Drift Partners with Allium for Sybil Analysis and Detection

This blog post was originally written by drift. You can find the original post on their blogspot at the following link: https://www.drift.trade/governance/drift-partners-with-allium

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Since its inception, Drift has been dedicated to creating a robust trading platform. Our commitment to fairness and community engagement is reflected in Drift’s launch airdrop, tailored to reward our loyal users and enhance participation within the Drift ecosystem.

The Drift Foundation partnered with Allium, a leading blockchain data platform, to analyze user activity on Drift. This collaboration aimed to identify Sybil clusters and maximize the distribution to genuine users of the protocol.

Goals of the Analysis

There were three goals that the Drift Foundation wanted to achieve from the analysis with Allium:

• Sybil detection
• Identification of OG V2 users
• Creation of a hybrid linear and tiered distribution to improve allocation for individual users

Sybil Detection

It’s challenging to accurately detect Sybils. Disqualifying wallets based on surface-level analysis of their deposit sizes, trading volumes, or transaction patterns often leads to false positives. Traders frequently use multiple wallets for security reasons, and immediately ruling out wallets that have interacted with each other could wrongly disqualify those traders. Additionally, disqualifying wallets with smaller deposit sizes or trading volumes might unjustly exclude genuine users who have smaller portfolios.

To reduce the number of false positives and increase the accuracy of detecting Sybils, the analysis involved three key data points:

• List of wallets flagged for sybiling in other airdrops
• Identification of suspicious clusters of wallets via sources of funding
• Identification of suspicious clusters of wallets that portrayed abnormal behavioral patterns

Wallets flagged for sybiling in other airdrops

The Sybil detection work that Allium has conducted alongside multiple leading protocols on Solana, such as Wormhole, Jito, and Jupiter, has enabled them to curate a list of thousands of addresses that have been identified as part of large Sybil clusters on other protocols. While sybiling other protocols does not immediately prove that these wallets have also sybiled Drift, it does indicate a higher propensity to do so. The activity of these wallets was given an additional level of scrutiny before determining their eligibility for the Drift airdrop.

Source of funding

It’s common for Sybil clusters to have hundreds, if not thousands, of wallets funded from a single source. Some try to mask their activity by having multiple wallets that act as the first funder (the wallet that sends the initial amount of SOL to a fresh wallet) for the cluster. However, by tracing the original source of funds, the team can link such clusters of wallets together.

Behavioral patterns

Some sophisticated actors now fund their wallets directly from centralized exchanges. This makes it harder to identify sybil clusters as CEXs use the same wallets to process withdrawals of multiple users. To combat this, the transaction timing and behavioral patterns of wallets were analyzed to identify clusters that exhibit similar patterns. One example of such activity was a sudden surge in the number of wallets funded from the same CEX address, depositing their first amounts on Drift within a narrow timeframe.

Identification of OG V2 users

Rewarding early users of Drift is important to the Drift Foundation. In addition to setting aside 5.5% of the launch airdrop for users of v1, there is an additional variable bonus for early users of v2 under the OG points allocation. To determine what constitutes an early user, historical data of users' first deposits into Drift was utilized as one of the data points. A clear spike in activity was visible at the end of January 2024, and this was used as a benchmark to identify our early users. With that established, the additional bonus will be awarded to users who deposited funds into Drift v2 before January 22, 2024.

Creation of a fair distribution

The nature of activity on exchanges often leads to strong power law dynamics coming into play, where the top percentile of users accounts for the vast majority of all volume and liquidity. While rewarding these users for their significant contributions is important, it often results in smaller traders receiving extremely small allocations. To improve the distribution, the airdrop allocation to the top 1% of all traders is capped at a certain amount, and a bonus is allocated to smaller accounts.

Conclusion

The foundation will always focus on empowering genuine users while building the best trading experience in crypto. By collaborating with Allium to conduct a thorough and equitable analysis of user activity, the Drift Foundation has been able to more accurately reward genuine users for their contributions. The in-depth on-chain analysis bolsters the integrity of the airdrop process and improves the allocation of the airdrop to genuine users.

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