Airdrops continue to generate significant drama in the crypto industry.

Today, we're focusing on LayerZero, a cross-chain communication protocol. While details about the token launch are limited, the protocol confirmed they took a snapshot for the airdrop at the end of May 1, with more information to follow.

LayerZero Labs has announced a unique strategy to combat sybil farmers—users who interact with the protocol solely to receive larger airdrop allocations rather than using it organically. LayerZero Labs stated they prefer to distribute their tokens to genuine platform users since airdrops aim to reward early adopters and build a community committed to decentralized governance. Sybil farmers typically sell their tokens immediately to gain quick rewards.

The strategy involves allowing sybil farmers to self-report and receive 15% of their potential allocation. This reporting period lasts for two weeks, and those who do not self-report but are flagged by LayerZero Labs' internal system will receive nothing.

By May 14, over 100,000 addresses had self-reported, aiding in identifying non-reported sybils. By the end of the reporting period, LayerZero, Chaos Labs, and Nansen identified over 803,000 addresses through self-reports and separate analyses.

After clearing out "industrial clusters" of sybil farmers, the "bounty-hunter" phase began. This phase allowed individuals to report other addresses as sybil farmers and claim part of their airdrop allocation as a reward. However, this program was paused a day after launch due to 3,000 reports and 30,000 appeals. The pause is expected to be temporary while the team enhances the system, possibly introducing a small bond to submit a report.

This experiment has significantly impacted LayerZero’s activity. The number of messages sent dropped from 348,000 on April 30, right before the snapshot, to 70,000 by May 5, and has fallen below 40,000 recently, reaching levels not seen since March 2023, before the platform's activity surged.

Given this substantial decline, it appears many sybil farmers are being identified. It will be interesting to see how many addresses ultimately receive their full claim and how many get nothing.