Arbitrum Odyssey has a bot problem

Arbitrum recently announced the revival of its Odyssey campaign, more than a year after its initial launch. The new campaign, which starts on September 26 and will run for 7 weeks, aims to encourage the Arbitrum community to explore some of the ecosystem's biggest projects. To incentivize its community, Arbitrum will distribute up to 16 NFT badges for each participant that completes the activities listed on its portal for the Oddysey activity.

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The original Arbitrum Odyssey, announced in April 2022 and slated to begin in June the same year, was intended to be a 2-month-long initiative that gave users the ability to experience different Arbitrum ecosystem projects and in return, receive exclusive NFTs designed by artists Ratwell & Sugoi.

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Just over a week into Odyssey, when the first task was completed and NFT claiming went live, Arbitrum daily transactions hit what was then an all-time high. On June 29, Arbitrum decided to pause Odyssey. In a Twitter thread about the stoppage, the platform claimed, "Because of the heavy load being put on the chain causing higher than normal gas fees, we’ve decided it is best to pause the Odyssey until Nitro is released so that all communities and projects within Arbitrum continue to have a friction-free experience."

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Despite its short-lived initial run, Arbitrum Odyssey managed to grow its address count as a result of the activity, reaching as high as 65,361 daily new addresses on June 28, one day before the event was halted.

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Nitro refers to the latest iteration of Arbitrum's tech stack, which is a "fully integrated, complete Layer 2 optimistic rollup system" that is said to increase throughput and lower fees for the network. Earlier this month, Arbitrum officially rolled out Nitro, giving the chain roughly 7x the capacity of Ethereum. And as promised, the platform proceeded to resume its Odyssey campaign soon after NItro's launch.

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At least that's the official account of events concerning Arbitrum Odyssey. However, the 0xScope team analyzed what happened in the original Odyssey campaign and found that a huge portion of the high traffic that the event generated was caused by bots.

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Arbitrum Odyssey's bot problem

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By the time Arbitrum paused Odyssey back in June 2022, the platform distributed 438,529 NFTs. Out of this total supply, 282,123 NFTs went to various bots that participated in the event, accounting for around 64.3% of the total supply, according to 0xScope's research.

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In total, there are 282,123 bots that participated in Arbitrum Odyssey, all handled across 88,241 bot groups. As a result, each bot group ended up receiving an average of 3.2 NFTs, which is concerning for an activity that is probably supposed to distribute quest-related NFTs on a 1:1 basis for participants.

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Bot activity is inevitable in any campaign where there are free NFTs to be given away for completing tasks. But when a particular group of bots end up taking a significant chunk of the rewards, it ends up harming the integrity and subverting the growth goals of the campaign being run.

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This is what happened in the case of Arbitrum Odyssey. Specifically, there's one bot group that ended up taking too much of the NFT rewards in this campaign.

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Introducing: The Odyssey NFT farmer

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Meet 0xc363, the biggest beneficiary of the Arbitrum Odyssey campaign. Using 0xScope's bot detection system, we discovered significant activity from this address during the event. This particular address controlled 48,357 bot addresses, with 46,839 of those participating in Arbitrum Odyssey. Assuming that each of those addresses received 1 NFT from the event, it means that one entity with lots of bots likely ended up receiving 10.7% of all the NFTs distributed by Arbitrum for the campaign.

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During Arbitrum Odyssey's launch in June 2022, 0xc363, named 'Raydalio' on Opensea, distributed $18,780 worth of $ETH to the bot addresses through the intermediary distribution contract 0x7662. This distribution occurred 372 times, with each transaction involving 60-150 receiving addresses.

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Upon receiving the $ETH, the bot addresses claimed the Odyssey NFTs and subsequently consolidated them into multiple addresses. The bot group owner then began selling these NFTs on Opensea and Tofu NFT marketplaces. See the money flow here.

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The $ETH obtained from these sales was eventually funneled not only into 0xc363 but also into various exchanges through multiple paths. Based on the average price when he was selling Odyssey NFTs, estimated to be around $25 per NFT, the bot group owner managed to generate profits of approximately $1.17 million on a budget of $18,780, a 62x return on its "investment."

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Insights

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As we said earlier, it's almost impossible to prevent or stop all bot activities in giveaway campaigns like Arbitrum Odyssey. However, projects can mitigate this problem by spotting trends within their activities to catch users who potentially abuse the system. After all, if the objective of Arbitrum Odyssey campaign is to bring more users to the projects being supported, the ecosystem would be negatively affected in the long run if it turned out that the increase in activity for these projects are bot-driven.

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One way to counter this bot problem is to use Web3 analytics services that specialize in entity identification, like 0xScope and Scopescan, which can help platforms like Arbitrum in detecting which of their users are real and which ones are likely bots. Aside from ensuring fairness in the campaigns they run, using Web3 analytics will also give projects a closer look into the trends that emerge in their overall activities, enabling them to make better decisions on their next steps.

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