An unknown individual generated 21,877 Sybil wallets, a token, and even launched a DEX just to fake on-chain activity.
An individual has made a whole ecosystem with its own token, and wallets, and even launched a decentralized exchange (DEX) just to fake on-chain activity.
According to a DeFi analyst @lingland09, the individual funded 21,877 Sybil wallets with very small amounts of ether and then deployed a smart contract for a token dubbed gemstone (GEM). Later, the coder developed a personal non-open sourced DEX “just for indirectly applying transactions between his wallets,” @lingland09 explained.
Once the exchange was up and running, the individual added liquidity to GEM tokens with 80 ETH to make the artificial token valuable.
To automate the whole process, the coder made a trading bot, generating ten transactions with $10,000 in volume on the zkSync Era network. Although the reason behind the activity remains unclear, @lingland09 suggests the coder is a “professional airdrop hunter” who might be faking activity on the zkSync Era network to prepare for a possible airdrop.
In March 2023, crypto. news reported that Arbitrum’s airdrop for its governance token, ARB, faced significant Sybil activity, exacerbated by what experts call “ineffective” detection rules. A crypto security researcher, X-explore, found that Arbitrum’s Sybil detection rules had flaws, exploited by almost 280,000 same-person and over 148,000 Sybil airdrop addresses.