Users often need to enter their private keys into trading bots controlled by the crypto-friendly messaging software Telegram before the bots may execute deals on their behalf.
Meme coin dealers seem to be willing to bypass self-custody, a fundamental principle of cryptocurrency, in favor of these bots, as the number of them continues to rise.
Some bots, like Banana Gun, BonkBot, and Maestro, snipe newly launched tokens, while others, like BonkBot, make ape-ing into the next WIF much easier.
Instead of wasting time scouring the multiple decentralized exchanges (DEXs) for the right pool, users can just tell the chatbot what to do, and it will take care of everything on the blockchain. Furthermore, consumers may find solace in the fact that they won’t be “sandwiched” due to their fear of missing out (FOMO) since certain bots claim to shield transactions from market leaders.
Obviously, all of this convenience is not without cost; in fact, some algorithms even vie for revenue with the leading DeFi protocols.
The trading bot market reached a record high of nearly $700 million on March 18, with an average daily volume of $250 million, according to the dashboard of Dune Analytics user Whale Hunter. The top five bots in terms of transaction volume have each transacted between $1 billion and $4.5 billion.
Solana is the de facto center of the transactions, which average at least $1.7 million per day; but, Coinbase’s base is also seeing significant growth in its user base.
However, the ever-present danger of hackers, bugs, and rugs is inherent to every piece of DeFi equipment. Accusations of a rug pull occurred in September due to a flaw in Banana Gun’s token contract, while Unibot and Maestro were both exploited in late October.
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