It was in a refrigerated “tin shed” just 40 minutes from Ho Chi Minh City that Mirai Labs CEO Corey Wilton finally understood the immense scale by which crypto airdrops are being gamed.
“It’s genuinely scary,” Wilton tells Magazine shortly after visiting a “phone farm” in Southern Vietnam, which he estimates has at least 30,000 smartphones in a room no larger than a studio-sized apartment.
For four years, Winton had been hoping to get a first-hand look at the type of operation that undermined his flagship NFT horse-racing game Pegaxy in 2021.
“When Pegaxy blew up, we were sitting at a max DAU [daily active users] of about 500,000, and at that point, we started getting a lot of reports of botting farms,” Wilton says.
The bots would control a hundred accounts at a time that would snap up high-win rate horses and race them for a chance to win in-game currency, which could then be sold for real money.
“It was like screenshots of someone’s screen with like ten applications on it or 20 applications on it, but you’re also seeing it across social media,” he explains.
Pegaxy pitted players against each other in an automated 15-horse race. Wilton says the bot farms turned his game from “who can win” to “who can extract faster,” — which shifted the vibe of the game and accelerated its eventual demise.
“I recognized pretty early that they’re essentially extracting from our user base […] and it basically set me on a warpath.”
An inside tour of a crypto airdrop bot phone farm
In May, Wilton finally got his wish, getting an exclusive tour of one of these “sophisticated phone farms” in Vietnam thanks to a former Pegaxy player who spotted it on TikTok.
“I went to two locations. It was 40 minutes from where I am, so it’s fairly remote. You definitely don’t have foreigners going there, and they have no interest in anybody knowing,” he recalls.
Wilton describes one of the locations as a tin shed accessible off the street with the air conditioning set to “as cold as possible.”
Inside, the shed is lined with metal racks, each housing thousands of smartphones and leaving just narrow walkways for employees. The setup would resemble something you’d see at a bootleg crypto mine.
“It’s not pretty […] You can even see in the videos, the wire management. Disastrous.”
Wilton said he was shown the “rental arm” of the business, where clients can hire the phone farm for whatever purpose they see fit.
As opposed to traditional bot servers, each device in a phone farm has their own SIM cards and device fingerprinting, and can be set up to spoof IP geolocation, making them harder to detect and useful when systems require each account to be tied to a phone number.
Phones are also relatively cheap for their computing power, and one device failing in the network can be easily replaced without impacting output.
Wilton says that in the example he saw, a human would use a computer to control a master phone connected to over 500 slave phones.
Whatever was done on the master phone would be replicated by all the slave devices.
“Their client list is actually mostly Web2. So you’ve got K-pop labels that are renting it for views, you’ve got casinos that are emulating humans so that it feels like the casino’s competitive, but they’re actually beating you and instigating you to lose.”
“You’ve got Web2 gamers who play mobile games and just do a big farm of it and sell pre-leveled-up accounts,” he adds.
However, Wilton says the main business is actually “manufacturing.”
Crypto airdrop phone farm in a box
The operator would buy old, broken smartphones cheaply and then fix them up with software and other modifications to sell them internationally as a do-it-yourself phone farm.
The project produces over 1,000 farm-ready phones weekly, and each phone farm box contains around 20 phones.
“These guys don’t operate the phones. They are not the ones who are farming airdrops or doing the actions. They’re basically a production line […] so their main business is actually selling it and shipping it internationally to somebody who wants to do it at home.”
“So then you just keep them online and you can buy more phones and just plug it in.”
It’s no wonder bot-assisted crypto airdrop farming has become such a massive problem in the crypto space.
Crypto airdrop farming is the practice of gaming crypto airdrops — usually by creating multiple wallets and spoofing user activity to scoop up free tokens that are meant to reward early adopters. While most crypto airdrops do not require mobile phone number verification, the unique device fingerprint and IP address help get around Sybil protections.
The practice of farming often leads to airdrop farmers immediately dumping the tokens after receiving them, impacting price, and can also lead to fewer real users receiving the tokens. Projects often see a surge of fake activity ahead of an airdrop, followed by plummeting user numbers and prices afterward.
Bots blamed for controversial crypto airdrops
Bots, whether operated from a mass of phones or a single computer, have wreaked particular havoc on crypto airdrop campaigns.
Last year in June, Ethereum zero-knowledge (ZK) layer-2 scaler ZKsync was slammed as users accused its airdrop of opening the door wide open to bots.
Lookonchain posted about an “airdrop hunter” who received over 3 million ZKsync (ZK) tokens, worth $753,000 at the time, through 85 wallets. Another user publicly boasted about making nearly $800,000 from their “highly profitable $ZK sybilling strategy.”
A Sybil attack is a security threat where an attacker creates multiple fake identities to gain an advantage within a network. The name comes from the book “Sybil,” which was a case study of a woman with multiple personality disorder.
Mudit Gupta from ZKsync rival Polygon called it the “most farmable and farmed airdrop ever probably,” blaming a lack of anti-bot measures, even though ZKsync had seven eligibility criteria aimed at protecting against Sybil attacks.
ZKsync argued in an FAQ that Sybils can employ highly complex strategies these days that make them indistinguishable from real people, and that applying too strict criteria may stop a few Sybils but hurt many more real users.
But last month, Binance offered a different view when it cracked down on bots in its Binance Alpha Points program.
“Traditional bots usually follow predictable, repetitive patterns, which makes them relatively easier to detect,” a Binance spokesperson tells Magazine.
“But with the rise of AI-powered bots, we’re now dealing with systems that can closely mimic human behavior — from browsing habits to interaction timing — making detection much more difficult.”
Binance says it has been strengthening its fight against bots by developing new tools that analyze these patterns at scale.
“One example is our entity-linked address analysis, which helps uncover clusters of wallets controlled by the same actor, even when they appear independent.”
“These insights are particularly useful in exposing disguised holdings, multisend manipulation, and wash trading — tactics that AI-powered bots often use to simulate organic participation and fake liquidity.”
And it’s not just crypto airdrops, bots have also been blamed for flooding the crypto space with useless memecoins.
“The great majority of tokens launched on PumpFun and LetsBonk are today run by bots,” Coinbase head of product Conor Grogan recently posted on X, finding that the top accounts on memecoin platform LetsBonk launch, on average, a new token every 3 minutes.
Daren Matsuoka, a data scientist and partner of a16z Crypto, argues that Sybil attacks are a relatively recent phenomenon.
“For most of crypto history, we sort of had built in Sybil resistance — gas fees were just pretty high on these layer 1 blockchains,” he says in an April podcast for a16z Crypto.
“It would legitimately cost a few or tens of dollars to execute the actions you need in order to qualify for these airdrops. But now with the infrastructure improvements that we’ve seen, it has become very cheap, and that I’d say is going to totally change the game for the attacks and defense mechanisms that need to be put in place.”
A16z Crypto’s chief technology officer, Eddy Lazzarin, has been talking up the importance of a “proof of human” system.
AI controlled Bot Farm.
100s of them tossing 1000s of comments and postings designed to agitate you. Polarize you. Offend you.
Disempowering you. pic.twitter.com/pXouvqdRZf
— Brian Roemmele (@BrianRoemmele) May 26, 2025
Prove you’re human to participate in crypto airdrops
“AIs can now create long records of lifelike behavior. The best bot farms are already impossible to detect reliably, and soon mediocre farms will be too,” says Lazzarin in a post in May.
Lazzarin has been most excited about a “proof of personhood” system, which would make it easy and free for a person to prove they’re a real human but costly and difficult for bots or fraudsters to do at a mass scale.
Sam Altman’s eyeball scanning project, World, is a great example of this, Lazzarin says. The idea is that each person can only sign up once for a World ID — their uniqueness guaranteed by a scan of their retina (no two retinas are the same).
“I’d love to see many people experiment with systems like WorldID [which] uses biometrics and privacy-preserving mechanisms to limit each person to a single ID,” adds Lazzrin in the airdrop podcast.
“Anybody who wants to airdrop should really think about verifying the humanity of people interacting with the system.”
Vitalik Buterin however, argues that having one ID per person isn’t a perfect solution either, as it now gives a single attack surface (their secret identity key) to know everything about their prior activity. At the same time, biometrics and government identification can still be spoofed.
Why not just get rid of crypto airdrops?
If crypto airdrops can be so easily gamed, then one obvious choice is to rid the space of them.
However, there are arguments as to why they still have their place. Airdrops related to genuine activity in a protocol can be a great way to decentralize control of a project via tokens and voting rights. They also create a lot of buzz.
“One obvious reason is that when you distribute a lot of something of potential value, a lot of people pay attention. So it has marketing benefits,” says Lazzarin.
“Airdrops are simply a marketing tool,” agrees Wilton. However, he says that projects should assume that some users will sell the tokens, and that this is simply the marketing costs needed to gain users.
The key would be to ensure that these users are real people who will “stick around,” he says.
Binance, meanwhile, argues that bot automation isn’t inherently harmful.
“In fact, it can be helpful in certain situations when used transparently and properly — such as bots that facilitate liquidity, execute strategies on behalf of users, or simulate stress-testing during audits.”
Felix Ng
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