{"id":489326,"date":"2022-09-01T01:30:00","date_gmt":"2022-08-31T22:30:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/analyst-says-40-of-users-in-most-web3-games-are-bots-heres-how-to-avoid-being-fooled\/"},"modified":"2022-09-01T01:30:00","modified_gmt":"2022-08-31T22:30:00","slug":"analyst-says-40-of-users-in-most-web3-games-are-bots-heres-how-to-avoid-being-fooled","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/analyst-says-40-of-users-in-most-web3-games-are-bots-heres-how-to-avoid-being-fooled\/","title":{"rendered":"# Analyst says 40% of users in most Web3 games are bots \u2014 Here\u2019s how to avoid being fooled"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a4143deb7339\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a4143deb7339\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/analyst-says-40-of-users-in-most-web3-games-are-bots-heres-how-to-avoid-being-fooled\/#%E2%80%9D_Analyst_says_40_of_users_in_most_Web3_games_are_bots_%E2%80%94_Heres_how_to_avoid_being_fooled_%E2%80%9C\" >&#8221; Analyst says 40% of users in most Web3 games are bots \u2014 Here\u2019s how to avoid being fooled &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/analyst-says-40-of-users-in-most-web3-games-are-bots-heres-how-to-avoid-being-fooled\/#Comparing_registered_users_to_active_users\" >Comparing registered users to active users<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/analyst-says-40-of-users-in-most-web3-games-are-bots-heres-how-to-avoid-being-fooled\/#Faking_community_engagement_is_incredibly_hard\" >Faking community engagement is incredibly hard<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/analyst-says-40-of-users-in-most-web3-games-are-bots-heres-how-to-avoid-being-fooled\/#Detecting_fake_token_liquidity\" >Detecting fake token liquidity<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Analyst_says_40_of_users_in_most_Web3_games_are_bots_%E2%80%94_Heres_how_to_avoid_being_fooled_%E2%80%9C\"><\/span>&#8221; Analyst says 40% of users in most Web3 games are bots \u2014 Here\u2019s how to avoid being fooled &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-3511d6da>The decentralized <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lication industry pushed above $40 billion in smart contract deposits in February 2021, and currently the figure stands at $59 billion. To date, \u201creal money\u201d continues to flow into the sector, and on Aug. 29, gaming startup Limit Break raised $200 million. The project gained popularity after the successful launch of its DigiDaigaku free-mint NFT collection.<\/p>\n<p>According to a report by Dove Metrics and Messari, the crypto industry saw $30.3 billion in funds raised in H1 2022. This amount surpassed the $30.2 billion seen in 2021. Excluding the $10.2 billion in funding raised for the centralized finance sector leaves a whopping $20 billion that was invested in DApps, nonfungible tokens (NFTs) and Web 3 infrastructure.<\/p>\n<p>One might question how much of that money has effectively been deployed or reinvested in ventures owned by the same investment groups. Of course, there are a handful of clever ways to overextend those announcement numbers without breaking any regulation, but there&#8217;s undoubtedly a great deal of money flowing toward decentralized applications.<\/p>\n<p>There\u2019s always been a healthy amount of distrust in the actual number of active users on DApps, but so far, no hard evidence of cheating has been presented. So what tools can retail users employ to detect inflated activity? Well, it turns out there are at least three: active users, community engagement and liquidity.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Comparing_registered_users_to_active_users\"><\/span>Comparing registered users to active users<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Most proof of stake (PoS) networks charge minimal registration fees and many are free to use. This leads to troves of \u201cfake\u201d active addresses that interact with the DApp and it creates incentives for developers and investors to boost their numbers.<\/p>\n<p>Filtering the DApps rankings by the number of users brings some staggering data, especially in the Tron, WAX, Flow, EOS and Thundercore networks. Some of the DApps claim to have more active users than industry leaders like OpenSea, Uniswap and Axie Infinity.<\/p>\n<p>Levan Kvirkvelia, the co-founder of Jugger, a Web3 bot prevention service, analyzed over 60 <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/game\/\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Game\" target=\"_blank\" rel=\"noopener\">game<\/a>s and DApps and found that 40% of the active users are actually automated bots or a single entity controlling multiple accounts.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">after analyzing 60+ games and services, we found 200 000 bots. on average, every web3 game has 40% bots. <\/p>\n<p>link to the database with the results at the end of a thread  <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/vvvuhgeRLV\">pic.twitter.com\/vvvuhgeRLV<\/a><\/p>\n<p>\u2014 Levan (@LevanKvirkvelia) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/LevanKvirkvelia\/status\/1564290386138464256?ref_src=twsrc%5Etfw\">August 29, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>In some cases, such as the AnRKey X game on the Polygon network, the ratio of bots to holders reached 84%. Even though there could be a plausible explanation for distancing the project developers from the bot deployment, Kvirkvelia&#8217;s research shows that analysts should not use the number of token holders as a proxy for active users.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Faking_community_engagement_is_incredibly_hard\"><\/span>Faking community engagement is incredibly hard<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A sign to look out for is inconsistent community engagement on the project&#8217;s <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social<\/a> networks even if the DAU metric is high. Well funded projects aim to \u201cbuy\u201d real users whereas bots are not skilled enough to contribute to discussions in a meaningful and consistent way.<\/p>\n<p>This analysis doesn\u2019t take longer than 10 minutes because it only requires one to log in to the official group and scroll through the last 40 or 60 messages. Are there real questions and constructive debates by the community or merely activity from group admins and shilling from bot accounts?<\/p>\n<p>Moving on to the project&#8217;s official Twitter, Twitch, YouTube or Instagram page, follow the same process of reviewing posts and comments from the community. This qualitative data should yield a far more accurate analysis versus the number of shares, likes or active blockchain addresses.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Detecting_fake_token_liquidity\"><\/span>Detecting fake token liquidity<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Believe it or not, market makers offer liquidity services for tokens. For a certain fee, they can keep bids and offers at reputable exchanges at all times, moving the price using algorithms based on the orderflow.<\/p>\n<p>An experienced investor will note nuances that distinguish fake volumes and order book depth from actual trading activity. For starters, analyzing the 2% depth on bids and offers provides an easy way to avoid illiquid tokens.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-08\/567033a7-b479-4c59-9747-242604d5be4d.png\"><figcaption style=\"text-align: center;\"><em>UFO Gaming (UFO) top markets by volume. Source: Coinmarketcap<\/em><\/figcaption><\/figure>\n<p>Notice how the UFO Gaming token holds an unreasonably low amount of bids compared to its daily trading volume. The aggregate demand from buyers is 2% below the last trade and is less than 0.6% of the reported trading volume.<\/p>\n<p>While having a market maker is usually a good thing since it encourages users to trade the token actively, it does not necessarily translate to trading volume. Dissipating interest from the community eventually causes the token liquidity to plunge.<\/p>\n<p><strong>Related: <\/strong><strong><em>Singapore state investor leads $100M round for crypto firm Animoca, Report<\/em><\/strong><\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-08\/148b1587-80ce-4020-b4fb-7f1f1f9a3f90.png\"><figcaption style=\"text-align: center;\"><em>Orchid Protocol (OXT) top markets by volume. Source: Coinmarketcap<\/em><\/figcaption><\/figure>\n<p>The example above shows Orchid Protocol token, which despite being listed on Binance, Coinbase, Kraken and Kucoin, amasses $675,000 in daily volume. This effect causes the 2% order book depth to range between 9% to 47% of the daily trading activity, which sounds quite off.<\/p>\n<p>Investors should be aware that venture capitalists and market makers are becoming even more skilled at hiding their manipulation. For instance, finding a top-200 coin at Binance with distorted ratios on daily volume and order book depth is almost impossible. Traders, gamers and investors should take care to not be misled by high DAU metrics for popular DApps. Doing qualitative analysis of the platform\u2019s social media accounts and GitHub is a great way to cross-reference on-chain and trading data.<\/p>\n<p><em>The views and opinions expressed here are solely those of the <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/noshitcoins\"><em>author<\/em><\/a><em> and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.<\/em><\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/analyst-says-40-of-users-in-most-web3-games-are-bots-here-s-how-to-avoid-being-fooled\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Analyst says 40% of users in most Web3 games are bots \u2014 Here\u2019s how to avoid being fooled &#8220; The decentralized application industry pushed above $40 billion in smart contract deposits in February 2021, and currently the figure stands at $59 billion. To date, \u201creal money\u201d continues to flow into the sector, and on&#8230;<\/p>\n","protected":false},"author":1,"featured_media":489327,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDgvZjQ0MTc5MTUtODVhYS00MmMzLTgyMTMtNmFiMWNlMzQ2MzZjLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,75014,91083,86752,74863,74860,78168,107545,74939,73785],"class_list":["post-489326","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-binance","tag-blockchain-game","tag-bot","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-dapps","tag-liquidity","tag-market-analysis","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/489326","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=489326"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/489326\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/489327"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=489326"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=489326"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=489326"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}