GAME-ing Stakedrops?

TL;DR

The prevailing assumption by the Proposal 16 is that the anonymous whale knowingly gamed the stakedrop. The blockchains are public, which if we know the right tools we can investigate and learn how this could be possible.

Is there a particular moment, where it is obvious the Anonymous Whale had advanced knowledge of the terms of the stakedrop?

Or will we find that there was a consistent pattern of investing $ATOM into delegators?

We Are Focused

Through 2020–2021, the Anonymous Whale delegated funds in new addresses as each address reached a threshold of approximately 100K $ATOM. As each address filled up a new one would be started.

On Feburary 18th 2021, a snapshot was taken at the upgrade of Stargate (cosmoshub-4). The Anonymous Whale had already spent 12 months loading up 50 addresses with near even amounts of delegation.

On August 21st 2021, a stakedrop was announced capping the amount per address to 50K based on the Feburary 18th, 2021 snapshot.

On October 1st, 2021, the mainnet was live and the stakedrop was shaken by the merging of 50 accounts unexpectedly into one. How could this happen?

Full Data is here.

The Merging is Complete

On October 1st, 2021 an address began to accumulate 50 stakedrops into a single address. Did the Anonymous Whale in Juno Network Proposal 16 intentionally game the stakedrop?

Let’s consider what it would mean to discover gaming of the stakedrop. We need to find a moment in time where an above average level of stake was suddenly allocated, in anticipation of an airdrop which would reward staking, but limit to a certain cap.

So let’s take a look at how they might have gamed it. We need to find the addresses that were merged. We should take a look at who they were delegating to, and we should also take a look at how and when the various funds delegated.

First let’s take find the spender addresses of the `coin_received` events by the address in question.

junod q txs --events coin_received.receiver=juno1aeh8gqu9wr4u8ev6edlgfq03rcy6v5twfn0ja8
-o json — limit 1000 | jq -r '.txs[].logs[].events[] | select(.type == "coin_spent") | .attributes | from_entries | [.spender, .amount] | @csv'

We now have a listing of all the addresses which received the unfair amount of stakedrop, which turned out to be controlled by a single entity. Let’s now look to who received the delegations.

I Heed the Call

We know from the stakedrop criteria that up to 50K $JUNO was awarded to Cosmos stakers at the snapshot on 2/18/2021. Therefore we need to convert JUNO addresses to ATOM addresses. I used https://bech32.enigma.co/ to re-encode the addresses.

bech32 addreses

After reducing any duplicates, we have the set of addresses to track down on Cosmos. Let’s figure out which validator received the delegations.

The first address delegated to CCN (now GAME) as early as May 2020. Let’s use Figment.io’s hubble to show me the delegators to CCN (now GAME) on cosmoshub-3

Delegations to CCN (now GAME)

There were 31 matches to the set of addresses that sent to the anonymous whale, but we’re missing 20 or so. Repeating the process, we can discover that the remaining addresses also delegated to DEBO.

Going back to hubble.. we can find all the delegators to DEBO. Cross-referencing them, we have a perfect picture that the whale was delegating to two validators … CCN (now GAME) and DEBO prior to the 2/18 snapshot.

Power Overwhelming

Just to make sure that the validators were legit participants of the Cosmos network, let’s take a look at their voting power over time. Let’s look at the voting power history of CCN (now GAME), for cosmoshub-3

CCN (now GAME) on cosmoshub-3 (11/26/2020–2/18/2021)

CCN (now GAME) first became active on 4/6/2020. They continued through the cosmoshub-4 upgrade. To be sure, let’s take a look at CCN (now GAME)’s voting history on cosmoshub-4. Again, the validator has continue operations.

CCN (now GAME) on cosmoshub-4 (2/18/2021–3/11/2022)

Let’s look at the voting power history of DEBO on cosmoshub-3 and cosmoshub-4. This validator did start a bit earlier in November 2020, but still well before the $JUNO stakedrop (October 2021), and well before the Stargate upgrade (February 18, 2021).

DEBO on cosmoshub-3 (11/26/2020–2/18/2021)

DEBO even continued operations of their validator through the stargate upgrade and well into late 2021, but have seemed to have declined in power through 2022.

DEBO on cosmoshub-4 (2/18/2021–3/11/2022)

Clearly the validators were and still are participating in the Cosmos network.

Our Foe Strikes

Now that we know the addresses and the validators delegated. Let’s examine how these addresses first become active… we would expect a large amount to become active all at once.

To gather data for this, I painstakingly went address by address into mintscan to find the first delegation and add it’s date and amount to the sheet.

Here we see the investment per address aggregated by date.

Note: this is only showing the FIRST delegation per address.

While it appears to accelerate towards February, keep in mind the TOTAL amount of delegations that have been staked. By February, the accounts cumulatively staked millions of $ATOM, which means the amount of value available to re-invest was also compounding. Let’s summarize on a monthly basis, and we see that February 2021’s delegation amount was not that unlike August 2020.

The whale was consistently staking more and more $ATOM. Neither of these graphs show advanced knowledge of a stakedrop for $JUNO to be announced 6 months later on Aug 18, 2021.

Duty is my shield

As a validator, on the $JUNO network my duty is to the community as a whole. Proposal 16 bases itself on the fact that the owner of the account acted in a way which unfairly profited on the stakedrop. My investigation above shows that instead, the Anonymous Whale’s approach to security resulted in a windfall, and was in line with the rules of the stakedrop.

There’s no strong evidence that the Anonymous Whale acted on any insider knowledge. There is a consistent pattern of delegating up to roughly 100K $ATOM per address before starting a new one. In this manner, the Anonymous Whale is using defense in depth to allocate multiple wallets, to avoid a total loss of funds in the event of a security breach.

Given the evidence, it appears there was no foul play. I urge everyone to reconsider their stance on Proposal 16. If you come to the same conclusion, I respect that. Thanks for your time and attention.

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