Ribbon VC Sybil Attack

Ribbon VC Sybil Attack

The controversy sparked when Ribbon Finance backed VCs Sybil attacked to maximise Airdrop with the help of inside information.

Sun 10th Oct 2021

Exclusive interview with Gabbagool

Ribbon Finance is an innovative project which is opening up Financial tools for average users in a decentralised platform. 

Essentially an options contract is an agreement between two parties, not the obligation to buy an option at a preset price called strike price at a preset time. To get that option users pay a premium.

Ribbon Started with USDC, ETH and WBTC products. Opyn was the execution platform for Ribbon users to buy and sell those products. Like most of the typical DeFi platforms, it didn't have a Token when the protocol was released. It was an interesting and exciting project as it was quite a new flavour in DeFi from the plethora of Dexes and Yield farming projects.

Ribbon announced a retroactive airdrop on May 17th for users who had more than 100$ in the protocol. Some of the early investors from Divergence Ventures ( which consists of 3 people in the team ) had basically sybil-farmed ( creating as many wallets to claim airdrop) with prior information of the airdrop. Later dumped those airdropped tokens and got caught by the community.

It was brought to light by a community member named Gabagool. What led to the suspicion to certainty was the ENS attached to the wallet that executed Sybil. 

Community manager Julian jumped in on the action to resolve the issue as it was badly affecting the project and social sentiment towards the project.

He clarified what was disclosed to investors and what wasn’t. Things escalated rapidly and Divergence returned around 700 ETH to the DAO wallet. They tweeted an apology and Transaction hash.

The apology wasn’t enough as many community members pointed out the damage done and the gains they made are astronomical.

Simultaneously, Julian stepped up to the leadership handling the tricky situation to manage the enraged community and renegotiating with Divergence VC. Eventually emerging victorious with approximately 1.9 Million $RBN from their seed round currently vesting to be donated to fund organisations that are aimed to make the space better with diversity and good practices.

It didn’t stop there, and people dug up related wallets and found out that they are doing this with other protocols and have a history of such activities. Most of the VCs are definitely a curse to the long term growth of crypto.

Clearly, there was more to come than expected, 1Inch, ribbon Charm, Lido, Lyra Arbitrum, Optimism, and the list goes on. On a side note, underlined protocols are yet to have a token and these folks seem to already know how much ETH or equivalent is required for Airdrop.