NFT project "Bored Doge Club"

NFT project “Bored Doge Club”, the Game Theory played with Bots

“Bored Doge Club” is a legal, mid-run NFT project. In February, the founders opened the first sale of bored dogs’ digital images, called “Bored Doge”.

Bored Doge Club offered to sell these illustrations (each can be bought as a unique NFT) in a collection created by a team of artists. Their value relies mainly on potential pay-offs imagined by the users (or presented to them), as explained in economic Game Theory. Yet, bots (automated software which executes predetermined tasks, operating much faster than human users) influenced the interactions in several ways.

Bored Doge Club, an investigation on bots and their phantom

Bots and their phantom

The NFT market

The creation of the artworks is only part of an NFT project. The founders of Bored Doge Club needed to open a website, set the social media profiles and promote the collection on a marketplace for sale.

The sale represents a central part of every project of this type. NFTs are today mostly speculative assets thanks to the explosion in market activity. Gains were enormous in the last year, so investors try to discover projects that could be interesting and remunerative. According to the website CoinTelegraph, in the last week of March, total NFTs’ sales volume “rallied to $20 billion“.

Creating a project can be profitable. According to the website nftexplained.info, “creators of NFT projects can receive a large sum of money. For example, if a creator sold an NFT line of 10,000 NFTs at 0.08 ETH [unit of the cryptocurrency Ethereum] or roughly $300, the creator would quickly receive $3,000,000.”

Bored Doge Club history

Bored Doge Club was firstly promoted in January, but the first NFTs’ “minting” backed to the 23rd of February. Nftexplained.info summarised that the minting “can be thought of as purchasing a limited item directly from the seller”. The date of the minting is commonly the moment of the first sale.

The creators usually set the mint price. Furthermore, they propose free NFTs to some users through giveaways or contests and create lists of members with manifold privileges. So happened to the Bored Doge Club.

The channels of Bored Doge Club are still active. The project has evolved from the promotion until now, passing through advertisements, messages, and sales. Investigating the history could explain why it was so promising from the beginning.

Bored Doge, the success and the media

Nyweekly article

The project “Bored Doge Club” was launched in January 2022. After a few weeks, some media articles publicised the idea.

On the 31st of January, the website nyweekly.com wrote that Bored Doge “takes inspiration from the exceptional success story of Dogecoin“. Dogecoin was “a cryptocurrency created intially to poke fun at the wild speculations in the industry”. After Elon Musk and other personalities started to endorse Dogecoin, its prices shot up.

The creators of Bored Doge Club explained: “DogeCoin is the people’s cryptocurrency, and we’re the people’s people. We aren’t champions. We aren’t heroes. Hell, we aren’t good at anything. We’re just bored, and we’ve got nothing to lose”.

A Community

Bored Doge Club aims to create a community of people who have the same attitude toward life, such as what happened with DogeCoin.

On the 1st of February, the website lawire.com explained that “at the core of Bored Doge is its desire to make everyone feel accepted and represented”, and the like-minded people “can recognise themselves in Bored Doge with his bored look”. Additionally, “the developers want to unite Dogecoin aficionados together around their art,” the article stated.

On the 1st of February, the website nywire.com compared the community created with Dogecoin to the one pushed with “Bored Doge Club”: “For the makers of the Bored Doge Club, Dogecoin is not just another cryptocurrency to hold. Instead, it is a long-term investment that should be purchased and held onto”.

According to this article, the prospected gains investing in Bored Doge Club were high already in February. “Dogecoin is still currently on the top of the meme coin rank in popularity and market capitalisation. As its popularity continues to skyrocket, more investors are getting more interested in doge-related crypto and NFT project. With this, Bored Doge Club holds the incredible opportunity to expand and grow more in the next coming months”.

Social Media, the problem of bots

The growth potential looked high because of the broad community. Nyweekly reported in the 31st January article that “because of its culture, the Bored Doge Club has amassed a considerable following on Instagram of over 40,000 followers. Even more impressively, it reached more than 150,000 members on its dedicated Discord “server” [spaces in the application Discord are called “server”] just four days from when it was launched”.

What is Discord?

Discord Logo

Discord is an instant messaging platform. Users can communicate in private chats or as part of groups. Discord often had problems with hostile behaviours and abuses within conversations. They closed several channels in the past because they connected with various crimes.

The application Discord is highly used for sending announcements, news, and information within NFTs’ projects. In November, Jason Citron, who founded and leads the company, prospected even the possibility of integrating NFTs and cryptocurrency wallets into the platform directly. After worrying reactions, Citron tweeted: “We have no current plans to ship this internal concept. For now, we’re focused on protecting users from spam, scams and fraud”.

The announcements on Discord

Bored Doge Club has its discord “server” with several rooms: “bored-news”, “official-links”, and “announcements” (among others).

The first message in the “announcements” room dates back to the 19th of January. The creators presented the project as run by a team of artists working with “top tier engineers”, “multi-million net-worth entrepreneurs”, and “200iq marketing professionals”. The initial number of NFTs to be “minted” within the collection was 8,989.

On the 22nd of January, they announced that 80 thousand users joined the channel in less than 30 hours.

The issues of bots in Discord

On the 24th of January, the project’s founders informed that the members had already become 134 thousand. Communicating whit this number of users isn’t easily manageable.

Indeed, a SCAM DISCLAIMER specified: “We will never contact you via DM [Direct Message]. And when the site is live, ONLY trust REAL links from the official channel”.

A CUSTOM DISCORD BOT

On the same day (the 24th of January), the founders told the chat members that there were “multiple spots up for grabs” in a dedicated list (with privileges). The user should have created “video, picture, text or music content for the Bored Doge Club” and shared it on social media platforms to get one spot and keep it.

“We don’t just open our doors to anyone”, they specified. They added a rule: “Inactivity will lose your spot”. It’s because “sometimes the wrong person gets in. They make the list, and their activity drops”.

The founders relied on a Custom Discord Bot (a computer program) to check the users’ activities and enforce the rule. “If your activity drops, the bot will let us know, and we’ll take action”, the creators’ message warned.

A MALICIOUS BOT

All seemed straightforward, but a few days later, an announcement regarding another bot disclosed sad news. On the 30th of January, the creators said that “during the general Discord bug [a flaw of the system], a malicious bot installed on our channel and banned 12,000+ active Dogers”.

They specified that they could delete the bot, which would “not be able to ban anyone” anymore. Unfortunately, the situation was “irreversible”, and these “loyal Dogers” would have been “banned for life”.

The founders defined the bot as “malicious” because, according to them, there was a deliberate attempt to damage the project. On the 1st of February, the creators said: “Someone tried to ban real Dogers, to reduce this community to nothing and to take away our strength, but we are too strong. WE ARE SAFE NOW”.

Social Blade, the suspicious traffic on Instagram

Instagram Account @boreddogeclub

“Reducing the community” is a worry of the Bored Doge Club creators. Indeed, in the mentioned media articles, the number of members on the Discord server and the followers on Instagram were used as a thermometer for the project’s future development.

A malicious bot allegedly reduced the community members of Discord by over 12,000 units. What about Instagram? Something similar happened with the followers on this other social media platform?

As of the 26th of April, the Instagram account @boreddogeclub counted 43,144 followers. Still a lot, despite the NFTs’ minting dates back to February. Looking at the historical data, we add some information.

Instagram followers’ data

SocialBlade.com is a website tracking social media profiles’ analytics. If you select the social media platform and write down the account’s name, the website returns the historical data of creation, followers, and changes regarding the profile queried.

Bored Doge Club’s profile had more than 50 thousand followers at the end of February. It could be not so surprising considering the high number (almost doubled) of the members of Discord server.

Still, the followers fell oddly. On the 12th of March, the number of followers decreased by 750. The following day, the 13th of March, it got down by 1,818 followers. On the 14th of March, the profile loosed other 538 followers. In three days, it dropped from 51,938 to 48,832.

The balance of followers kept almost the same until the 27th of March. On that day, the number of followers was 1,439 less than the previous day. The following day, on the 28th of March, they decreased by 3,348. On the 29th of March, the number of followers went down by 350 units. In three days, it sank from 48,658 to 43,521.

Social Blade Graph on @boreddogeclub

This traffic is at least suspicious. It isn’t easy to imagine thousands of users unfollowing the same profile in a few days without a triggering event. The same behaviour was repeated twice.

THE BOTS ON INSTAGRAM

There could be several explications concerning bots. Indeed, the bots pervade Instagram and alter the social media statistics.

For instance, the “Follower bots” are automated software that finds Instagram accounts using particular keywords in their profiles and automatically follows them, mainly for advertising reasons.

#NFT is a keyword viral within these bots because the marketing in the field is tremendous. These bots could follow an account until the people managing them judge it’s useless. All of the profiles connected to similar bots could have unfollowed @boreddogeclub at the same time.

In addition, some software allows people to buy followers on Instagram. There are plenty of services on the internet: you can buy 1,000 followers for as little as $10. Many of those followers are bots or inactive accounts, which means they never engage with the posts.

All these methods of altering the data are entirely legal.

The community decides the NFTs’ supply

Whatever the reality, the community’s number of members and followers is fundamental to giving a semblance of solidity to the project. Not only. Even creators of Bored Doge interviewed their community on market matters.

On the 23rd of February (the date of the minting), the founders sent a communication on Discord: “To make it fair for the community, we decided to reduce the supply to 2000 bored doge (to mint) to make sure HOLDERS are getting more value!”. The NFT on sale should decrease from a rough 8,000 to 2,000 because the price of each one of them should have risen with fewer tokens.

But this decision was not easy to take. So, the Bored Doge Club managers decided to open a survey within the community to vote on it. The reactions to the statement made the vote: the fire icon means voting to “burn the supply” (expression in NFT jargon), and the thick icon means voting to keep the collection unchanged. One may wonder whether the reactions in a Discord survey could be actual votes or consequences of bot activities.

On the 24th of February, the Discord channel announced: “The community has voted, so we are not burning the SUPPLY”. Yet, on the 28th of February, the decision changed: “The majority of the Holders decided to burn the supply. The SUPPLY HAS BEEN BURNT to 2000 NFT (only 24 NFT left for Sold out)”.

The results on the market

The NFTs’ market value could have suffered from this resolution. Having a look at the sales data could show the price fluctuations.

OpenSea, who owns the NFTs

OpenSea Frontpage

Bored Doge NFTs were promoted and sold on OpenSea, the world’s largest NFT market. Everyone who has a profile on this platform could buy, sell, and list the NFTs within it.

To create a profile on OpenSea, you need to open a crypto wallet and connect it to the NFT marketplace. OpenSea allows us to see the NFTs owned by a particular user and their activities: past transfers, collections held, bids, and sales.

The account named “GasBoyClub“, joined OpenSea in February (address: 0x9fb2418abb00124e4d2c677c3366e9d3e321d185), owns 28 Bored Doge NFTs, as of the 27th of April. On the platform OpenSea, the account bought the most expensive of them on the 6th of March at 0.019 Ethereum (worth around $54) and now he listed them at up to 700 Ethereum (worth around $2 million).

Blockchain explorer, the trails of money movements

Other users own a lot of Bored Doge NFTs.

An account HOLDING 22 Bored Doge Club NFTs

An unnamed account joined in February (address: 0x4DCdDAac6D15e7476899ce759400CB2DCecE678b) owns 22 Bored Doge NFTs, as of the 27th of April. On the platform OpenSea, on the 23rd of February, the account bought the most expensive at 0.1 Ethereum (worth around $280). They haven’t been listed for sale.

We can add some information analysing the money transfers related to the address.

“Blockchain explorer” is a transaction search engine which shows all the movements from or to a wallet stored in a determined blockchain.

According to Blockchain explorer, this account received the funds to buy the items from two addresses: the first connected to the Binance exchange, transfer dated 18th of February (address: 0x21a31ee1afc51d94c2efccaa2092ad1028285549); the second connected to the FTX exchange, transfer dated 23rd of February (address: 0xc098b2a3aa256d2140208c3de6543aaef5cd3a94).

The exchanges are marketplaces where you can buy and sell cryptocurrencies with fiat currency or send funds to a crypto-wallet, like in this case.

This (just created) account received the funds in the proximity of the Bored Doge Club’s minting date.

An account HOLDING 75 Bored Doge Club NFTs

Another unnamed account joined in February (address: 0x57548bD86ffb745bBe0076A23Fc0d71C586adD66) owns 75 Bored Doge NFTs, as of the 27th of April. On the platform OpenSea, the account bought the most expensive of them on the 23rd of February at 0.125 Ethereum (worth around $360). They haven’t been listed for sale.

According to “Blockchain explorer”, the account received the money to buy the items from two addresses: the first connected to the FTX exchange, transfer dated the 22nd of February (address: 0xc098b2a3aa256d2140208c3de6543aaef5cd3a94); the second connected to the Binance exchange, transfer dated the 23rd of February (address: 0x4976a4a02f38326660d17bf34b431dc6e2eb2327).

In the latter two cases, the funding of the OpenSea accounts seems to be strictly related to the project Bored Doge Club. The most expensive purchases for these NFTs, executed from these two accounts, dated the 23rd of February (the day of the minting). The prices paid for an NFT of the Bored Doge Club collection were around 0.1 Ethereum.

On the 29th of April, the “floor price” (the lowest price for collection items) for an NFT of this collection is 0.002 Ethereum (worth $5), which is considerably lower.

The bets on NFT

INVESTORS BUYIN

The mutual bets on NFTs

NFTs’ value changes over time based on many factors. The price depends significantly on the behaviour of other users: at what price they sell, at what price they are willing to buy.

The promoters of the Bored Doge Club NFT project know it. On the 20th of April, they wrote on their Discord announcement room: “We need you all to stay calm and not spread FUD [acronym for Fear, Uncertainty and Doubt] in the rooms, Guys. Investors are around, and when they see those negative messages, they do not really want to invest in the project”.

The expected gains are fundamental to determining shopping behaviour. For the investors, buying at a low price and waiting to sell for a higher price is the best way to increase the money. The buyers’ willingness clashes with the desires of NFT projects’ creators. The latter want to sell their artwork at the maximum possible sum.

The Bot War

The fluctuations of the prices could also be influenced by external activities, which are not always transparent. Bots can manipulate prices in many ways.

According to the company “PerimeterX“, bots are used for

1) Driving NFT prices down: “bots place bids below the asking price on many NFTs. If a bid is accepted, the bot cancels. This drives the value of the NFT down”;

2) Driving NFT prices up: “Investors raise NFT prices by using bots to “sweep the floor,” i.e., purchase all NFTs at the lowest price. This artificially raises the popularity and resale value of the NFT”;

3) Fake bidding: “Often, the sellers themselves place fake bids on their own NFTs to create artificial trends. High bids can make prices look really high when they’re really not”.

Managers of NFT projects can react to these manipulations. On the day of the minting, the 23rd of February, NFT Bored Doge Club founders state in a Discord announcement: “We’ve battled Bots making low offers to lower the floor. But after today’s War, will come chill and profit days”.

The war is waged with bids, purchases, and software.

“Using bots to buy NFTs isn’t a crime. However, using bots to manipulate NFT sales negatively affects user retention”, wrote Tony Klor and Dakin Levit from PerimeterX in a January 2022 article.

The only bogeyman of these automated programs ends up conditioning the market. Fighting against malicious bots is an urging challenge also for NFT projects’ creators.