Author: Mia, ChainCatcher
Editor: Marco, ChainCatcher
In addition to participating in airdrops, A-ge’s other focus recently has been on filling out appeal forms. All 200 accounts and 100 premium accounts in his studio were flagged by LayerZero as witch accounts.
“To increase the chances of a successful appeal, our team uses chatgpt to write appeals, providing different reasons for each account, and even using different languages. The core idea is to prove ‘I am a real user,'” A-ge told ChainCatcher.
Following LayerZero’s requirements, Hua-jie filled out an appeal form, stating that her “luma” account is personal and not a witch account associated with the studio.
Previously, Hua-jie had worked hard for six months on 20 personal accounts, all of which were deemed witch accounts by the project. In the extensive “witch-hunt” campaign by LayerZero, she became a target. “I wanted to earn money through airdrops, but instead, I ended up losing money,” Hua-jie lamented to ChainCatcher.
As for whether it will be effective, both A-ge and Hua-jie expressed that they are doing what they can and leaving it to fate. “There are too many accounts to appeal, and the project team can’t possibly review them all.”
According to a report released by LayerZero, there are 800,000 addresses that potentially belong to witch accounts. Although the final list has not been published, it is expected to be substantial.
This “witch-hunt” operation has elevated the battle between the project and the “luma” community to a new stage: scrutiny, self-disclosure, and incentivized reporting. These terms, which contradict the spirit of crypto freedom, have sparked controversy.
The “luma” enthusiasts, who once held the upper hand, are losing their advantage as the Web3 industry develops step by step.
Both sides have valid reasons: the project team wants to airdrop tokens to genuine users rather than studios that immediately sell them off upon launch, while the studios argue that they have invested real money to help the project improve its data and test its performance, only to be abandoned.
On May 30th, LayerZero’s “witch-hunt” campaign officially ended, but Hua-jie and A-ge are still awaiting the verdict.
LayerZero, the “hot cake”
A-ge has been involved in the crypto community for a long time. When his mining business faced suppression, he switched to the airdrop track.
With the original research and technology team from the mining farm, as well as the connections he had built in the industry, a sizable airdrop studio was established.
In his view, every large-scale airdrop is a long-term investment. The team focuses on researching the financing teams behind the projects and prioritizes projects invested in by well-known institutions such as A16Z, Paradigm, and Coinbase. Large funding is the norm.
In the early days of the studio, they had successfully participated in airdrops for projects like ARB, Aptos, Sui, and Wormhole, achieving decent returns despite the overall market downturn.
LayerZero’s natural advantages of a strong financing team and high valuation caught A-ge’s attention.
In March 2022, LayerZero, a cross-chain interoperability protocol aiming to become the “easiest and most lightweight way to transfer information,” completed its Series A+ funding round of $135 million, entering the Web3 unicorn club with a valuation of $1 billion. Institutions such as A16Z, Sequoia Capital, and Coinbase Ventures participated in the investment.
In April 2023, LayerZero completed its Series B funding round, raising $120 million and increasing its valuation to $3 billion. Traditional capital was also introduced in this round. At the completion of the funding round, LayerZero announced that it would consider “governance token airdrops.”
With such substantial funding and the expectation of airdrops, LayerZero became a “feast” eagerly awaited by the “luma” community.
Individual “luma” enthusiasts and studios started to prepare, and reports and tutorials on how to participate in the airdrop spread throughout the community.
LayerZero’s on-chain interaction data also experienced explosive growth. Since the funding announcement in April last year, the on-chain interaction on LayerZero started to surge, with daily transaction volume exceeding 200,000 and the official cross-chain product, Stargate, also experiencing a significant increase in transaction volume, with around 150,000 daily transactions.
A-ge was also actively preparing. The technical team used code to generate 200 “luma” wallets and an additional 100 premium accounts, marking the beginning of a six-month-long airdrop campaign.
A-ge explained that the team would engage in designated daily interactions to ensure that each address meets the airdrop criteria and that the accounts are kept separate.
Increasing Costs
The “luma” community’s sunk costs are accumulating during LayerZero’s interaction campaign.
Due to the high and opaque fees, LayerZero’s cross-chain product, Stargate, became known as the “cross-chain assassin” among the “luma” enthusiasts. Many users only discovered the exorbitant fees when they had to pay for GAS, and the fees were not uniform across different cryptocurrencies.
A-ge stated that they had to endure Stargate’s high cross-chain fees for the sake of participating in LayerZero’s airdrops.
Hua-jie also despised this situation. She mentioned that she had purchased some STG tokens at a price of $0.9 per token for staking purposes, only to suffer a significant loss in value due to the overall market downturn.
When talking about the costs of participating in the airdrop, A-ge stated that the cost per account for LayerZero was over 200U, with a target of receiving around 1000U in airdrops per account. “To be on the safe side, we also used 100 premium accounts for interaction to ensure we won’t be disqualified.”
Hua-jie, on the other hand, mentioned that this was her first time using multiple accounts for participation. Since her previous single account had received decent airdrop rewards, she decided to take a risk this time. The overall cost amounted to around 3000U.
However, when the potential witch addresses were announced, both A-ge and Hua-jie were dumbfounded. A-ge’s studio accounts, along with the 100 premium accounts, were all wiped out.
None of Hua-jie’s 20 accounts were spared either. She jokingly said, “I wanted to earn money through airdrops, but instead, I ended up losing money.”
The Largest “Anti-Witch” Operation in History
Their accounts were wiped out by LayerZero’s witch-hunt campaign.
On May 2nd, LayerZero officially announced the completion of the first snapshot and stated that the actual user count was approximately 5.8 million.
The next day, LayerZero announced that, out of “continuous trust in community members,” tokens would be distributed to persistent users (rather than witch users). As for witch users, LayerZero provided two options: self-disclosure, reporting their witch addresses to retain 15% of the airdrop allocation, or waiting for internal screening by the project team, after which they would not receive any tokens.
Additionally, LayerZero stated that it would collaborate with Chaos Labs and Nansen to produce the witch detection report.
This stricter witch monitoring has undoubtedly served as a wake-up call for studios and professional “luma” enthusiasts who have been eagerly anticipating airdrops and rely on them for a living. LayerZero even introduced a reporting mechanism, where successful reports would earn the reporter 10% of the tokens held by the reported account.
By the end of the self-disclosure phase for witches, it was initially determined that 803,000 addresses were potential witches, with over 338,000 addresses self-reporting as witches. EachRewritten Article:
Addresses that meet the requirements will receive 15% of the expected token distribution, while the remaining 85% will be returned to eligible users. Compared to 800,000, less than 40% of addresses chose to “surrender.”
The big cleanup is still ongoing, and LayerZero has received 3,550 “witch hunt” reports during the two-week “bounty hunt,” with each report containing at least 20 addresses that clearly indicate witch operations.
It is widely believed in the industry that the final list will “retain 6.67% – 13.33% of addresses.” However, most multi-account users and studios have already been “eliminated” in the first round of cleansing.
Conflict and love
The game between the project party and the multi-account users has been evolving.
Hop Protocol pioneered this “encirclement” plan, targeting studios for screening, focusing on suspected manipulation of multiple accounts for batch interactions; using commonly used “witch brushing” applications such as Merkly, L2 Pass, and L2 Marathon; and conducting cross-chain interactions with very small amounts.
Under various “self-exposure,” “screening,” and “denunciations,” witch screening seems to have become a “sweeping” scene of encirclement, and studios have become lambs to be slaughtered.
However, the studios are not ordinary people either.
After undergoing multiple major airdrops, most mature studios now have their own exclusive investment research teams, technical teams, and interaction teams. The act of multi-account users benefiting from rewards at nearly zero cost has gradually evolved into a professional technical team.
In the face of witch scrutiny, studios have various means to counter it, from random interaction scripts, dispersed and independent IP addresses, to stricter account isolation. There has always been a game between the project party and the multi-account users in terms of “witches” and “anti-witches.”
In the eyes of studios like Studio A, the actions of multi-account users have made significant contributions to on-chain activity, and the act of multi-account users has gradually become an important part of on-chain activity data.
As stated in Layerzero’s previous airdrop expectations, many project parties release news about airdrops and initiate Odyssey missions in the early stages of the project to encourage users to interact with studios on the chain, thus creating on-chain “false prosperity.”
The generation of a large amount of interaction data allows project parties to optimize and stress test projects in the early stages while earning business revenue.
For multi-account users, they take the risk of being unaware of the “airdrop rules” and provide free testing and on-chain contributions to project parties. As Hebi, a well-known crypto KOL, said, “The project party collects transaction fees, but we get nothing.”
Regarding this, Hebi, who is also a multi-account user and crypto KOL, expressed, “The aggressive Odyssey, PUA, everything is so intense. The act of multi-account users is over, and I’m out.”
They self-mockingly stated that they had completely become “tools” for creating false on-chain prosperity in the face of Layerzero’s anti-witch mechanism.
Controversial reporting mechanism
In the increasingly chaotic multi-account market, the “witch hunt” has gradually become a game of human nature.
When asked why they were accused of witchcraft, both Studio A and Studio B blamed the “mutual reporting” mechanism.
In their view, although they used multiple accounts for airdrop benefits, they also implemented risk control measures for high-quality accounts in consideration of witch issues. However, all their accounts were “wiped out” this time. In fact, the “mutual reporting” phase lasted from May 18th to the 31st, so it is not one of the reasons.
However, the reporting mechanism that tests human nature still arouses controversy in the crypto community.
LayerZero’s announcement states that it encourages community users to report witch behavior, and successful reporters can receive 10% of the airdrop allocation of the reported address.
This undoubtedly takes advantage of the dark side of human nature. In order to obtain a 10% airdrop reward, one can sacrifice and ignore the achievements of other multi-account players.
Hebi said, “Human nature is inherently evil, and every time witch hunts happen, you can see the dark side of human nature.”
Studio B also expressed that this is a “lose-lose” situation. They can accept Layerzero’s strict rules, but mutual reporting is definitely a “harmful to oneself and others” behavior.
Another studio that did not participate in the Layerzero multi-account activity also stated that “mutual reporting” is undoubtedly a backward behavior. It not only disgusts users but also tarnishes the project’s reputation.
“Mutual reporting” has become not only a game between project parties and studios but also a struggle between studios and individual users. For every successfully reported address, 90% of the airdrop tokens for that account will be returned to the airdrop pool. This means that the airdrop received by users will increase, and “mutual reporting” seems to be becoming a weapon for ordinary multi-account users to promote “fairness” in multi-account activities.
There are rumors that an employee of a multi-account studio chose to resign and report internal accounts, and there are even reports that a “hunter” submitted 480,000 witch reports.
Bryan Pellegrino, co-founder of LayerZero, responded on social media that anyone can write whatever they want in the report, but not every report is valid. This seems to indirectly confirm the speculation of “expanded reporting.”
LayerZero has successfully used human nature to turn the “witch hunt” into a war between individual multi-account users and studios.
Different perspectives
The multi-account race now resembles a battlefield.
The Sybil Attack phenomenon has existed since the Web 1.0 era and was first proposed by John R. Douceur of Microsoft Research Institute in 2002. It originated from the 1973 science fiction novel “Sybil.” The on-chain anonymity of Web3 has become a fertile ground for Sybil attacks. Witch attackers can easily create multiple addresses to obtain multiple airdrop rewards. They often cash out their rewards, and the large-scale dumping of airdrops has a significant impact on projects.
“Anti-witch” has always been the justice of the multi-account race and has protected the interests of project parties and the majority of individual users to some extent.
Studios, on the other hand, believe that they have made contributions to on-chain activity during interactions.
As Flower Sister said, “Everyone is using real money to interact with project parties.”
While individual users are relieved that they have not been labeled as witches, they also lament Layerzero’s strict anti-witch rules and anti-human nature.
Most studios state that although this is a “Waterloo,” any studio has experienced being targeted in the past, and a true studio will not care about this small defeat but will look to a broader market.
Some studios and professional players also expressed that multi-account activities themselves involve personal risk preferences. Not all studios are optimistic about Layerzero, and they may not consider other Layerzero ecosystem multi-account projects in the future.
In addition, some multi-account players and studios still state that they will await the final judgment.
With the end of the airdrop snapshot, Layerzero’s on-chain activity has returned to calm. Coupled with the dissatisfaction caused by the extreme “anti-witch” strategy, Layerzero’s on-chain data has reached a new low in the past year.
On May 19th, the total number of messages for the day was only 39,000, a 94% decline from the previous peak.
