zkSync is deeply embroiled in the 'rat trading' controversy: only 10% of addresses are eligible for the airdrop, with witch addresses receiving millions of ZK tokens

Author: Nancy, PANews

After much anticipation from the community, zkSync finally announced its token issuance plan on June 11, with a distribution plan for over 3.6 billion ZK tokens, making it the largest L2 airdrop project. However, this long-awaited airdrop feast, which has been waited for 4 years, only belongs to the victory of 10% qualified addresses. zkSync has been accused of betraying the interests of the community. At the same time, zkSync’s airdrop rules have also been embroiled in a “rat trading” controversy due to opacity, concentrated token distribution, a large number of airdrops to witch addresses, and the recovery of the minimum allocation, and the official “not my business” attitude has sparked anger in the community.

Affected by community dissatisfaction, according to Whales Market data, the off-exchange price of zkSync token ZK has dropped by over 59.2% in the past 24 hours. L2BEAT data shows that zkSync’s TVL has dropped to 0.75 billion, with a 13.37% decrease in the past 24 hours.

Airdrop of over 3.6 billion tokens, with interaction, funds, and time as the key criteria for the airdrop

According to the ZK token distribution plan of zkSync, in addition to 49.2% of token supply being allocated through the ecosystem plan, 17.2% will be allocated to investors, and 16.1% will be allocated to the Matter Labs team, 17.5% (i.e., 3.675 billion tokens) of the total supply will be distributed to community users, of which 89% will be allocated to zkSync users who meet certain transaction activity standards, and the remaining 11% will be allocated to ecosystem contributors, including zkSync native projects (5.8%), on-chain communities (2.8%), and developers (2.4%).

In addition, zkSync will allocate 0.4875% of the total supply to a small experimental on-chain community to explore new ways of organizing using tokens and NFTs. These communities include DEGEN and BONSAI airdrop recipients, Crypto the Game players, as well as Pudgy and Milady holders.

For community airdrops, zkSync adopts a point system, and wallets can earn points by performing actions such as interacting with 10 smart contracts on zkSync Era, providing liquidity to DeFi protocols, and trading more than 10 ERC-20 tokens. Certain activities on zkSync Lite also earn points, such as donating to Gitcoin rounds or trading within the first three months of zkSync Era mainnet launch. After the points are allocated, each wallet will receive a distribution based on the assets bridged to zkSync Era. Addresses can earn multipliers based on their activity on zkSync and the Ethereum mainnet. Airdropped tokens have no vesting period or lock-up period.

According to @xiaoyubtc’s interpretation, zkSync places relatively important weight on on-chain interaction, on-chain asset value, and time in setting the airdrop rules. The witch detection method is relatively simple, which is to detect among all addresses that meet the conditions, with only two criteria: exchange deposit address reuse and fund source.

Airdrop rules face multiple doubts, and the official claims that it is decided by the association itself

zkSync is facing multiple doubts from the community regarding the distribution of token airdrops. In a survey conducted by PANews on “Evaluation of zkSync Airdrop”, an unprecedented 63.9% of users chose the option “Unprecedented, chaotic witch rules + rat trading”.

Or anticipating the airdrop controversy, zkSync emphasizes in the airdrop claim interface terms that meeting one or long of the above airdrop criteria does not imply the legal right or requirement to receive the airdrop, and all decisions related to airdrop distribution are determined solely by the ZKSync Association. This statement gives the official the freedom to interpret, while also causing users to question its transparency.

“Unfortunately, address is not eligible for the Airdrop.” For many dedicated users, zkSync’s Airdrop rules undoubtedly poured cold water on their efforts.

According to information released by zkSync, out of over 6 million wallet addresses, only 695,232 are eligible for airdrops, accounting for only 10%. Nine out of ten addresses have been excluded, which is much lower than the estimated 2 million addresses previously projected by Web3 identity and reputation infrastructure Trusta Labs. What’s more, even zkSync’s ecosystem projects have been excluded from the airdrop list. For example, NFT marketplace Element tweeted that as the largest NFT marketplace on ZKsync, they have not received any airdrops and questioned whether this is a joke. zkApes also tweeted that the platform generated $15 million in gas fees but did not receive any airdrops.

And due to the non-adoption of the witch addresses identified by LayerZero previously, and the airdrop rules being relatively vague compared to other projects such as Arbitrum, there are suspicions surrounding zkSync’s airdrop rules, including the inclusion of already confirmed witch addresses in the airdrop list. According to community statistics, over 9200 addresses (1.3% of the airdrop list) can claim over 90,000 ZK, accounting for 23.9% of the total airdrop, meaning a large number of airdrop rewards are concentrated in a few addresses.

Meanwhile, the witch hunter Artemis also found in the zkSync airdrop eligibility list that a witch user who made a profit of $4.2 million in the Arbitrum airdrop still qualifies for the airdrop, obtaining nearly 1 million ZK tokens with over 3000 wallet addresses. Some witch accounts marked on the LayerZero witch list also received over 2 million ZK tokens by depositing the same amount of Ethereum funds on the same day, with an average of 15,000 ZK tokens per wallet. Compared to the high returns of these witch addresses, the average token distribution for all airdrop addresses is around 5286 tokens, a significant difference.

In the midst of community skepticism, Nansen was also implicated and quickly clarified that they only provided specific wallet segment data to Matter Labs, including whale addresses and known scammers, but did not participate in anti-sybil attacks or directly suggest specific airdrop allocations.

In addition, the lack of attention to the interests of individual investors by zkSync is also one of the important factors of community dissatisfaction. According to zkSync’s airdrop rules, the minimum allocation for each wallet is ultimately 917 ZK, and each address can receive a maximum airdrop of 100,000 tokens. Tokens held in addresses with less than 450 ZK or more than 100,000 ZK will be reclaimed. Although this rule prevents large investors from benefiting excessively, the zeroing of the minimum guarantee number is seen as depriving users of the rights they should have enjoyed.

Meanwhile, zkSync also stated that by participating in the airdrop, participants explicitly acknowledge and assume all risks associated with it, including (but not limited to) the following risks: under no circumstances will the zkSync Association or any of its directors, executive employees, representatives, advisors, or agents be responsible for any claims, losses, damages, or other liabilities, whether arising from contract, tort, or any other liability arising from the airdrop or the minting and claiming of any ZK token. At present, zkSync has not yet made the latest response to the community’s dissatisfaction, and the “ultimate interpretation right” seems to have become its talisman.

In short, the airdrop controversy of zkSync has exposed its imbalance in community interest considerations, as well as issues of opacity in rule-making, and also implies that the era of relying on simple interactions to win airdrops is gone forever.