Robots Account for 40% of Average Users of the Web 3 Platform

TL;DR

· An anti-bot safety software program, Jigger, has published a report that shows that 40% of the participant base of web3 video games are bots.

· Kvirkvelia, the company's co-founder, asserted that it is not only GameFi whose activity is artificially boosted, but all services in web 3 with a profit are flooded with bots.

· The CEO of Polkastarter, Ghanem, pointed out that the income mechanism of web3 video games are responsible for creating the bot problem.

· While there is a trend in the web3 industry to shift away from play-to-earn and toward play and earn, profits remain the most important reason for participating in play-to-earn projects.




Introduction

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Jigger co-founder Levan Kvirkvelia disclosed in a Twitter thread that 40% of GameFi and web 3 users are bots, citing his company's most recent research. Such a staggering percentage suggests that many popular blockchain games are seriously compromised. The entire industry could be hijacked by a swarm of malicious actors running bot farms to maximize value from play-to-earn platforms.

Bots are a problem in most video games that allow accounts to accumulate value. Investigating the bot supply in web2 could be extremely difficult because the information is diverted via VPNs to hide the identity of the bad actors.


Jigger's Report on Bots in GameFi and Web 3

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Jigger is an anti-bot safety software program that researches Web 3 platforms. The latest report published on its gallery asserted that 40% of the participant base of web3 video games are bots. Jiggers team examined and discovered proof of 20,000 bots throughout over 60 web3 video games.
Binance Chain appears to be the most affected by bot infestation, with some projects built on it recording over 70% of activity coming from bots. Tiny World, a top three P2E game on BNB Chain with 35,000 monthly active players, was discovered to have only 30% legitimate users. Mobox, an NFT and yield farming game, has revealed that 55% of its players are bots.
However, GameFi is not the only company whose activity is artificially boosted. According to Kvirkvelia, "all services with a profit are flooded with bots." According to the report, bots account for 87% of users on Ariva Digital, a blockchain solution for the tourism industry, and 84% on AnRKey X, a social gaming platform for gamers and content creators.
The research used the blockchain's transparency to connect wallets and create a probabilistic matrix to identify the most likely Bot candidates. A screenshot from Jigger shows a visualization of the interconnected accounts.
The report also included a list of web3 initiatives and their bot proportions. Some projects had over 80% bots, with even DeFi projects focusing on the use of referral schemes.


Jigger's Research Process and the Discovery

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Jigger discovered bots and multiple accounts while gathering data for the report by connecting wallets belonging to the same person. Kvirkvelia stated that they take a list of token holders, plot them on a graph, and use their algorithm to connect wallets. He described the end result as a petri dish, referring to the strange beauty of charts with multiple-colored clusters representing bots in the game.

Jigger successfully removed hordes of bots from web3 platforms thanks to this approach. In one recent case, the company secured $60,000 in monthly tokens by removing bots from Mines of Dalarnia, an Ethereum and BSC P2E action-adventure game. Using data analysis, Jigger also identified eight large botnets extracting tokens from the MoD.

According to Jigger, multi-accounting and automation fraud steal $200 million from web3 games yearly. The company employs a combination of on-chain data and service analytics to rid the gaming industry of bots. When suspicious activity is detected, a player is asked to submit an "unobtrusive" Proof of Humanity - a selfie - to ensure that the user is genuine.


Reasons for the Proliferation of Bots on Web 3 Platforms

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Since the report's release, many players in the web 3 sector have been reacting to the research. The CEO of Polkastarter Gaming, Omar Ghanem, stated that the report's findings were not surprising. He asserted that the info within the web 3 space exhibits that virtually 2 million wallets have interacted with gaming DAPPs which is very different from the indication of real active gamers. Ghanem pointed out that the income mechanism of web3 video games are responsible for creating the bot problem. He contended that as long as video games on the web 3 are primarily click-on to earn by nature while on the core of the game, there is token farming through job repetition, Bots' problems will persist.


How to take caution from automation fraud

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There are some ways to detect inflated activity as users. These ways include:

1.The ratio of registered users to active users
Most proof-of-stake (PoS) networks have low registration fees, and many are free to use. This factor results in troves of "fake" active addresses interacting with the DApp and incentives for developers and investors to increase their metrics.

Scrutinizing the DApps rankings by the number of users yields some astonishing results, particularly in the Tron, EOS, and Thundercore networks. Interestingly, some DApps claim to have more active users than industry leaders, such as OpenSea, Uniswap, and Axie Infinity.
In the case of the AnRKey X game on the Polygon blockchain, the ratio of bots to holders reached 84%. Whereas there could be a plausible explanation for distancing the project developers from the bot deployment, Jigger's research shows that analysts should not use the number of token holders as a proxy for active users.

2. Community Engagement
Even if the Daily Average Users metric is high, inconsistent community engagement on the project's social networks is a red flag. Well-funded projects aim to "purchase" real users, whereas bots cannot contribute to discussions in a meaningful and consistent manner.

Logging into the official group and scrolling through the last 40 or 60 messages will be very helpful. Are there genuine community questions and constructive debates, or is it just activity such as random posts by group admins and shilling from bot accounts?

Proceeding to the project's official Twitter, Twitch, or Instagram page, repeat the process of reviewing community posts and comments. Compared to the number of shares, this qualitative data should yield a far more accurate analysis.

3. Identifying false token liquidity
There are market makers who provide token liquidity services for a fee. These market makers can keep bids and offers at reputable exchanges, manipulating the price using order flow-based algorithms.

An experienced investor will notice subtle differences between fake volumes, order book depth, and actual trading activity. First, analyzing the 2% depth on bids and offers is a simple way to avoid illiquid tokens.


Take note of how the UFO Gaming token has an insufficient number of bids compared to its daily trading volume.

While having a market maker is usually good because it encourages users to trade the token actively, it does not always translate to trading volume. It may lead to community interest dissipating and eventually cause token liquidity to plummet.


Conclusion

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Although there is a trend in the web3 industry to shift away from play-to-earn and toward play and earn, profits remain the most important reason for participating in play-to-earn projects, according to a survey report. The report depicted that three out of every four investors worldwide join the crypto industry because of GameFi, with 51% citing a desire to make a quick buck as their primary motivation. By these figures, it is reasonable to expect that demand for Jigger's solutions will continue to rise.



Author: M. Olatunji, Gate.io Researcher
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