LayerZero’s witch hunt is still in full swing, with LayerZero co-founder Bryan Pellegrino announcing that the final list of witch addresses is expected to be released by the end of June. Today, Bryan provided detailed explanations on how the review and handling of witch attacks and low-value transactions are conducted on the X platform. Below is a compilation of the full text in a Q&A format by Odaily Planet Daily.
Review Criteria and Final Goals
Before addressing user questions, Bryan Pellegrino first defined what constitutes spam transactions (referred to as low-value transactions in this article) and how these transactions are handled and incentivized. Here is his original statement:
“We are currently considering qualifications from a broad perspective. The focus is clearly on real users, and the most fair, widely distributed, highly consistent, and most enduring users.”
To a large extent, this has been inspired by the results of the witch process, and any true final definition will come directly from LayerZero, not from me.
There are 6 million initial wallets, with 3 million wallets having fewer than 5 transactions, which are to be seriously considered. All transactions below $1.00 are downweighted by 80%, but still calculated as 1/5 of a normal transaction, as are all “worthless NFTs”.
Here, a worthless NFT is defined as having a “market value” or “total transaction volume” less than 0.00001 ETH. For example, Gas drop type transactions are also considered valid transactions.
Transactions are then normalized based on specific protocol fees (rather than fees on the underlying blockchain where the transactions occur). The lowest value of the processed data is the qualification standard, with a cap. Finally, a multiplier will be obtained based on early usage.
In summary: eliminating witches, eliminating spam transactions, capping semi-linear rewards, rewarding early users, rewarding long-term users, and rewarding all non-standard protocol interactions such as LP through RFP.
(RFP is a distribution protocol launched by LayerZero, allowing each project to establish its own distribution standards based on its overall token distribution. All projects with OApp, OFT, or ONFT contracts on the mainnet are eligible to apply for RFP.)
Q&A Compilation
Bryan Pellegrino addressed specific details in response to user questions, with key points summarized below:
Liquidity Provider Incentives
Q: Liquidity pools are important, they should be rewarded. If someone adds LP for more than a week, there is a 99% chance it is not a Sybil.
A: The incentives for liquidity providers will be managed by RFP.
Worthless NFT Definition and Handling
Q: I created an NFT on Holograph in May last year, it cost me 0.003 ETH. If it is considered a worthless NFT, clearly it has no value. But I like the NFT I created, I am one of the first to try using L0 cross-chain NFT.
A: These transactions were initiated to use our cross-chain system, and I would be happy to distinguish them from the millions of “worthless NFT” transactions. I hope Holograph rewards creators through RFP. That is why we have established the RFP process.
(Given the response, these transactions are still classified as “low-value NFTs” and are not within the direct airdrop scope of LayerZero, but may receive incentives through RFP.)
Gas Drop Calculation
Q: Honestly, you integrated over 50 chains, but 90% of Refuel costs are less than $1, each tx value is reduced by 80%, you are penalizing many users.
A: I think this is a valid criticism and part of the reason I made public comments. The original post discussed Stargate and OFT transfers, with countless txs reviewed in each witch cluster, ranging from $0.001 to $0.25. I don’t know much about Gas Drop data, but we have to evaluate it.
(Gas Drop refers to Gas refuel, which usually involves replenishing Gas fees to other accounts at a low cost. The section implies that Gas Refuel operations will be included in the incentives but typically with discounted calculations.)
Discount Calculation Method
Q: If I have about 130 Layerzero transactions, of which about 10 are worthless NFT transactions, should the entire address be discounted by 80%, or only the 10 worthless transactions?
A: Only those 10 transactions, not all of them.
Worthless NFT Definition
Q: What defines a worthless NFT?
A: Market value at the time of the snapshot or lifetime traded value.
Handling High Protocol Fees Alongside Worthless NFTs
Q: If I spend fees on transferring worthless NFTs, is it discounted?
For example, if I transfer 5 worthless NFTs and pay $50 in fees to the protocol; is my cost now $10?
A: Worthless NFTs are discounted by 20% of a normal transaction, so you can consider $1 of cost now valued at $0.20 in the entire model.
What Does Downweight Calculation Mean?
Q: What does an 80% downweight mean?
A: The value of a normal transaction costing $1 is valued at 1, so if you send $0.01 back and forth cross-chain, each transaction is calculated as $0.01 x 20%.
How are LayerZero Contract Deployers Incentivized?
Q: With nearly 60,000 contracts deployed, what is the purpose of RFP, and why is there dev stripping in the RFP process?
A: Contract deploymenters are incentivized through RFP, and the dev stripping exists in the RFP process.
(The note implies that incentives must be applied for through RFP.)
Meaning of Protocol Fees
Q: If you bridge STG through Stargate, are there no protocol fees?
A: There are no Stargate protocol fees, but there are LayerZero protocol fees (for DVN and executors). This is the meaning of fees, not for Stargate or other applications.
How is Transaction Volume Considered?
Q: Isn’t transaction volume an important part of all the previous discussions? Why remove it?
A: Transaction volume is the standard for Stargate RFP or OFT, but from LayerZero’s perspective, all messages are more or less equal. This is why sending $100 or $100,000,000 in OFT fees is treated the same.
Q: Think about it, if we assign the same value to transfers of $100 and $100,000,000, then even transfers of $0.000001 should have the same weight, because “all messages are more or less equal.”
A: Yes, in an ideal world of equal usage, this would not be necessary, especially with a large number of low-value transactions ranging from $0.001 – $0.20 just spinning in place, as well as a large number of worthless NFT transactions generated just for the sake of creating txs. I believe anything with a reasonable purpose should be considered a normal transaction, and anything “obviously” inorganic should be discounted.
Conclusion
In summary, transactions below $1 and NFT transactions valued below 0.00001 ETH will be considered low-value transactions (Spam), with weights reduced to 20% when calculating incentives, but not affecting the weight calculation of other normal transactions. Finally, a semi-linear distribution (with an upper bound cap) will be based on the protocol fees paid.
Additionally, early users will receive additional incentives, and non-standard LayerZero transactions such as providing liquidity will be handled separately through RFP.
