded users 8,000 W for their Discord role.
Galaxe Participants from the 2022 Solana Wormhole Galaxe campaign received 1,000 W each, with a total of 5,504 users benefiting.
Closing Thoughts
LayerZero stands as Wormhole's main competitor. Thus, for a better chance at obtaining ZRO, users are advised to reassess their engagement with this protocol. Refer back to the Wormhole airdrop criteria section to ensure compliance with your LayerZero wallet.
By adopting the Soulbound principle for Mad Lads rewards, Wormhole has revolutionized the intrinsic value of NFTs. NFT holders are now incentivized to retain their tokens long-term rather than flipping them quickly post-airdrop.
It remains to be seen if Wormhole's airdrop criteria will become a blueprint for future projects. Since crypto involves inherent risks, aligning your LayerZero activity with Wormhole's standards should be weighed carefully against your own risk management strategies.
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