The problem of Bots and Whales: how can we solve?

The problem:

  • let’s say there is an allocation of 2m tokens from the latest new protocol made available for the Pylon Community to buy
  • ideally we want all core $mine / $luna community members to be able to participate in this allocation with a fair design via Pylon
  • using $mine staking as a basis of fair access is a terrific concept, but even if we implement a cap for each wallet, it is easy for Bots or Whales to do Sybil attacks and go undetected simply by creating dozens or hundreds of wallets
  • with Swap, recently Bots have been eating up a disproportionate amount of allocations (e.g. the entire Valkyrie sale was sold out in less then 15 seconds)
  • with the proposed Scout design, it is possible for one whale to enter and gobble up 30-90% of the allocation
  • this shortchanges everyone in the $mine community, who might now receive only, say, 1/2 or 1/3 of a token allocation, with Bots and Whales gobble up the lion’s share of it :confused:

A simple solution (but with a flaw):

  • introduce KYC plus a cap on how how much each wallet can buy (the cap could be tied to a tiered pool weight calculated based on ‘amount staked’ or based on ‘amount staked x duration’)
  • once we have KYC then Bots & Whales can no longer use Sybil attacks to get around the cap; and access to the allocation can be directly and fairly tied to the pool weight - problem solved, right?

The flaw:

  • KYC is something a lot of people in DeFi would prefer not to see

The really hard problem?

  • Is there some path — other then KYC — to prevent or severely limit the portion of an allocation gobbled up by Bots & Whales?? Which is to say, is there a way to ensure that 100% of allocations go to humans (no Bots) who have no more than one wallet (Sybil proof)?

If we cannot solve this problem, Pylon can never serve its purpose as a core community institution, and it will always be gamed, imho.

Hence my earlier post suggesting that, out of all of the “tradeoffs”, accepting the need for KYC might be a good community choice.

Of course, if there was a real solution to this problem (and I doubt any wants to choose World Coin eye-ball scanning), that would obviously be better then KYC.

Any ideas? :bulb:

7 Likes

These guys are organized, they also have dozens of KYC. You can buy these for quite cheap I think.
It’s still an idea that I would support, but know that it’s not the perfect solution.
For U.S people & other restricted countries, well… like I said there are workarounds, just look for them.

It occurs to me the bot problem could be tackled in a less intrusive way by not asking who you are (KYC) but instead evaluating the wallet. Thinking of the recent flipsidecryoto wallet analysis LUNAtics could it be possible to score wallets according to how “natural” the transaction history appears to be? This would immediately cut out new wallets and wallets that have obvious bot activity (if that’s a thing). Wallets connected by transactions to highly suspicious wallets could be scored lower for being guilty by association.

I guess what it boils down to is trusting the wallet, not identifying the owner. I have no idea how possible this is, how easily gamed it might be or how computationally expensive doing this on thousands of wallets would be, but I thought it was worth throwing out there for consideration.

Edit. Furthermore the wallet score could be used as the basis for token allocation. The higher the score the bigger the allocation, up to a cap, thereby rewarding long term ecosystem supporters.

6 Likes

Sounds like a good idea too. I know some protocols use this kind of scoring.
DAOmaker did it at some point (I don’t know if they still do), Thorswap/chads do it (example below), some airdrops do it too (staker+voter+LP+recent transactions, etc.)

3 Likes

Cool. So it’s certainly not impossible but would it solve or alleviate the bot problem I guess is the question. I think some kind of wallet scoring would reward long term ecosystem participants whether or not it made a noticeable difference against bots. I would assume bot owners wouldn’t normally stake LUNA with multiple validators across multiple wallets for say, 30+ days? It would just be a case of creating a fair and informed scoring system. Even if public knowledge, which it probably should be, it should still be uneconomical or impractical to game without low-scoring too many real wallets. It’ll be a fine line but I think something like this, if feasible, would be more palatable than KYC for many.

I agree with the proposer KYC might be the best option in hand…
Or
option of having tiers along with the some kind of whitelisting process might work well to avoid KYC…
This will avoid automatic swap entry just by staking Mine…
the whitelisting process is key to avoid bots and whales using multiple wallets…

One potential solution I can think of is using an self-sovereign identity protocol. Unfortunately, it still would require KYC but can be done in a manner that might be better accepted by the crypto community. That mixed with a level of MINE governance involvement (not just amount staked) might help.

two projects come to my mind in that regard:
ferrum network and evolution.finance. i have taken part in some IDO where they used their antibot measures and it was mind blowing! not only they prevented a large amount of bot to execute transactions but the one that did pass through got stuck with worthless tokens in their hands, yes this is not a typo :slight_smile:

maybe this is a path worth exploring, peace.

Could you please link details as to the anti-bot measures they used?