How are these residential proxies made?

We have several types of proxies such as datacenter and residential proxies.

For datacenter proxies, it is clear how they work. they buy a vps, server and a block of ips, then install proxy on them.

But how does this work for residential proxies? Some sellers claim huge numbers like 10m rotating res proxies.
though they exaggerate about numbers of proxies like 10m , 20m....
But I can only think of two possibilities :

1. A botnet infected residential devices and turned them into proxies.
2. They are actually datacenter proxies, but the IPs are registered under ISP names or residential looking ASNs.

What do you think?

there’s a third big route too: opt-in apps/SDKs and bandwidth-sharing networks where real users agree to let traffic pass through their connection. plus plenty of “providers” are just reselling the same upstream pool under different branding.

Proxellor said:

there’s a third big route too: opt-in apps/SDKs and bandwidth-sharing networks where real users agree to let traffic pass through their connection. plus plenty of “providers” are just reselling the same upstream pool under different branding.

Click to expand...

"opt-in apps/SDKs and bandwidth-sharing networks" no such a thing exist

Jackreach3r said:

"opt-in apps/SDKs and bandwidth-sharing networks" no such a thing exist

Click to expand...

Yes, they do.

A lot of large residential pools come from SDKs added to free apps, browser extensions or bandwidth sharing apps. Users allow the app to use their connection and their device becomes an exit node while it is online. Some providers also resell traffic from smaller networks, so the same IPs can appear in several pools

Botnets do exist, but that does not mean every residential network is a botnet. The second case is usually sold as ISP proxies. The IPs belong to an ISP, but the servers are hosted in a datacenter and remain static

Also, 10 million IPs usually means IPs seen over a certain period, not 10 million live and exclusive IPs at the same time