Following Mystika Network’s second airdrop, the community claims that two wallets that received significant amounts of tokens were controlled by insiders. These allegations raised serious questions about the reliability of Mystiko Network and damaged confidence in the project.

During the second Mystiko Network (XZK) token airdrop, the community noticed that two addresses received significantly more tokens than other participants.

According to blockchain data, wallet “0xBca” received 59,570 XZK ($1,787), while wallet “oxda8” received 60,325 XZK ($2,170).

This created the perception of an unfair distribution, considering that the majority of other participants received between 400 and 5,740 XZK tokens, which were worth $172.

Following this airdrop incident, widespread outrage broke out within the cryptocurrency community.

Cryptocurrency airdrops are often targeted by airdrop hunters (or invaders); These people collect the same airdrop with multiple crypto wallets and sell the rewards on the market, without the intention of long-term use. Such behavior distorts the protocol’s influence on the market and calls into question the effectiveness of airdrops.

In response to these accusations, Mystiko claimed that the two wallets belonged to early protocol contributors. Mystiko Discord moderator Ellie stated that the accusations were “baseless” and refused to comment further.

Mystiko Network stated in a statement on July 25 that the two addresses in question were early contributors to their ecosystem and that these addresses carried out many transactions within the network. According to this statement, the reason the two wallets received the rewards is because they met a criterion based on early contributions.

However, the on-chain evidence provided by Mystiko could not be verified. There is no clear information about whether the wallets belong to insiders or ordinary users.

Cryptocurrency airdrops could harm decentralized finance (DeFi) protocols in the long run, as many airdrops are filled with squatters who simply market-sell the rewards.

These people create downward pressure without using the protocol after receiving the rewards, thus damaging the health of the protocol.

In February, pseudonymous Yearn.finance developer Banteg reported that Starknet’s airdrop eligibility list included mostly airdrop invaders, and that 701,544 wallet addresses were linked to duplicate or renamed GitHub accounts controlled by airdrop invaders.

This is just one example of how complex and problematic airdrops have become.

In March 2023, it was revealed that airdrop hunters had collected $3.3 million worth of tokens from 1,496 wallets during the Arbitrum (ARB) airdrop into just two wallets they controlled.

Such behavior has raised serious concerns questioning the effectiveness of token airdrops.

Mystiko Network and similar projects need to develop more transparent and fair processes to ensure fairness in token distribution and rebuild community trust.

Investors want to be sure that airdrops are conducted fairly and expect unethical practices such as insider trading to be avoided.

Such issues can have significant impacts on the long-term success of cryptocurrency projects.