Irys airdrop, a promising blockchain listed on Coinbase and Binance, recently exposed a major loophole in token distribution. With one entity seizing 20% via a network of 900 wallets, causing a 16% price drop and reigniting debates on anti-Sybil protection in the crypto space, this incident sheds light on airdrop vulnerabilities. This case highlights how sophisticated players can manipulate airdrops, undermining decentralization efforts.
Translated on November 30, 2025 at 12:24 by Simon Dumoulin
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Is There a Scam Hidden Behind the Irys Project?
On November 28th, blockchain analytics firm Bubblemaps identified a suspicious cluster of 900 wallets that participated in the Irys airdrop. These addresses showed no on-chain history prior to the event, a major red flag for market observers. The pattern reveals premeditated coordination rather than organic network participation.
The Irys distribution had allocated 8% of the total supply, or 400 million tokens, to reward early users and promote decentralization. Out of the 1,273 wallets that claimed their allocations, this single cluster recovered 80 million IRYS, representing approximately $4 million at the time of discovery.
On-chain data shows that 500 of these wallets immediately transferred their tokens to intermediary addresses before routing the funds to Bitget. This behavior suggests preparation to liquidate the position, creating significant selling pressure on the order book. The market reacted brutally: IRYS dropped 16% in 24 hours to settle around $0.032.
An Industrial-Scale Airdrop Exploitation Scheme
Bubblemaps’ analysis reveals a sophisticated methodology. All wallets in the cluster were funded from the same source, following a typical airdrop farming pattern. These entities use scripts to generate hundreds of addresses, simulate minimal blockchain activity, then maximize their allocations during distributions.
This technique transforms airdrops into short-term value extraction opportunities rather than decentralization mechanisms. Bad actors exploit the absence of rigorous KYC verification and the permissionless nature of public blockchains. They create the illusion of a diverse user base while a single entity pulls the strings.
The impact isn’t limited to price. When a single entity controls 20% of the initial float, it distorts price discovery and can manipulate the market according to its interests. Legitimate holders suffer effective dilution of their governance power, compromising the project’s decentralization promise.
Bubblemaps clarified it found no evidence linking the Irys team to this cluster. This distinction is crucial as it rules out the hypothesis of internal manipulation, but doesn’t solve the structural problem of airdrops vulnerable to Sybil attacks.
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The Crypto Ecosystem Facing a Systemic Vulnerability
The Irys affair isn’t isolated. Market observers have identified several similar cases recently: 60% of the aPriori airdrop captured by one entity via 14,000 addresses, $170 million from the MYX drop claimed with 100 freshly created wallets. This recurrence demonstrates a systemic vulnerability in token distribution practices.
Projects relying on airdrops to bootstrap their community face a dilemma. Without robust identity verification, they remain exposed to bad actors. But implementing strict KYC contradicts crypto’s decentralized and permissionless ethos. Intermediate solutions like on-chain reputation scores, proof of humanity, or prior staking mechanisms offer potential paths, but remain imperfect.
Irys positions itself as an “on-chain AWS” for data storage and smart contract execution. The project has raised over $13 million from VCs and benefits from listings on major exchanges like Binance and Coinbase. This institutional legitimacy makes the controversy all the more problematic for investor confidence.
Post-airdrop volatility and token concentration in the hands of a single actor raise questions about the model’s long-term viability. Legitimate holders risk suffering prolonged downward pressure if the entity decides to gradually liquidate its position. Psychological and technical support around $0.030 will be crucial in the coming days to avoid capitulation.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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