DeFi venture fund Divergence Ventures tried to game the airdrop of Ribbon Finance, one of its own portfolio companies, and it worked — but it’s returning the tokens.
The fund, which put $25,000 into Ribbon Finance, returned 702 ETH today after extracting as much from the protocol’s airdrop.
At 1:07 PM, Divergence Ventures, which was founded by Compound’s Calvin Liu and serial investor George Lambeth, posted a thread on Twitter explaining part of the operation.
“One of the goals of Divergence Ventures is to make money. Making money in crypto is generally like playing a game,” the company wrote in the thread. “In playing this game, we try many tactics, all the time. Most fail. This one ‘worked,’ and obviously worked in a relatively big way.”
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Ribbon Finance unlocked 30M tokens that had been airdropped in May on Oct. 7. It also enabled additional liquidity mining rewards for those who provided liquidity to its RBN-ETH pool on Uniswap.
At 11:31 AM Friday, Twitter user Gabagool noted an account on Twitter that had at that point earned 652 ETH from what it described as Ribbon Finance airdrops. The wallet was subsequently connected to the fund due to an Ethereum Name Service address that it also held.
Gabagool explained to The Defiant via Twitter DM that deposits being made into the final wallet were all coming from multiple addresses that had received the airdrop and then swapped it for ETH right after the RBN token was unlocked.
Ribbon enables crypto-structured products for decentralized finance. The details of the airdrop were announced on May 25. The team used a fairly complex structure that ultimately airdropped 3% of its total RBN supply to 1620 addresses.
No Insider Information
Divergence said it had no insider information and simply guessed there would be an airdrop. While not explaining the precise operation, it admits to attempting to skew the outcome of the airdrop in its favor. “We realized that in sybil-ing the $RBN airdrop we crossed a line,” Divergence tweeted.
Calvin Liu did not reply to a request for comment from The Defiant.
Julian Koh, co-founder of Ribbon, also tweeted that it had not given Divergence any information about how an airdrop of RBN would work. Koh declined to comment further to The Defiant.
At 1:24 PM, Divergence tweeted a link to an Ethereum transaction where 702 ETH had been sent to the Ribbon Finance treasury.