ZkSync Faces Backlash Amid Token Airdrop Controversy

Ethereum’s Zero-Knowledge (ZK) Layer-2 scaling solution, zkSync, is facing backlash from the crypto community after its recent ZK token airdrop announcement. Community members have expressed concerns about the lack of anti-Sybil filtering and the “unfair” token distribution.

ZkSync Faces Backlash

On Tuesday, zkSync announced the upcoming airdrop of its ZK token and the distribution plan. According to the announcement, 17.5% of ZK’s 21 billion token supply will be airdropped to 695,000 eligible wallets on June 17.

Additionally, 33.3% of the token’s supply would be distributed between the project’s team and investors. The allocation was meant to reward early users and long-time supporters among zkSync’s community.

Per the post, eligible users could receive up to 100,000 ZK tokens depending on the criteria they had met before the March 25 snapshot. However, the project faced criticism after users started to check their allocation.

Online reports revealed that some community members were not content with their rewards. Despite being active long-term users, many investors claimed to have received a lower token allocation than others with less activity.

Similarly, several users complained of not being eligible for the airdrop despite their volume and transaction history and meeting the criteria. One X user shared being in the top 0.04% of wallets and receiving only 1,023 ZK tokens, while wallets with significantly less activity registered after the snapshot got the maximum allocation.

Various top-ranking projects built on zkSync have expressed disappointment after not being included. NFT project zkApes and NFT marketplace Element shared they had not received any airdrops despite generating between $15-$20 million in gas fees for the network.

Moreover, zkApes, Element NFT, and other projects have formed a coalition to “keep the pressure” on zkSync’s team and negotiate a token allocation, which would be distributed between their communities. Critics expressed their desire for “transparency and fairness.”

A Lack Of Anti-Sybil Filtering?

Mudit Gupta, Chief Information Security Officer (CISO) at Polygon Labs, called the situation the “most farmable and farmed airdrop ever.” Gupta highlighted the lack of anti-Sybil filtering and claimed that “anyone who knew the criteria could’ve easily farmed the shit out of it.”

Similarly, Adam Cochran, partner at Cinneamhain Ventures, considers the airdrop not well-planed from a Sybil perspective. He pointed out that the criteria were “easy to not hit as a real user, and easy to hit as a farmer.”

Many users believed that the controversial criteria were not zkSync’s responsibility but that the crypto analytic firm Nansen was at fault. However, Nansen clarified they had not been involved with the ZK airdrop.

In an X post, the firm stated that they provided data to Matter Labs, zkSync’s developing company, in the past. The information provided included data about the wallets of some whales and known scammers. Additionally, they explained they did not do any anti-Sybiling or give any advice on the token allocation.

It’s worth noting that the project decided not to use any anti-Sybil criteria for the airdrop as it was considered an “incomplete approach.”

(…) It’s tempting to eliminate bot swarms by applying strict sybil criteria. But Sybil detection often cuts out real users with arbitrary filters. This was an incomplete approach for the ZK airdrop. The ZK airdrop focuses on identifying real users using a human-first approach.

According to online reports, Sybil wallets are estimated to receive around $135 million ZK tokens from the airdrop, based on an initial list provided by LayerZero Labs. Since then, the Sybil list has been discarded by Bryan Pellegrino, CEO of LayerZero.