After enduring a harrowing period of falling prices and jarring reports of hacks, a new report has unmasked a bot infestation that threatens the entire Web3 ecosystem.
- A new report reveals Web3 activity is significantly propped up by hordes of bots.
- Blockchain gaming is the biggest victim of the unethical trend with bots making up to 40% of the user base on average.
- Going forward, projects will have to strengthen their policies around the creation of new accounts — a move that could contradict the principles of Web 3’s decentralization.
In a Monday report, blockchain bot detection firm Jigger revealed that a significant portion of Web3 activity is propelled by bots. The report found out that GameFi projects are infected the most, with bots representing over 80% of the user base of some of these games.
After a careful inquisition into over 60 blockchain projects in the space, Jigger’s report found 200,000 active bots. Jigger’s analysis team noted that, on average, every Web3 game was made up of 40% bots while legitimate users accounted for 60% of activity.
Projects built on Binance Smart Chain appear to be the most affected by viral bot activity, with some recording up to 70% bots. For instance, 55% of users of the more popular BSC-based metaverse game Mobox have been determined to be bots.
Aside from gaming, other DeFi sectors are also grappling with the same bot challenge. Jigger co-founder, Levan Kvirkvelia, opined that bots are not only in games, but rather. “all services with a profit are flooded with bots.''
Bots constitute 87% and 84% of the user base of Ariva Digital, which intends to be a blockchain solution for tourism, and AnRKey, a social crypto gaming platform, respectively, while Voxels, a virtual world on the Ethereum blockchain, has a bot activity of 65%.
The report noted that 13,000 bots were created on Biswap, the first DEX on the BNB Chain, following the announcement of a referral program.
How Jigger identifies bots
Jigger identifies bot activity on Web3 platforms by linking wallets belonging to the same person. “We take a list of token holders, put them on a graph, and link wallets using our algorithm,” Kvirkvelia said. “The result is more like a petri dish.”
The report highlighted bots as colored clusters in a petri dish and has been hailed by market participants as potentially saving the industry from imploding. Jigger’s report goes on to suggest a way out of the bot quagmire by using a lightweight check such as a selfie to verify the authenticity of the account.
The bane of bots in crypto
Bots have been plaguing crypto projects for years, spamming the comments of leading figures in the space and spreading scams across the community. Trading bots on cryptocurrency exchanges have been identified as another challenge for the industry as they can manipulate prices by posting sell orders at lower rates or by employing spoofing tactics.
In the NFT market, bots are further used to automatically mint new NFTs, which are then flipped for a profit. Even in some major NFT auctions, so-called NFT sniper bots monitor auctions and submit last-moment bids, buying up limited-edition digital assets at a low price.
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Ruholamin Haqshanas is contributing crypto writer for Milk Road and finance journalist with over two years of experience writing in the field. He has a solid grasp of various segments of the FinTech space, including the decentralized iteration of financial systems (DeFi) and the emerging market for non-fungible tokens (NFTs).