[Short #64] The Bots Have Arrived
Beep Boop 🤖
How many of you finished yesterday’s monster of a post on Otherside and Building in Public? Gold star for those of you that did, let me know by replying to the e-mail or writing a comment with your feedback. I want to hear from you!
We’ll switch gears a bit today with a different but arguably heavy topic. It’s shorter though 😉. Let’s talk about
Bots
Robots? Like these?
Sorta…yes bots as in they automate certain tasks, but not on an industrial level. I’m talking about bots on a retail level. What does that mean?
If you were wondering why you couldn’t get a PS5 or a hot pair of sneakers for yourself or a loved one, this is why. Bots.
Now, I’m a little more knowledgeable than the average person about this space because I’ve been a part of this ecosystem as someone that enjoys sneakers and sneaker culture. That said, I do not participate in botting myself (team manual baby!).
Botting in retail has been around for a while. Why haven’t you heard of it?
Niche - Focuses high margin items that have limited releases where there is clear supply/demand imbalance with a consumer base that would be willing to pay a premium. Sneakers, computer parts, video game consoles. This is not pervasive to the point of impacting our daily lives like if people botted groceries.
There’s bigger problems - Yes botting sucks for the average Joe, but it is still small relative to larger problems. Worst case scenario is a consumer pays for a product 25-100% more than retail. Not trying to sweep this under the rug, but this isn’t world hunger or war we’re solving.
A lot of people are participating - Not only that, many of them are underage. This gets messy. Fast. I do respect the entrepreneurial spirit of young kids these days. So many options to create a business, even if it isn’t in the most respectable of ways.
Think people who illegally downloaded music 15 years ago or illegally stream TV shows/movies online. It’s like trying to destroy an ant colony with your fingers one by one.
Let’s take a live example. Today, Louis Vuitton released their rare collab with Nike, designed by the late Virgil Abloh (RIP).
First of all, most things Nike are already in high demand. Mix that with LV and you get one of the most hyped drops of the year.
You bet your bum that this was botted like a MF.
What are we doing about bots?
I’m not a security expert, but typically stakeholders are more reactive when it comes to creating safeguards, versus proactive. Why spend time, money, and resources on a small problem?
Recently, bots have become too big to ignore for retailers that want to get their product in the hands of their real consumers.
So what have they done?
Required in-store pick up and quantity limitations
Incorporate raffle systems with social account integrations (eg: connected Twitter + e-mail + Instagram accounts via Gleam and other tools)
Control traffic through virtual waiting rooms like Queue-It
Surprise drop or reveal product pages last minute
Create fake landing pages
Incorporate steps that require manual intervention (eg: before going to a product page they have to answer a 5 question quiz correctly)
Sorta…kinda…not really. Especially if you have the best bots.
It really comes down to incentives. If retailers get botted and sell out, they still…sell out. There’s just a middleman in the form of a reseller that take additional margin that the real end consumer pays for if they want the item bad enough.
And you can’t put the blame solely on the retailers. They are incorporating more bot protection tactics. Problem is, the bots and the developers behind them have stronger incentives.
Let’s revisit the above protection measures with how people/bots work around these tactics.
Required in-store pick up and quantity limitations.
Bring along friends or your younger relatives to wait in line for you. Pay them a small cut for waiting in line for you
Incorporate raffle systems with social account integrations (eg: connected Twitter + e-mail + Instagram accounts)
Use tools to mass create accounts or buy aged accounts to enter these raffles at scale
Control traffic through virtual waiting rooms like Queue-It
Create multiple Chrome users, buy proxies (mass VPN to mimic traffic from different IP addresses)
Surprise drop or reveal product pages last minute
This helps mass botting to a degree. Monitor pages for any changes, updates, and refreshes
Create fake landing pages
This helps mass botting to a degree. Monitor pages for any changes, updates, and refreshes
Incorporate steps that require manual intervention (eg: before going to a product page they have to answer a 5 question quiz correctly)
This helps mass botting to a degree. Resell groups work together to make sure the group wins. Even though each individual doesn’t check out a lot, the group as a whole does.
Botting has gotten so bad that the ultimate form of bot protection is coming soon.
Woah, that’s serious. What rules is this bill proposing?
Bot creators and developers are definitely shaking in their boots with this one, but only if (it will) and when it passes. This bill was introduced late last year and still has several steps until it becomes law. They’re watching closely though.
So what does this have to do with NFTs?
Everything.
If botting is ingrained in specific niches in retail, why wouldn’t it creep into Web3? You can incorporate similar tactics in the physical world and apply it to digital. And better yet, you don’t have to deal with shipping and handling, meeting a buyer in a sketchy parking lot, or wait for payouts. This is a dream come true for resellers.
And the folks who’ve had built bots for physical retail now have another line of business: doing it for NFTs. On top of that, they probably enjoy building things so there’s a new challenge for them.
Here’s an example of one without revealing the name. They have 111k followers.
Additionally there have been stories of people botting projects and making millions. An interesting case is with @reshadeth, a 15 year old who made $17 million through mass creating accounts (a sybil attack) for two projects: Murakami Flowers and Otherside Land (yes, the Otherside from yesterday’s post).
The Twitter thread has since been deleted (publicly bragging about something like this is a very 15 year old thing to do. their brains aren’t fully developed after all 😂), but this is pretty good overview.
So what does retail do? Let all these botters flood the space and become the Web3 middlemen like they’ve done with physical retail? Well, not quite.
The anti-bot bill will likely pass sooner than later. I imagine this would apply broadly to the Web3 space as well
From what I can tell, the minting bots tools are used more for free or low value mints versus higher quality projects. It would require a significant amount of capital to bot higher price point projects. And if you have the capital for that, chances are the public will notice (lots of on-chain sleuths who call out bad actors on Twitter). Whales (reputation-wise and legally) have too much at stake to play those little games. They have better ways to make money.
Higher quality projects will incorporate a variety of tactics to ensure as many dedicated members of the community have access to mint the project.
Because the blockchain is public, there are more ways to gate who qualifies for a mint (eg: wallet age, assets in wallet, wallet activity requirements, etc.)
Tools like Premint.xyz help to gate lower quality raffle entries and traffic along with adjustable requirements. Not bulletproof but still better than most anti-bot tools in Web2 retail.
Transparently, I may test out one of these bots to see how it works. Not sure if I’ll have the time to maximize the value of such a tool, but I’m of the mindset of ‘don’t knock it until you try it’ for something like this.
What’s next for bots?
This will be a game of whack-a-mole with bots or workarounds for that extra edge in the never-ending quest to maximize profit. The anti-bot bill will make large scale botters consider think twice or pivot the business, but bots will still be around.
Also, many of these tools do more than just automate the minting process. There is a suite of analytics tools to help maximize profit in different ways, and that’s within the rules.
There are other methods to maximize chances and access to Whitelists/Allowlists to popular projects, but I won’t get into that. 😉
At the end of the day, Web3 and the higher quality NFT projects want to create strong communities around a mutual interest, brand, or vision. The innovation and creativity across all aspects of running a business, including minimizing bot activity is just another exercise for the best in the game.
See 🤖 you 🤖 tomorrow 🤖