Largest Sybil Attack In Crypto History? Here’s What Went On With The $MYX Airdrop

Bubblemaps is warning of a $170M Sybil attack on MYX’s airdrop, and is raising fresh worries about manipulation and trust in defi.

Blockchain analytics firm Bubblemaps has raised alarms over what it calls the “largest Sybil attack” in crypto history. 

The firm traced around 100 newly created wallets that claimed 9.8 million MYX tokens, worth about $170 million, during a recent airdrop.

The wallets were funded from crypto exchange OKX almost simultaneously, and each received similar amounts of BNB. Just weeks later, they became eligible for MYX and claimed tokens at nearly the same time, which is a very big coincidence. 

How the MYX Airdrop Played Out

According to Bubblemaps, the wallets showed no activity before the airdrop. On May 7, at around 5:30 a.m., they all moved to claim tokens, which indicated that they were coordinated and not controlled by individuals.

At the height of MYX’s price surge, the value of these claims was more than $200 million. The allocation represented roughly 1% of the token’s supply.

MYX Finance defended its process, on these allegations.

The decentralized exchange said that token rewards were tied to real trading and liquidity contributions. The team also pointed out anti-Sybil protections used in its “Cambrian” campaign, which is aimed at blocking wash trading bots.

It is worth mentioning that MYX admitted that some high-volume users requested address changes before launch. The platform said it allowed these requests in order to encourage participation.

“We acknowledge participation even if a single entity is highly active,” MYX stated. 

The team promised stronger Sybil prevention in future campaigns, while keeping trading and liquidity incentives open.

MYX Token Trading Remains Strong

Despite the controversy, MYX continues to trade actively. According to CoinMarketCap, the token was priced at $15.33 at the time of writing, which is up 6.47% over the past day and more than 1000% over the last week. 

That figure is still down 12% from its $18.52 all-time high.

The token also launched with strong demand. Its Initial DEX Offering (IDO) on Binance Wallet, in collaboration with PancakeSwap, was oversubscribed by over 30,000%. 

It quickly secured listings on Binance Alpha Zone, Bitget and PancakeSwap. By May 7, the token had reached $51 million in daily trading volume, which made it one of the most active assets on BNB Chain.

Worries Over Market Manipulation

The MYX case shows a much larger issue in defi. Chainalysis reported that wash trades involving ERC20 and BEP20 tokens reached up to $2.57 billion last year alone.

A small number of addresses dominate this activity. 

Chainalysis shows that there has been a rise in estimated wash trading volumes | source: Chainalysis

One address executed more than 54,000 repetitive trades, while another was tied to nearly 17% of all identified wash trades. These patterns tend to fuel pump-and-dump schemes. 

This is because the artificial activity attracts investors, and then orchestrators sell off tokens for profit.

The scale of manipulation has also been on the rise. Chainalysis found that pump-and-dump activity rose from 3.59% of market activity in 2023 to 4.52% last year. 

Lower fees on newer blockchains and Layer 2 networks have made such tactics easier to execute, and the crypto industry will need to embrace more security-conscious practices going forward.