It was in a refrigerated “tin shed” simply 40 minutes from Ho Chi Minh Metropolis that Mirai Labs CEO Corey Wilton lastly understood the immense scale by which crypto airdrops are being gamed.
“It’s genuinely scary,” Wilton tells Journal shortly after visiting a “cellphone farm” in Southern Vietnam, which he estimates has a minimum of 30,000 smartphones in a room no bigger than a studio-sized house.
For 4 years, Winton had been hoping to get a first-hand have a look at the kind of operation that undermined his flagship NFT horse-racing sport Pegaxy in 2021.
“When Pegaxy blew up, we have been sitting at a max DAU [daily active users] of about 500,000, and at that time, we began getting a variety of reviews of botting farms,” Wilton says.
The bots would management 100 accounts at a time that may snap up high-win price horses and race them for an opportunity to win in-game foreign money, which may then be offered for actual cash.
“It was like screenshots of somebody’s display screen with like ten purposes on it or 20 purposes on it, however you’re additionally seeing it throughout social media,” he explains.
Pegaxy pitted gamers towards one another in an automatic 15-horse race. Wilton says the bot farms turned his sport from “who can win” to “who can extract sooner,” — which shifted the vibe of the sport and accelerated its eventual demise.
“I acknowledged fairly early that they’re basically extracting from our consumer base […] and it principally set me on a warpath.”
An inside tour of a crypto airdrop bot cellphone farm
In Could, Wilton lastly acquired his want, getting an unique tour of certainly one of these “refined cellphone farms” in Vietnam due to a former Pegaxy participant who noticed it on TikTok.
“I went to 2 areas. It was 40 minutes from the place I’m, so it’s pretty distant. You undoubtedly don’t have foreigners going there, they usually have little interest in anyone realizing,” he recollects.
Wilton describes one of many areas as a tin shed accessible off the road with the air-con set to “as chilly as doable.”
Inside, the shed is lined with steel racks, every housing hundreds of smartphones and leaving simply slender walkways for workers. The setup would resemble one thing you’d see at a bootleg crypto mine.
“It’s not fairly […] You’ll be able to even see within the movies, the wire administration. Disastrous.”
Wilton stated he was proven the “rental arm” of the enterprise, the place shoppers can rent the cellphone farm for no matter goal they see match.
Versus conventional bot servers, every system in a cellphone farm has its personal SIM playing cards and system fingerprinting, and could be set as much as spoof IP geolocation, making them tougher to detect and helpful when techniques require every account to be tied to a cellphone quantity.
Telephones are additionally comparatively low-cost for his or her computing energy, and one system failing within the community could be simply changed with out impacting output.
Wilton says that within the instance he noticed, a human would use a pc to manage a grasp cellphone linked to over 500 slave telephones.
No matter was performed on the grasp cellphone could be replicated by all of the slave gadgets.
“Their consumer listing is definitely principally Web2. So that you’ve acquired Ok-pop labels which are renting it for views, you’ve acquired casinos which are emulating people in order that it feels just like the on line casino’s aggressive, however they’re truly beating you and instigating you to lose.”
“You’ve acquired Web2 avid gamers who play cell video games and simply do an enormous farm of it and promote pre-leveled-up accounts,” he provides.
Nonetheless, Wilton says the principle enterprise is definitely “manufacturing.”
Crypto airdrop cellphone farm in a field
The operator would purchase outdated, damaged smartphones cheaply after which repair them up with software program and different modifications to promote them internationally as a do-it-yourself cellphone farm.
The venture produces over 1,000 farm-ready telephones weekly, and every cellphone farm field accommodates round 20 telephones.
“These guys don’t function the telephones. They don’t seem to be those who’re farming airdrops or doing the actions. They’re principally a manufacturing line […] so their foremost enterprise is definitely promoting it and transport it internationally to someone who needs to do it at house.”
“So you then simply preserve them on-line and you should buy extra telephones and simply plug it in.”
It’s no surprise bot-assisted crypto airdrop farming has turn into such an enormous downside within the crypto house.
Crypto airdrop farming is the apply of gaming crypto airdrops — often by creating a number of wallets and spoofing consumer exercise to scoop up free tokens that are supposed to reward early adopters. Whereas most crypto airdrops don’t require cell phone quantity verification, the distinctive system fingerprint and IP deal with assist get round Sybil protections.
The apply of farming usually results in airdrop farmers instantly dumping the tokens after receiving them, impacting worth, and may also result in fewer actual customers receiving the tokens. Initiatives usually see a surge of pretend exercise forward of an airdrop, adopted by plummeting consumer numbers and costs afterward.
Bots blamed for controversial crypto airdrops
Bots, whether or not operated from a mass of telephones or a single laptop, have wreaked explicit havoc on crypto airdrop campaigns.
Final 12 months in June, Ethereum zero-knowledge (ZK) layer-2 scaler ZKsync was slammed as customers accused its airdrop of opening the door extensive open to bots.
Lookonchain posted about an “airdrop hunter” who obtained over 3 million ZKsync (ZK) tokens, price $753,000 on the time, by way of 85 wallets. One other consumer publicly boasted about making practically $800,000 from their “extremely worthwhile $ZK sybilling technique.”
A Sybil assault is a safety menace the place an attacker creates a number of pretend identities to realize a bonus inside a community. The identify comes from the e book “Sybil,” which was a case research of a lady with a number of character dysfunction.
Mudit Gupta from ZKsync rival Polygon known as it the “most farmable and farmed airdrop ever in all probability,” blaming a scarcity of anti-bot measures, although ZKsync had seven eligibility standards aimed toward defending towards Sybil assaults.
ZKsync argued in an FAQ that Sybils can make use of extremely complicated methods today that make them indistinguishable from actual individuals, and that making use of too strict standards could cease a couple of Sybils however harm many extra actual customers.
However final month, Binance provided a unique view when it cracked down on bots in its Binance Alpha Factors program.
“Conventional bots often comply with predictable, repetitive patterns, which makes them comparatively simpler to detect,” a Binance spokesperson tells Journal.
“However with the rise of AI-powered bots, we’re now coping with techniques that may intently mimic human habits — from shopping habits to interplay timing — making detection rather more troublesome.”
Binance says it has been strengthening its struggle towards bots by creating new instruments that analyze these patterns at scale.
“One instance is our entity-linked deal with evaluation, which helps uncover clusters of wallets managed by the identical actor, even once they seem impartial.”
“These insights are significantly helpful in exposing disguised holdings, multisend manipulation, and wash buying and selling — techniques that AI-powered bots usually use to simulate natural participation and pretend liquidity.”
And it’s not simply crypto airdrops, bots have additionally been blamed for flooding the crypto house with ineffective memecoins.
“The nice majority of tokens launched on PumpFun and LetsBonk are immediately run by bots,” Coinbase head of product Conor Grogan not too long ago posted on X, discovering that the highest accounts on memecoin platform LetsBonk launch, on common, a brand new token each 3 minutes.
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Daren Matsuoka, an information scientist and companion of a16z Crypto, argues that Sybil assaults are a comparatively latest phenomenon.
“For many of crypto historical past, we form of had in-built Sybil resistance — gasoline charges have been simply fairly excessive on these layer 1 blockchains,” he says in an April podcast for a16z Crypto.
“It might legitimately value a couple of or tens of {dollars} to execute the actions you want so as to qualify for these airdrops. However now with the infrastructure enhancements that we’ve seen, it has turn into very low-cost, and that I’d say goes to completely change the sport for the assaults and protection mechanisms that should be put in place.”
A16z Crypto’s chief expertise officer, Eddy Lazzarin, has been speaking up the significance of a “proof of human” system.
AI managed Bot Farm.
100s of them tossing 1000s of feedback and postings designed to agitate you. Polarize you. Offend you.
Disempowering you. pic.twitter.com/pXouvqdRZf
— Brian Roemmele (@BrianRoemmele) Could 26, 2025
Show you’re human to take part in crypto airdrops
“AIs can now create lengthy data of lifelike habits. The very best bot farms are already unimaginable to detect reliably, and shortly mediocre farms will probably be too,” says Lazzarin in a submit in Could.
Lazzarin has been most excited a few “proof of personhood” system, which might make it straightforward and free for an individual to show they’re an actual human, however expensive and troublesome for bots or fraudsters to do at a mass scale.
Sam Altman’s eyeball scanning venture, World, is a superb instance of this, Lazzarin says. The thought is that every particular person can solely join as soon as for a World ID — their uniqueness assured by a scan of their retina (no two retinas are the identical).
“I’d like to see many individuals experiment with techniques like WorldID [which] makes use of biometrics and privacy-preserving mechanisms to restrict every particular person to a single ID,” provides Lazzrin within the airdrop podcast.
“Anyone who needs to airdrop ought to actually take into consideration verifying the humanity of individuals interacting with the system.”
Vitalik Buterin, nonetheless, argues that having one ID per particular person isn’t an ideal resolution both, because it now provides a single assault floor (their secret identification key) to know every part about their prior exercise. On the similar time, biometrics and authorities identification can nonetheless be spoofed.
Why not simply eliminate crypto airdrops?
If crypto airdrops could be so simply gamed, then one apparent alternative is to rid the house of them.
Nonetheless, there are arguments as to why they nonetheless have their place. Airdrops associated to real exercise in a protocol could be an effective way to decentralize management of a venture through tokens and voting rights. Additionally they create a variety of buzz.
“One apparent motive is that once you distribute a variety of one thing of potential worth, lots of people listen. So it has advertising advantages,” says Lazzarin.
“Airdrops are merely a advertising instrument,” agrees Wilton. Nonetheless, he says that initiatives ought to assume that some customers will promote the tokens, and that that is merely the advertising prices wanted to realize customers.
The important thing could be to make sure that these customers are actual individuals who will “stick round,” he says.
Binance, in the meantime, argues that bot automation isn’t inherently dangerous.
“In reality, it may be useful in sure conditions when used transparently and correctly — corresponding to bots that facilitate liquidity, execute methods on behalf of customers, or simulate stress-testing throughout audits.”
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Felix Ng
Felix Ng first started writing in regards to the blockchain trade by way of the lens of a playing trade journalist and editor in 2015. He has since moved into masking the blockchain house full-time. He’s most excited about revolutionary blockchain expertise aimed toward fixing real-world challenges.