Show HN: How the IP Leasing Market Fakes Legitimacy
by xunairah | 2026-03-07 09:47:00+00:00
A viral post exposed how datacenter IPs are disguised as residential connections. As a proxy provider, here is the technical reality of how it works—and why we refuse to play that game.

This week, an article titled "The shady world of IP leasing" made the rounds on Hacker News and tech Twitter. It argued that IPv4 exhaustion is a myth caused by hoarding, and that the "Residential Proxy" market is largely built on a house of cards—specifically, datacenter blocks that have been scrubbed, subleased, and manipulated to look like home internet connections.

They are absolutely right.

At Proxyon, we see this every single day. Competitors offer "70 Million Residential IPs" that are actually just hoarded datacenter blocks with a fake mustache.
Here is the technical breakdown of how the "Leasing Laundromat" works, and why we decided to build our infrastructure differently.
The "Geofeed" Loophole (RFC 8805)
The article touched on this, but didn't go deep enough into how easy it is to fake a location.
The internet relies on trust. When you buy a block of IPs from a broker (like LogicWeb or IPXO), you control the narrative. The "magic trick" used by shady proxy providers is RFC 8805.
This allows an IP holder to publish a simple CSV file (a Geofeed) telling the world where those IPs are located.
Reality: The server is in a datacenter in Kansas.
The CSV: 192.0.2.0/24, US, US-NY, New York
The Result: MaxMind, Google, and Cloudflare scrape that CSV and update their databases.
Suddenly, a cheap datacenter IP is sold to you as a "Premium New York Residential Proxy." It costs the provider pennies, but they sell it to you at residential markups.
The "Clean Slate" Business
The most disturbing part of the leasing economy is 'Reputation Laundering'

If a subnet gets burned by spam or fraud, it should be dead. That is the immune system of the internet working. But in the leasing market, you can pay a "cleaning fee." Providers will actively petition Spamhaus, Barracuda, and SORBS to delist the IPs, claiming the "issue is resolved," only to lease them to the next bot farm five minutes later.
This artificially keeps "zombie" IPs in circulation, degrading the trust of the entire network.
How we made it Different (The Hard Way)
When we built Proxyon, we had a choice. We could go to these massive leasing marketplaces, rent 10,000 IPs for cheap, fake the geodata, and sell them as "Premium Residential."
We didn't.
We realized that "Privacy" and "Deception" are not the same thing. You come to us for privacy (No KYC), not to be lied to about what you are buying.
-We Don't Fake Residential
If you buy a Residential IP from us, it comes from a legitimate peer or ISP partnership, not a mislabeled datacenter block. We don't use Geofeed manipulation to pretend a server rack is a suburban house.
-We Don't "Launder" IPs
We don't pay bribes to get off blacklists. If an IP in our pool is flagged, we rotate it out and let it cool down naturally. We maintain pool health by enforcing strict ethical usage policies, not by paying "cleaning fees" to cover up abuse.
-True "Pay-As-You-Go" (Anti-Hoarding)
The article correctly identifies that hoarding is the cause of IPv4 exhaustion. Large providers force you into monthly subscriptions where you buy bandwidth you don't use. That is artificial scarcity.
We operate on a non-expiring model. You buy the data, you keep it until you use it. We don't hoard bandwidth or IPs that aren't being utilized.

The "Shady World of IP Leasing" isn't going away. As long as RIRs (like ARIN and RIPE) lack the teeth to enforce usage policies, the gray market will thrive.
But as a user, you have a choice. You can buy from the "70 Million IP" giants who are leasing laundered space, or you can buy from providers who are transparent about their sourcing.
We might be smaller than the giants. But our IPs are real.