Synopsis- CEO of Mirai Labs, uncovers a 30,000-phone bot farm in Vietnam exploiting crypto airdrops. This industrial-scale fraud threatens Web3 integrity, revealing how sophisticated, hidden operations siphon millions from real users.
Imagine a room smaller than your apartment. Now cram 30,000 smartphones inside. Disturbingly, this isn’t sci-fi. It’s a chilling reality exposed by Corey Wilton, CEO of Mirai Labs. He walked into a refrigerated tin shed near Ho Chi Minh City. His discovery? A massive bot farm systematically stealing crypto airdrops meant for real people. “The industry has absolutely no clue how sophisticated this stuff is,” Wilton warns Coin Telegraph Magazine, revealing a hidden world syphoning millions from legitimate users. This industrial-scale fraud operates with frightening efficiency. Worse still, it thrives just minutes from a major metropolis, largely unseen.
The Factory Floor of Fraud
Wilton entered an unassuming, freezing-cold shed. Metal racks filled every inch. Each rack held thousands of buzzing smartphones. Narrow walkways barely allowed workers passage. “It’s genuinely scary,” Wilton admitted after his visit. He estimates at least 30,000 devices operated there. Chaos reigned visually. “Disastrous,” Wilton described the wire management. This wasn’t just any operation. It specifically undermined his own project years earlier.
Bots ravaged his Pegaxy NFT horse-racing game during its 2021 peak. Pegaxy boasted 500,000 daily users then. Suddenly, reports flooded in about bot farms. Automated accounts seized high-value digital horses. They raced them constantly, extracting valuable in-game currency. This currency converted directly into real cash. As a result, the game’s spirit died. “It turned from ‘who can win’ to ‘who can extract faster,” Wilton lamented. That experience ignited his determination. He needed to see these farms firsthand. Finally, in May, a tip led him. A former Pegaxy player spotted the farm on TikTok. Wilton secured an exclusive tour. He visited two remote locations. “They have no interest in anybody knowing,” he noted. The operation sells access too. Clients rent the entire phone farm. They use it for any purpose they choose.
“Their client list is actually mostly Web2,” Wilton revealed. K-pop labels rent it to inflate views. Casinos use it to fake competition, tricking real players into losing. Mobile gamers level up accounts for resale. However, manufacturing is their core business. They buy broken phones cheaply. Then they refurbish them meticulously. Software modifications prepare each device. Finally, they ship DIY phone farm kits globally. Each box contains roughly 20 prepped phones. Astonishingly, they produce over 1,000 ready phones weekly. “They’re basically a production line,” Wilton explained. International buyers simply plug them in. They then run their own automated schemes remotely. Phones are categorised by generation. Gen 1 phones remain mostly intact. Gen 3 phones get stripped bare. This maximises cooling, boosting their value significantly. This setup makes crypto airdrop farming devastatingly effective.
The Crypto Industry’s Blind Spot
The industry seems woefully unprepared. Wilton’s stark warning echoes: “The industry has absolutely no clue.” Why are phone farms so effective? Crucially, each phone boasts its own SIM card. Unique device fingerprinting further masks them. Operators easily spoof IP geolocation too. These factors make detection incredibly difficult. Systems requiring phone numbers get bypassed effortlessly. Phones offer cheap, replaceable computing power. One device failing? Simply swap it out.
Output barely dips. Wilton witnessed the control system. A human uses one computer. This controls a single “master” phone. That master phone commands over 500 “slave” devices. Actions performed on the master replicate instantly everywhere. Crypto airdrop farming exploits free token distributions. Farmers create countless fake wallets. They spoof user activity convincingly. They snatch tokens meant for genuine early adopters.
This results in real users often losing out entirely. Farmers usually dump tokens immediately. This crashes prices predictably. Fake user activity surges before an airdrop. Then real users and prices plummet afterward. ZKsync’s recent airdrop faced massive criticism. Users widely accused it of enabling bots. Lookonchain exposed one hunter. This person received over 3 million ZK tokens. That haul was worth $753,000 then. They used 85 separate wallets. Another user bragged publicly. They made nearly $800,000 farming ZKsync. Mudit Gupta from rival Polygon called it history’s “most farmable and farmed airdrop.” He blamed weak anti-bot measures. ZKsync defended its seven eligibility criteria. They argued modern Sybils mimic real people perfectly. Overly strict rules might harm real users more. Essentially, they admitted the bots won this round.
Detection Gets Harder
Binance recently cracked down on bots. Their Alpha Points program faced exploitation. A Binance spokesperson provided insight. “Traditional bots follow predictable, repetitive patterns,” they stated. These are relatively easy to catch. However, AI-powered bots change everything. “They can closely mimic human behaviour,” the spokesperson warned. This includes browsing habits and interaction timing. Detection becomes vastly more complex. Binance is fighting back aggressively. They develop new analytical tools. Entity-linked address analysis is one weapon. This uncovers wallet clusters controlled secretly by one actor. It exposes disguised holdings effectively. Multisend manipulation gets revealed. Wash trading tactics show up clearly. These are common bot strategies. They fake organic participation and liquidity. Bots plague more than just airdrops. Memecoins face overwhelming bot creation.
Conor Grogan, Coinbase’s product head, confirmed this. He posted findings on platform X recently. “The great majority of tokens launched… are today run by bots,” Grogan stated. Top accounts on LetsBonk launch tokens constantly. They average one new token every three minutes. Daren Matsuoka, an a16z Crypto partner, sees a shift. Sybil attacks grew recently, he argues. Historically, high gas fees provided resistance. Executing airdrop actions costs real dollars. Now, infrastructure improvements slash costs. “It has become very cheap,” Matsuoka noted. This fundamentally alters the attack landscape. Defences must evolve rapidly. Eddy Lazzarin, a16z Crypto’s CTO, champions “proof of personhood.” He sees it as essential. “AIs can now create long records of lifelike behaviour,” Lazzarin posted in May.
Top bot farms are already reliably undetectable. Mediocre farms will soon reach that level. Lazzarin gets excited about solutions like Worldcoin. Sam Altman’s project scans retinas. It guarantees one unique ID per human. “I’d love to see many people experiment,” Lazzarin urged. Projects should verify user humanity. Vitalik Buterin offers caution, though. One ID per person creates a single attack point, he notes. Biometrics and government IDs can also be spoofed. The security challenge remains immense.
Can Airdrops Survive This Onslaught?
Given the rampant fraud, why continue airdrops? Legitimate arguments persist. Properly executed airdrops decentralise protocol control. They distribute tokens and voting rights widely. They generate massive buzz and user acquisition. “It has marketing benefits,” concedes Eddy Lazzarin. Corey Wilton bluntly agrees. “Airdrops are simply a marketing tool.” Projects must expect token dumps, he advises. Consider this a necessary marketing expense. The goal? Attract real users who stay.
Binance offers a nuanced perspective too. Bot automation isn’t inherently evil, they suggest. Used transparently, bots provide liquidity. They execute user strategies helpfully. They simulate stress during audits. The core problem remains intent and scale. Industrial phone farms exist solely for extraction. They exploit systems at the expense of real participants. Their existence in remote Vietnamese sheds proves the scale.
Wilton’s journey, sparked by a TikTok tip, reveals this hidden economy. Old phones get resurrected cheaply. Custom software brings them online. Global networks then deploy them. Profit drives everything; ethics vanish. Ultimately, trust in crypto mechanisms erodes. Projects face a brutal choice. They can implement stricter, potentially exclusionary checks. Alternatively, they risk rewarding sophisticated fraudsters massively. The 30,000-phone farm near Ho Chi Minh City isn’t unique. It’s a symptom of a larger, uglier truth. Until the industry truly grasps this sophistication, real users will keep losing out. The cold air in that tin shed chills more than just phones; it chills the very promise of fair participation in crypto’s future. The bots, it seems, are winning.
Written By Fazal Ul Vahab C H
