Exclusive Interview with Lumao Studio: Unveiling the "Traffic Manipulation" Scene in Web3

Author: Fu Ruhe, Odaily Planet Daily

Recently, LayerZero and various Layer 2 projects have launched a fierce attack on the "farming" community, and from the perspective of rule-making and decision-making power, it seems that the two sides are not evenly matched. The introduction of various anti-witch policies corresponds to the suspicion that many eligible airdrop addresses are "insider trading," leading to conflicts between two groups that once shared a common understanding.

Until Binance founder He Yi published an article recounting the rise and fall of the crypto world, stating: "Today, the market has indeed changed again. The infighting between farming studios and L2 projects has turned into a farce, and the farming era may be coming to an end." This has completely shifted the focus of the crypto world onto the two groups.

From an external perspective, projects have introduced anti-witch mechanisms to limit the airdrop interactions of farming studios, while farming studios continuously increase costs to meet anti-witch standards. It seems that the project parties and farming studios are in an irreconcilable conflict, but is this really the case?

Odaily Planet Daily conducted an anonymous interview with the founder of a farming studio, revealing the fascinating stories behind the farming studios and project parties through LM (a pseudonym).

Farming Studios May Have Emerged from KOLs

The term "farming" actually originated quite early. After institutional capital entered the market, project parties no longer needed to conduct public token financing through IEOs; institutions replaced the public in investing in early projects to ensure their survival and maintain project development, while the public participated in early project construction to qualify for airdrop tokens.

At the same time, as the value of UniSwap airdrop tokens surged, subsequent projects became popular for multi-address interactions, giving rise to the verb "farming."

Regarding the motivation for farming, interviewee LM said: "In the early days, although I was also obtaining token airdrops, such as UniSwap, I didn't think it would bring high returns. However, towards the end of the last bull market, the NFT sector became very hot, and I met some well-known KOLs. These KOLs were probably the first group to start farming; when the Aptos airdrop occurred, each of them received at least hundreds of thousands of USDT. That's when I truly realized the value of farming. My first farming project was Blur, as the NFT sector was booming at that time. The airdrop rules for Blur were based on trading on the platform, but during my first farming attempt, I lacked relevant experience and made some mistakes, resulting in only about 2000 USDT in profit."

So what was the catalyst for LM to truly establish a cluster of farming businesses? LM said: "I really started to build a farming studio when L2 projects began to rise. At that time, the whole network was farming zk sync, Starknet, and other Layer 2 projects. I realized that I needed to establish a studio to achieve scale; after all, one person's time and energy are limited, and more people mean more power. In fact, there had been related farming studios established long before."

From LM's response, it can be seen that farming studios began to gradually emerge in the later stages of the last bull market and have matured over time, with relevant KOLs becoming the main body of this business.

Unique Structure of the Interviewee's Farming Studio

When discussing LM's current studio business, LM stated: "Currently, my studio has about 7 full-time staff, plus interns and distributed office personnel, totaling around 20 people. The business is generally divided into three sections: KOL development, community, and farming studio."

LM explained: "The KOL development is not about making money like traditional MCN companies; rather, it provides a platform for them to communicate and learn. Most of the KOLs we develop are university students majoring in blockchain-related fields. They have a certain knowledge base in Web3 and want to develop in the blockchain industry in the future. I hope to provide some education so that they can enter related companies in Web3 after graduation. This not only supplies talent to Web3 but also helps me gain some recognition and benefits when they enter relevant companies since their first stop is my studio."

This KOL development initiative not only brings a large number of practitioners into Web3 but also provides potential returns for LM. One can imagine that if these individuals enter capital, project parties, or even exchanges, the value they can bring later is evident, reminiscent of the undercover roles in the movie "Infernal Affairs."

Speaking of the community, LM's community-building efforts focus more on content accumulation services, with traffic still being the core competitiveness. LM did not elaborate much on the community aspect, but for farming studios, it can provide project information diversity, and community operations can also give farming studios a certain degree of service extension.

Regarding the core business—farming, LM said: "For our farming business, we generally divide it into pure internal farming and semi-external business. The pure farming business mainly targets projects that have not yet issued tokens, focusing on high-quality interactions. We do not use scripts for large-scale interactions; instead, we adopt a more manual approach to ensure that each address can receive the corresponding token airdrop. The semi-external business is more aimed at interns and university students, depending on their interests. For example, some may like technical aspects and study related node setups, while others who want to purely farm are provided with relevant farming information for mutual exchange."

In response to a follow-up question about the issues that script-based interaction methods might cause, LM said: "We do not use script-based farming mainly because most scripts are unstable, especially when it comes to related transactions. Script bots are prone to errors; although it is a low-probability event, if it happens once, it can lead to irreparable losses. For example, in NFT platform transactions, scripts can easily sell high-priced NFTs at very low prices. Additionally, while script-based farming is suitable for cost-free testnet interactions, it can easily lead to uniformity, causing project parties to restrict most of the script-based orders in their anti-witch rules."

When discussing the daily tools and account maintenance of farming studios, LM said: "Actually, they are not much different from the tools everyone uses daily, such as fingerprint browsers, or using AI tools like ChatGPT to improve work efficiency. As for community account maintenance, it's crucial not to log in to multiple accounts from the same IP or have multiple people log into the same account, as this can prevent the official recognition of accounts as bot accounts."

When asked whether the farming studio accepts client commissions, LM replied: "We do receive such orders, but we take on relatively few because the profits are not high, and we don't have a large number of accounts to serve them. However, other studios do engage in related businesses, such as the Starknet airdrop, where a well-known KOL reportedly ran away with 20 million tokens, worth over a hundred million."

According to LM, his studio's business is more diverse; in addition to farming, it also engages in KOL development and community operations, indicating that the business of farming studios is gradually shifting from a singular focus on farming to a more diversified development.

The Competitive and Cooperative Relationship Between Farming Studios and Project Parties

In this interview, the author focused more on exploring the relationship between farming studios and project parties with LM, hoping to uncover whether there are any interests related to the transfer of benefits between the two. The author is grateful for LM's candid responses, which reveal the relationship between project parties and farming studios.

Project Parties' Behind-the-Scenes Operations: Airdrops No Longer Become Survivorship Bias

When discussing the relationship between project parties and farming studios, LM vividly compared it to product brushing on the Web2 Taobao platform: "I believe that farming studios and project parties are more like product brushing on Taobao. Merchants, in order to rank their products higher in search results, list relevant incentives on brushing platforms to attract brushing personnel. This is a means of attracting users at the data level."

However, while Taobao brushing involves merchants actively seeking relevant personnel to operate, the author then asked whether Web3 project parties also actively seek out farming studios for airdrop interactions, and what returns this could bring to farming studios. LM replied: "This really depends on the size of the project. Large projects generally do not actively seek farming studios for interactions because they do not lack traffic; everyone is farming. On the other hand, smaller projects need the cooperation of farming studios because only with good data can they potentially get listed on exchanges. Generally, these project parties do not provide actual incentives to farming studios, but they will inform us of the anti-witch rules in advance. With the anti-witch rules, we essentially already have guaranteed token rewards."

When asked about the details of cooperation between project parties and farming studios, LM said: "Farming generally falls into two categories: one with costs and the other without. Generally, when project parties find us, it is mostly the latter. Among the no-cost projects, smaller projects tend to reach out to farming studios more often, allowing us to brush airdrops by knowing the anti-witch rules in advance. Project parties want good-looking testnet data to enhance their visibility. As for large projects, they rarely reach out to us; more often, we seek them out to obtain anti-witch rules. However, some well-known projects, when listing on prominent exchanges, may also commission large farming studios to help boost their trading volume."

When asked about the rumors circulating in the market regarding project parties collaborating with farming studios to return project tokens, LM said: "Currently, my studio has not received any related business, but some peers have received similar business. This gameplay essentially relates to the exit mechanism of project parties. Since most project parties' reserved tokens require a certain release period, and the listing rules of relevant exchanges also clearly state that teams cannot 'dump' to avoid negative impacts, at this time, it may be exchanges or market makers helping to sell."

"Another scenario is that project parties focus on airdrops because they are the ones who set the airdrop rules. If they include a portion of their own addresses in the rule-making process, this is a very easy and normal phenomenon. Moreover, it is not necessary to collaborate with farming studios; project parties can meet these requirements themselves, such as in terms of TVL ranges, interaction times, address balances, interaction counts, etc. GameFi projects are even easier to operate, such as level restrictions and login times. For project parties, as long as they categorize active users into the airdrop standard range and isolate those who farm, it is beneficial for the project's subsequent development. This way, they can gain profits while ensuring that core users are not lost, and most project parties are likely to adopt this approach."

Project Parties' Anti-Witch Rules May Be a Self-Promotion Tactic to Showcase "Clean" Data

Previously, LayerZero's anti-witch rules seemed to create an adversarial relationship between farming studios and commissioned clients, where reporting could lead to obtaining more tokens. How do you and your peers view this matter?

LM did not answer directly but instead introduced the project parties' needs from their perspective. He categorized the funding sources of project clients into three structures:

• Top-tier funding: about 10% of total funding. This portion is contributed by a small number of large investors, whose funds often exceed the total of the remaining 90%. For example, one person might invest 100 bitcoins or 1000 ethers.

• Mid-tier funding: about 30% of total funding. This funding comes from medium-sized investors, who are usually the core users of the project. For instance, a user might stake between 0.1 to 2.2 bitcoins.

• Bottom-tier funding: This funding comes from a large number of small investors, each of whom might only invest 0.0001 bitcoins.

For project parties, how to handle these different levels of investors is a key issue. They can choose whether to absorb all investors or only a certain number. This is a strategic choice they need to make.

Generally, a project party hopes to attract as much funding as possible to enhance the overall strength and risk resistance of the project. This means they need to design mechanisms that can attract different levels of investors and ensure these mechanisms operate effectively for the long-term healthy development of the project.

In summary, LM analyzed: "LayerZero's anti-witch measures are more of a marketing tactic, showcasing that there are no studios involved, and all users are real."

It must be said that LM's analysis is quite reasonable to a certain extent; even if studios can report commissioned clients, such instances are relatively rare compared to the number of studios that "self-farm."

At the same time, LM does not believe there is an adversarial relationship between farming studios and project parties. He stated: "The emergence of farming studios provides these projects with effective real user data. As mentioned earlier, this phenomenon is very common in the Web2 era, such as brushing volume, transactions, and ad plays on Taobao. There is a saying in the advertising industry: 'You never know which 70% of the money you spend is wasted, but you never know which 70% it is.' Therefore, we can view farming as a promotional reward given by project parties to users. Every project needs such promotional rewards, and currently, this is the optimal solution. This is not just a phenomenon in our industry; it is the same in other industries."

"I believe that farming is a long-term sustainable business. Each farming studio brings hundreds of effective users. As long as they participate in projects according to the rules, it cannot simply be regarded as farming behavior but rather as providing user data for the project."

"Secondly, regarding the initial liquidity release methods for projects, the highest priority goes to super top-tier capital (like a16z), followed by new mining or related Launchpool from large exchanges. After that comes the allocation for effective users, and finally, the release for small capital investments. For project parties, distributing tokens to users not only helps with publicity but also achieves high ROI. Therefore, farming studios can continue to thrive because project parties continuously launch new projects, and each project needs these users."

"Finally, a predecessor in the farming business once said, 'Farming is actually a 1.5-level market between the primary and secondary markets,' meaning that farming behavior does not require communication with the project; as long as a project needs to issue tokens, there will inevitably be rules for token generation. As long as farmers grasp these rules, large-scale farming activities will occur, and even exchanges will open pre-market trading for such groups."

LM's stance is expressed from the perspective of farming studios. From a commercial operational logic standpoint, the cooperation between project parties and farming studios is a reasonable business behavior. Project parties set the rules, and farming studios participate within those rules, both satisfying their own interests while cooperating with each other. However, from the perspective of ordinary users, the cooperation between the two undermines the expected scenario brought about by previous airdrops. Ultimately, Web3 is also a commercial activity, and where there are interests, there will inevitably be a "rivalry."