The Dark Side Of Web3 Growth: The Rise Of Artificial Inflation And Bot Activity

The Web3 industry has experienced rapid growth recently, but a concerning trend has emerged: a significant portion of this growth may be artificial. According to a 2022 study by Jigger, approximately 40% of active users in Web3 games were found to be bots or fake accounts. This phenomenon has significant implications for the industry’s long-term trust and growth.

Matvii Diadkov, founder of Bitmedia. IO and a seasoned expert in Web3 and crypto, has sounded the alarm on this issue. He notes that the prevalence of bots and fake users is not only an ethical concern but also a direct economic disadvantage for businesses. By eliminating bot-driven noise, companies can gain more accurate user metrics, optimize their marketing spend, and make informed product decisions based on real customer behavior.

The motivations behind this artificial inflation of user metrics are varied. Many Web3 projects, particularly those in the early stages, may feel pressure to demonstrate success to attract investors and secure funding. By artificially inflating their metrics, these projects may appear more attractive to investors, but this practice ultimately misleads everyone involved, including investors, advertisers, policymakers, and end-users. Certain sectors within Web3 are more susceptible to bot activity than others.