Crypto exchange KuCoin reported that its Twitter account was hacked

KuCoin promises to compensate users for losses incurred due to the incident and strengthen security measures

Cryptocurrency exchange KuCoin warned about the hacking of its official Twitter account. The incident occurred on the night of April 23 to 24. The platform reported that a small number of users lost funds due to actions related to fake tweets.

KuCoin is a centralized crypto exchange that ranks 7th in terms of trading volume. In the last 24 hours, according to CoinMarketCap, that figure on the platform was $514 million.

Hackers gained access to the KuCoin account for 45 minutes. After the exchange recovered the account, it identified 22 transactions. And that included Bitcoin and Ethereum transactions that were linked to the incident. The platform estimated the total loss at approximately 22,600 USDT.

“Kucoin will fully reimburse all asset losses caused by the social network hack and fake activity. To prevent more users from being harmed, we are currently checking and blocking suspicious addresses,” the statement reads.

Our experts note that Kucoin claims that users’ assets on their exchange remain safe. An investigation into the incident is underway. In addition, in addition to the existing two-factor authentication. Additionally, the platform intends to introduce additional security measures on its accounts in social networks.

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European Parliament approves MiCA crypto-regulation bill

European Parliament members voted in favor of new rules for the digital asset industry in the European Union

European Parliament members in favor of the Markets in Crypto-Assets (MiCA) bill to regulate cryptocurrencies. The EU became one of the first jurisdictions in the world to introduce comprehensive rules for cryptoassets. As well as consumer protection, financial stability and innovation, the European Commission said in a statement.

The MiCA project, the main provisions of which were agreed upon last year. It will allow cryptocurrency exchanges and cryptocurrency storage companies to offer their products legally in the EU. The document also establishes rules for stablecoins issuers.

Once the law enters into force, cryptocurrency companies will have to obtain registration in one of the EU member states. This will allow them to work in the entire European Union.

The law will come into force in July after being formally approved by the 27 member states of the bloc, expects European Commissioner Mairid McGuinness. In this case, some provisions of the act will come into force gradually. For example, the rules governing stablecoins will apply from July 2024.

European Banking Authority (EBA) and European Securities and Markets Authority (ESMA). They will ensure that crypto platforms comply with the rules. And use the necessary risk management processes.

Our experts note that European Parliament members voted in favor of a law to regulate transactions. This document requires operators of cryptocurrency platforms to identify their clients in order to prevent money laundering.

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The collapse of FTX was the catalyst for a new bullish cycle of cryptocurrencies

The collapse of a major crypto exchange FTX cleared the market of “toxic leverage” and showed investors the importance of self-storage of digital assets

Analysts at investment firm Bernstein believe that the collapse of FTX was the catalyst for a new bullish cycle in cryptocurrency markets, CoinDesk reported, citing a report from their company. The collapse of a major crypto exchange cleared the market of “toxic leverage.” And showed crypto investors the importance of decentralization and self-storage of digital assets.

Macroeconomic factors are supporting Bitcoin. Such as the weakness of regional U.S. banks and the continued outflow of deposits to money market funds. And the “big four” U.S. banks (Bank of America, Citigroup, Wells Fargo and JPMorgan Chase) reflect investor concerns about the “centralization of money,” according to Bernstein.

“Any potential shocks, in the credit sector or from the government <…> make Bitcoin an ideal safe haven asset alongside gold,” the analysts wrote.

Since the beginning of the year Bitcoin’s rate grew more than 80% – from $16.5 thousand to $29.8 thousand only in March on the background of bankruptcies of American banks (Silvergate Bank, Silicon Valley Bank (SVB) and Signature Bank) price of the first cryptocurrency grew from $23 thousand to $28 thousand.

Bernstein’s experts also pointed out that fees on the Ethereum network tripled after the FTX collapse. Which reflects the growth of user activity and interest in the asset itself. Ethereum has risen 75% since the beginning of the year, from $1,200 to $2,100.

Our experts note that at the end of March, analysts Bernstein noted that now there are “ideal conditions” for the growth of the crypto market. Problems in the U.S. banking sector could lead to a decentralized financial system as an alternative to traditional banks.

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Altseason when it starts

Our experts told us why it is too early to talk about the start of general growth of altcoins (Altseason) other than Bitcoin and Ethereum. And what market conditions are needed for this.

The former head of BitMEX crypto exchange Arthur Hayes, known for his analytical forecasts on the cryptocurrency markets, announced the onset of the next Altseason. At the same time, he pointed to the sharp growth of Ethereum as the basis of his assumption.

Altcoin season (Altseason)  is a slang term for cryptocurrency traders that refers to a period of active one-time growth of alternative cryptocurrencies. Altcoin season is thought to take place in four phases: the rise of Bitcoin, the rise of Ethereum, the rise of large-capitalized cryptocurrencies, and the massive growth of the rest of the crypto market. This includes low-liquid assets with no fundamental value. Which is accompanied by a massive rush by retail traders.

Our experts told us why it’s too early to talk about an altcoin season and what market conditions are needed for it to start.

Altseason hasn’t started yet

Despite numerous claims that an “Altseason” has started in the digital asset market, our experts cannot agree.

Since the start of this year, Bitcoin’s (BTC) dominance has seriously increased. And at the moment, it shows no signs of decreasing. In general, Bitcoin has shown one of the most consistent dynamics in the cryptocurrency market since January. While the standard model of market behavior in the period of altcoin growth is the presence of BTC rate in a medium-term “sideways”. And without a strong rise or fall, and currently the medium-term uptrend on BTC is too confident for “Altseason”.

As for altcoins themselves, we can notice that there is no active capitalization growth there. Individual low-capitalized assets are “growing.” But this is not an indicator of the altcoin season, it only speaks to the local interest of participants in these assets.

The TOTAL2 index, which measures the growth of the total market capitalization of all altcoins (not including Bitcoin), is very slightly ahead of the total market capitalization index (TOTAL). This indicator shows that there is no multiple growth in demand for altcoins.

An important factor of Altseason is also the growth of the volume and number of transactions in the networks. As well as the growth of developer activity and audience activity. Again, we see growth of these indicators in individual assets. For example, in Ethereum, which had a successful fork allowing to take tokens from stacking. But overall, we are not seeing multiples of growth in investor and developer activity right now. After strong growth in January and February, the market is now looking for some balance. Which again does not signal that we have started an altcoin season.

When to expect growth

Our experts think that such a season is quite possible this year. But not before the second half of the year. The cryptocurrency market is still gathering energy for growth. And although we passed the bottom at the end of last year, the market has not yet reversed upwards: it takes time.

The growth season for cryptocurrencies, including altcoins, will start with the stabilization of stock markets. For that, there needs to be no geopolitical shocks. And also there were no problems such as still ongoing problems with banks in the U.S. and Europe. And also there were no predictions of an imminent global recession, and there are more and more of them.

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South Korea seized assets of ex-employees of Terraform for $150 million

The authorities claim that the damage from the illegal activities of ex-managers of Terraform is not less than this amount. That is why the suspects’ property was seized during the investigation. Crypto Upvotes expert review

The Financial Crimes Investigation Unit of the Seoul South District Prosecutor’s Office seized property of former Terraform Labs employees worth 200 billion KRW ($153.6 million), local newspaper KBS News reported.

According to the South Korean law enforcers, the total damage from financial crimes. Terraform Labs creators are suspected of at least 200 million KRW, according to the report. Authorities have seized the property of eight former Terraform employees for that amount, including real estate. This will prevent the suspects from disposing of the property while they are under investigation.

Among those whose assets were seized is the company’s co-founder, Daniel Shin. The South Korean prosecutor’s office suspects him of making about $105 million in illegal profits from the sale of LUNA tokens. And it has already twice asked the court for a warrant for his arrest. Both times, the court refused, citing the vagueness of the charges and the fact that Shin is unlikely to destroy any evidence or flee.

Sheen faces charges of scam, breach of duty and capital markets laws. He denies all of the charges and claims that when he left Terraform Labs in 2020, he was no longer involved in its operations.

Do Kwon, the former head of Terraform Labs, was arrested in late March. This happened in Montenegro while trying to fly to Dubai with false documents. He is now in a local prison awaiting trial on a document forgery case. South Korean authorities have already requested his extradition. However, he will first have to serve his sentence in Montenegro if the local court finds him guilty.


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Hackers stole $211 million worth of cryptocurrency in March

Hackers have stolen a total of $255.8 million in cryptocurrencies and another $31.5 million in NFTs since the beginning of this year

Hackers made 26 hacks of crypto projects in March. In doing so, they stole $211.5 million in cryptocurrencies, according to PeckShield. In addition, attackers stole $10.9 million worth of NFT.

The largest amount in cryptocurrency was stolen in the attack on DeFi-platform Euler Finance. About $197 million was stolen here, but the hacker later apologized and returned $182.7 million to the project.

The second largest loss was the SafeMoon ecosystem hack. Hackers there withdrew about $9 million worth of assets, followed by the ParaSpace protocol attack with $5.2 million in losses and the hack of the General Bytes ATM network, which claimed $1.7 million.

A total of $255.8 million worth of cryptocurrencies were stolen in the first three months of this year. $8.8 million was stolen in January and $35.5 million in February.

In addition to cryptocurrencies, $10.9 million worth of NFTs were stolen in March. Half of the stolen tokens were sold on trading floors within the first two hours of the theft. About 74.9% of the NFTs were sold on the Blur Marketplace, while 19.5% were sold on OpenSea.

Since the beginning of the year, a total of $31.5 million worth of NFTs were stolen. In January they stole $4.4 million worth of tokens, in February – $16.2 million. Our experts recommend everyone to be careful and closely study the site before you connect your wallet.

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What are Arbitrum project prospects and what will happen to its price

Crypto Upvotes experts evaluated the effectiveness of airdrop Arbitrum and told how ARB token exchange price may develop in future

After the sensational airdrop project Arbitrum (March 23), 1 billion ARB tokens were released to market. Which were distributed among 625 thousand addresses. The total market capitalization of token stabilized at $1.63 billion.

At the time of publication, the price of ARB is at $1.28. Having analyzed the experience of projects such as Optimism, Aptos and Blur, whose tokens have also entered the market as part of large-scale airdrops. Our experts told us how the rate of ARB token may behave in the future.

The general bullish trend continues

After listing on exchanges, tokens of projects with airdrops tend to exhibit high volatility. Therefore, there can be both sharp price jumps and drawdowns of tens of percent all at once. Overall, ARB is in line with the “most positive trend.” That’s because the token price didn’t collapse after the start of trading on Bybit, Kucoin, MXC, Huobi, Okex. And then on Binance, although it experienced serious fluctuations. On Huobi, the exchange rate was as high as $11 per token on listing day, though the price went down almost immediately.

First of all, such volatility is due to the fact that those who received ARB tokens during the Airdrop. And then decided to lock in profits immediately after listing, which put pressure on exchange rates. On another note, our Crypto Upvotes experts observed that a significant number of sell orders were placed well in excess of the market price, pushing the rate higher.

If you compare listing of ARB on exchanges with other large tokens with airdrop. The similarity can be seen in the high volatility at the start of trading. The major difference is the “general bullish sentiment” of investors regarding ARB. And this is favored by such data as the growth of total blocked value (TVL) of Arbitrum network by a quarter during the last week. According to DefiLlama, Arbitrum’s TVL stands at $2.18 billion, while its closest competitor, Optimism, has $907 million of locked-in capital in its ecosystem.

Predicting the price of Arbitrum after trading starts is difficult

Starting ARB trading was marked by the fact that on some exchanges trading started a little later than announced. And also the fact that the influx of users led to disruptions in the resources for receiving tokens and on exchanges. Listing of Arbitrum on exchanges was immediately accompanied by high trading volumes, which further attracted crypto-traders. This gives big players an opportunity to form positions without much damage to the average purchase price.

Our experts note that it is difficult to predict the further development of ARB price. Because the price levels have not been fully formed yet. In the short term it is necessary to focus on the level of $1, as it will be a psychological support. In case of a positive scenario, we should be attentive at the price level of $1.5. If this level of resistance is exceeded, the price is likely to quickly approach $2.

Why airdrop Arbitrum became successful

The effectiveness of an Airdrop depends directly on marketing work that the project has done before distributing these tokens. First, the project needs to develop their community, to attract new capital. And constantly pointing to the possibility of a profitable airdrop for active participants. Under such conditions, you can talk about success – even if some of the users in the community decide to sell ARB tokens.

The effectiveness of such a model is good for the popularity a project – it’s an excellent marketing move, our experts say. In the case of Arbitrum, the popular topic media “literally bursting with news”. Because people like to get something for free, especially if it will bring good profits in the future.

However, most traders will fix some part of the received tokens, e.g. 20-30%. The rest will go into stacking or long-term storage waiting for price growth if the project really deserves it. According to experience of our experts, even now we can see that large participants of crypto market actively accumulate ARB in their wallets.

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U.S. vs Binance. Who will benefit from problems of the largest cryptocurrency exchange

U.S. exchange regulators are pressing charges against Binance and trying to disconnect it from the U.S. market. Our experts tell us who can take advantage of this situation and what the risks are for Binance and its users

The U.S. Commodity Futures Trading Commission (CFTC) has filed a lawsuit against Binance and its executives. The regulator intends to completely deprive Binance, the largest cryptocurrency exchange of the U.S. market. It also accuses it of facilitating illegal activities and trade manipulation.

The text of the indictment took 74 pages. Citing quotes from internal chats, to which the agency managed to gain access, the service representatives accuse the exchange, its head Changpeng Zhao and former director of compliance Samuel Lim. That they knowingly allowed Americans to trade cryptocurrency derivatives without a license, in flagrant violation of U.S. law. The CFTC also alleges that Binance circumvented money laundering laws (AMLs). And “know your customer” (KYC) rules deliberately helped large U.S. clients circumvent their own compliance procedures.

What are the goals of U.S. regulators ?

The CFTC seeks a complete ban on Binance in the U.S. and return all trading revenues and commissions received from transactions of users from the U.S. Because, in their opinion, they were obtained illegally. The CFTC estimates that in 2019 and 2020, 18 to 20% of Binance’s revenues were generated by “illegal” transactions of U.S. citizens, although no data for later periods are provided. The exchange’s management supposedly turned a blind eye to the violations to maintain its market share in a key jurisdiction.

The document alleges that the exchange offered U.S. residents to trade leveraged futures and options contracts on Bitcoin, Ethereum and Litecoin without registering with the CFTC as a futures commodities trader (FCM). The agency considers these assets to be commodities, which is at odds with the Securities and Exchange Commission (SEC), which considers most crypto assets to be securities.

Our experts point out that different agencies in the U.S. have different views on what is going on. This inconsistency in itself can create more doubts. But lawyers can also use some language against others in their defense strategies. Even if a serious trial were to begin on any of the named charges. Then the investigation itself will require many months of work by lawyers on both sides of the conflict, our Crypto-Upvotes experts say.

Charges are directed at Binance, not a separate division of Binance.US

Binance.US is a separate division of Binance for the U.S. market. This division does not offer derivatives trading and is not mentioned in the complaint. There is a separate legal entity behind the platform, while Binance itself has no registration in the United States. And access to the exchange for American citizens is prohibited. In this case, the representatives of the CFTC precisely put forward charges against “global” Binance. They argument that the exchange falls under the U.S. law, working with local customers.

The CFTC complaint says that Binance not only serviced American users. But also deliberately didn’t take measures to block their accounts. Exchange executives also allegedly advised large institutional customers to move trading accounts to jurisdictions inaccessible to U.S. regulators. And they didn’t officially encourage the use of VPNs to bypass blockades. A spokesman for Radix Trading of Chicago confirmed to The Wall Street Journal that they had been trading on Binance for several years through offshore affiliates and a separate broker. While having legal backing for any cryptocurrency transactions.

The regulator also uncovered several other likely violations based on conversations from internal correspondence in work chats. In addition, the CFTC accused Binance of having about 300 internal trading accounts under its management. Which “directly or indirectly belonged to the head of Binance,” and the exchange failed to disclose their existence amid an anti-insider trading policy. Zhao responded in a statement, calling the allegations “an incomplete statement of facts.” And claims that Binance “under no circumstances” manipulates the market ! And “affiliates’ liquidity work” is under special control.

Who benefits from this?

The lawsuit against Binance is not the first precedent for a confrontation between the CFTC and the crypto business. In October 2020, the agency brought charges against BitMEX and its three founders, Arthur Hayes, Benjamin Delo and Samuel Reed. The exchange actually invented a new format for cryptocurrency derivatives – perpetual futures contracts. And it created an entire market around the instrument, whose popularity quickly led to its appearance on other trading platforms as well. The Commission also accused BitMEX of operating in the U.S. futures market without proper authorization and FCM status.

The case was closed when BitMEX agreed to pay a record $100 million fine for the crypto industry, as well as to forcibly close the accounts of all U.S. customers and implement proper anti-money laundering measures. Hayes and Delo resigned from the company and pleaded guilty. They each paid an additional $10 million fine and were sentenced to two years’ probation.

This ended BitMEX’s influence in the cryptocurrency derivatives market. Which, until August 2019, it controlled nearly 100 percent of. However, her absence led to the rise of other platforms that now dominate this niche. These include Deribit, ByBit, and Binance, which regularly lists perpetual futures on most liquid crypto assets in demand.

Our Crypto Upvotes experts believe that if Binance is forced to reduce its share of this market. ByBit, as the next largest exchange in terms of trading volumes on the futures market, will benefit the most from this. Kraken and Coinbase will be able to pick up the remaining volumes, given that both have the necessary statuses and licenses to operate in the US.

When it comes to the global crypto market, Binance’s role as a player in the U.S. is not as significant compared to other states. Binance.US has tried to increase its share and its weight by buying distressed companies’ assets. Which left the market in 2022, but U.S. authorities prevented Binance from doing so.

What are the risks for exchange users?

Coinbase, Gemini, eToro, Kraken and some other platforms are much more present in the U.S. market than Binance. And also the volume of trades is ahead of its U.S. division. In this regard, leaving Binance from the North American market will not create difficulties for U.S. investors. Which have alternative exchanges, causing less questions from regulators.

For quite a long time Binance has been under the scrutiny of U.S. regulators. Major business media outlets have released several investigations about the internal structure of the exchange’s business. At the same time accusing it of various manipulations or non-transparent practices. The day after the CFTC lawsuit, the British Financial Times spoke about Binance’s longstanding ongoing relationship with China. And at the same time referring to internal documents, which came to the journalists of this edition. A few days before that, the exchange experienced a technical failure due to which it stopped trading for four hours. The cumulative negative events inevitably affected traders’ actions – in less than a week $2.2 billion worth of assets were withdrawn from this exchange.

In the context of the CFTC’s lawsuit, the fact that there is access to the correspondence of Binance employees is alarming. Our experts think that it might be an indirect evidence of an authorized “high-level” surveillance. Which could be due to investigations into very serious allegations. But thanks to the fairly distributed structure of Binance, we do not see any real risks of a complete trading stop or paralyzing difficulties.

The decision to withdraw assets from centralized exchanges depends on each investor’s individual needs and strategy! All investors need to keep in mind that withdrawing tokens to non-custodial wallets in and of themselves can seriously reduce risks of holding cryptocurrencies.

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Chinese banks started offering services to cryptocurrency firms in Hong Kong

Chinese banks offices in Hong Kong are trying to take advantage of the situation with the closure of cryptocurrency banks in the U.S. and take their place in an industry of digital assets in this region

Major Chinese banks have started offering banking services to cryptocurrency companies in Hong Kong. After cryptocurrency-friendly banks from the U.S. faced difficulties. Support for the industry from Chinese banks could fill the void and give a new boost to the industry in the region.

Over the past few months, Hong Kong branches of banks such as Bank of Communications, Bank of China and Shanghai Pudong Development Bank have reached out to local cryptocurrency firms to offer their services. And in one case, representatives from a Chinese bank even visited a cryptocurrency company’s office.

Due to regulatory uncertainties and the riskiness of digital assets, traditional financial institutions have usually avoided working with cryptocurrencies. But the latter need banking services to hold fiat money, pay staff and pay suppliers. According to Hong Kong cryptocurrencies, digital asset firms have been forced to find various workarounds to meet such operational banking needs.

At the same time, banks in Hong Kong did not routinely offer digital asset exchange services for fiat currencies. Therefore, many crypto firms turned to overseas banks such as Silvergate and Signature. Since the closure of these banks, crypto firms have had to look to them for a replacement. And industry representatives note that the “green light” from Beijing is opening up new opportunities for the market.

Hong Kong regulators to hold meeting between crypto companies and banks

Hong Kong authorities have scheduled a meeting of representatives of cryptocurrency companies and banks, according to Bloomberg. It will discuss the provision of banking services to firms working with digital assets.

The meeting will be held on April 28 at the Hong Kong Monetary Authority (HKMA) and will be held jointly with the Hong Kong Securities and Futures Commission (SFC) Both regulators oversee cryptocurrency activities. According to the announcement, the purpose of the discussion will be to “facilitate direct dialogue” between banks and cryptocurrencies and “share practical experiences and perspectives in opening and maintaining bank accounts.”

HKMA and SFC representatives told the publication that they would not comment on any details of the meeting. But they clarified that they are in dialogue with interested parties.

Huge benefit for Hong Kong

This year, Chinese government officials in Hong Kong started to frequently attend cryptocurrency events in Hong Kong. Industry participants see this as a positive attitude from Beijing toward Hong Kong’s intentions to become a cryptohub. Companies previously operating in mainland China (does not include Hong Kong and Macau), as well as foreign firms have begun to register their business in Hong Kong and plan to move to Chinese territory.

At the same time, the ability to open bank accounts and access banking services are among the priorities for companies from the crypto industry. Who intend to develop in this region. Banks in Hong Kong are well positioned to take advantage of the situation after the banking crashes in the U.S. While many Asian companies have partnered with friendly U.S. banks in the past, this is unlikely to happen again in the future due to regulatory issues.

Our experts note that Hong Kong would greatly benefit from such actions. However, the question remains whether the geopolitical climate will deter non-Asian crypto projects from cooperating with Chinese banks.

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How to choose promising Airdrop that are similar in success to Arbitrum

Participants of the Arbitrum airdrop project received thousands of dollars in rewards. Review by Crypto Upvotes experts on how the sphere of earning tokens for activity in blockchain services is organized and what other projects can make an airdrop.

Offchain Labs, the company behind Arbitrum, organized an airdrop of tokens to encourage active users of this ecosystem. On March 23, token trading under the ticker ARB started on major cryptocurrency exchanges, and after a period of strong volatility at the time of listing, its price on trading floors stabilized at $1.2. Tens of thousands of addresses received between 3,000 and 10,000 tokens during this distribution. Thus, participants received significant amounts of incentives in dollar terms and caused a stir around other projects. Which in the future may make their own airdrops.

Airdrop is a new form of successful project launch ?

The idea of free distribution of coins to users is not new. The first airdrop, after which the term became popular, was invented by the developers of cryptocurrency Auroracoin back in 2014 at the stage of mass cryptocurrency market birth. According to their idea, every resident of Iceland was supposed to get coins. That project was quickly forgotten, but the concept itself became popular in the crypto industry and continued to evolve.

Now, airdrops serve as an effective method for blockchain services to attract an audience. It is also likely to increase the loyalty of users who receive rewards in the form of project tokens. Some ecosystem decentralized projects, in which investors see potential, conduct multimillion rounds of funding with the participation of famous funds like Sequoia or Andreessen Horowitz.

What is Project Arbitrum. And why it’s the most expected airdrops of this year

A few years ago, crypto companies chose different forms of ICO (initial coin offering) to raise capital and liquidity. Now there is a risk that tokens will be classified as unregistered securities in the U.S. or Europe when raising funds this way. The free distribution of tokens helps create a market for crypto projects. At the same time, most of their supply stays with developers and investors. At the same time, it creates a financial base for the former and a source of profit for the latter.

Developers of blockchain services often do not announce a token when launching their project. But the experience of their competitors helps community members determine which projects will sooner or later decide to release their own crypto-asset. And which types of activities will be eligible for rewards.

This was the case with Offchain Labs: an infrastructure has already been built around Arbitrum – decentralized exchanges, NFT marketplaces, games, wallets, social networks and other services. All of them are at an early stage of development and need active users and testing. It is for activity in such projects that tokens are eventually distributed.

The company remained silent about its airdrop until recently. But the successful experience of large projects such as Aptos, Blur or Optimism ( the main competitor of Arbitrum) made it clear that participation in projects on the Arbitrum blockchain. Most likely, in the end, will not remain without encouragement from developers.

From which projects to expect launch of new Airdrops

The first obvious candidate is zkSync, an Ethereum scaling solution with a different technical approach than what Arbitrum or Optimism offer. In November 2022, zkSync developer (Matter Labs) led several investment rounds totaling $258 million. And LightSpeed, Andreessen Horowitz as well as major venture capital crypto funds – Blockchain Capital and Dragonfly took part in them.

The zkSync development team includes Anthony Rose, who led engineering teams at SpaceX, creating software for Falcon, Dragon, and Starlink. And Steve Newcomb, who founded Powerset, which was acquired by Microsoft and later became part of the search engine Bing.

In one week before the launch of token from Arbitrum, users transferred $8 million in assets to projects in the zkSync ecosystem. According to DefiLlama, the amount of funds (total value locked) locked in the pool of the decentralized exchange ZigZag. Which runs on the zkSync platform, rose from $1.5 million to more than $13 million in just one day. In a comment for Coindesk, Martin Lee, head of analytics platform Nansen, says that it was the distribution of Arbitrum tokens that triggered the increased activity of “airdrop hunters.” They have attracted both new entrants and those who have participated in airdrops from other projects.

Other potential candidates for future airdrops include several other projects:

StarkWare – Ethereum scaling solution, similar to zkSync. The developer is the Israeli company StarkWare Industries, with an investment of over $150 million and an estimate of $8 billion.

Scroll – a similar Ethereum scaling solution. The project has attracted funding of $80 million with an estimate of $1.8 billion.

Fuel Network – an Ethereum scaling solution similar to Optimism or Arbitrum. The project’s developer, Fuel Labs, raised $80 million in funding in September 2022.

Aleo – DeFi-protocol with a focus on privacy. The developers of Aleo Systems raised $200 million from SoftBank, Andreessen Horowitz, Samsung Ventures and other funds.

LayerZero – a protocol for exchanging data between blockchains from different ecosystems. The company behind the development, LayerZero Labs, has raised more than $173 million, with investors including PayPal Ventures and Andreessen Horowitz.

Other major projects without their own token include Sui, Celestia, Sei, Linera and others.

Terms of participation in airdrop from similar projects

As a rule, the developers of such projects do not name any criteria or conditions, fulfilling which it will be possible to get tokens in the future. Moreover, none of them guarantee the availability of airdrop for early users or the launch of a token. Activity sets are formed in the community based on the experience of predecessor projects. And when an airdrop is announced, the project team decides for itself each time who can claim their tokens and for what.

Some projects have even given away tokens for a single interaction with the ecosystem. And in the case of the Blur Marketplace, for example, a full-fledged multilevel airdrop strategy with a gamified approach was developed.

Risks from participation and scammers

Anonymity when using cryptoservices opens the door to manipulation. According to a joint study by journalist Colin Wu and the blog x-explore, about 150,000 addresses and at least 4,000 groups were identified in the Arbitrum airdrop.
Which are engaged in activity generation, which accounted for more than 253 million ARB tokens. And that’s about 22% of the entire airdrop.

There is growing evidence on the web that organized groups typically in countries such as Vietnam or Bangladesh – are scamming activity in blockchain projects. They use multiple accounts and wallets, working in offices on a schedule and getting paid. Our Crypto Upvotes experts managed to find several international groups in Telegram and Discord messengers. In these groups administrators offer services of “outsourcing” activity. Prices for the services range from $10 to $200 per account, depending on the project and activity set.

The growing popularity of cryptocurrency airdrop is being actively exploited by scammers. Interacting with blockchain projects implies a certain level of technical expertise. Therefore, inexperienced users often become victims of scammers. Tens of thousands of phishing pages appear on web that imitate sites of famous projects.

Sometimes these sites are designed with attention to detail and have high-quality design and convincing scenarios of interaction with the victim. It helps to avoid risks by interacting only with the official resources of the services. Where they also post links to ecosystem projects in which it is possible to participate, claiming a future airdrop.

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