The article explores the rise of Telegram bots in the field of cryptocurrency trading. They combine transactions with social platforms to provide a convenient cryptocurrency trading experience. Despite challenges such as competition and security, they may bring more innovation and development in the future.
Written by: COMB Financial
Compilation: Huohuo, vernacular blockchain
1. Bluetooth, blueberry and robot
Over 1000 years ago, there lived a Viking king named Harald Bluetooth. He is said to have loved blueberries so much that they left a distinct blue stain on his teeth. The discolored tooth gave him his unique nickname - "Bluetooth".
Just like Harald's legacy of unifying Denmark and Norway, modern Bluetooth technology connects all kinds of electronic devices. To pay homage to this historical similarity, the Bluetooth logo features the Nordic rune HB representing his initials, showing the interconnectedness of past and present.
This spirit of unity is echoed again. Not through technology that connects our devices, but through technology that combines cryptocurrency trading bots with the popular social messaging platform Telegram.
2. Telegram bots are the Bluetooth of 2023.
These bots are specially designed to fit personal trading habits and incorporate the nuances of DEX, which can provide a new trading experience, especially for degens.
From managing your crypto wallets to facilitating transactions on DEXs and sniping newly launched tokens, these bots (or digital butlers) are solving some of the most pressing pain points of trading on DEXs today.
3. So, what exactly is a Telegram (TG) bot?
They're essentially tools on Telegram designed to automate tasks, whether it's cryptocurrency trading or real-time updates on everything from NFT prices to wallet tracking.
Users start by typing commands into the bot's Telegram channel. A menu pops up allowing the user to set up a new crypto wallet or link an existing crypto wallet. Once the wallet is in place, the user can transfer funds to the address provided. Additional menus guide users through various transactions.
Essentially, these bots may serve slightly differently, but they mostly work on the same mechanics.
Following are the various functions offered by TG robots:
1) Transaction: TG robot can quickly purchase Token. Just paste the contract address into the chat and you can buy that token. Real-time updates on your trading performance are just a click away. Bots can also sell cryptocurrencies super fast thanks to the pre-approved trading feature.
2) Set automatic trading parameters: Traders can set specific thresholds, such as stop loss and take profit. Once the crypto token reaches these levels, the bot executes these trades. This hands-free approach means your trading strategies will still work even when you are offline.
3) Follow Smart Money movements: These bots can copy the trades of experienced traders. Here, the bot monitors the "Risk Small, Big Money" (smart money) wallet and provides a one-click copy function.
4) Safety features: A standout feature of many robots is their anti-rug functionality. If a token developer is trying to manipulate the market, these bots can spot an impending trade and sell the position before the developer stops. These bots can also identify malicious transactions that could prevent tokens from being sold.
5) Sniping: TG robots can also automatically purchase Tokens after they are listed or their liquidity increases. Their settings usually match the developer's deal settings, ensuring purchases are made immediately after the developer moves. Even if tokens are not traded after adding liquidity, these bots can automatically send buy orders based on the developer's "method ID". This ID reveals the nature of the developer's transaction with the Token contract, potentially enabling transactions and allowing early buy-in. The bot can also execute transactions across multiple wallets simultaneously to avoid wallet limitations.
4. What is the reason for the sudden outbreak of TG Bots?
The rise of TG Bot is not just a coincidence. As Memecoins find themselves in the spotlight, the crypto Twitter community scours the blockchain for “smart money” wallets that turn small investments into huge returns and replicate transactions. Telegram bot is the perfect tool for this purpose.
You see, Telegram is more than just a messaging app, it's a mix of social engagement and encrypted alpha messaging. However, there are still many manual steps like reading alpha, buying coins, etc. which require more time and effort. Compared to some existing DeFi interfaces, TG Bot offers a leaner and simpler option for token trading, but let’s face it, it can be a bit cumbersome.
Moreover, advocates of these bots insist that they could serve as a gateway for new cryptocurrency users. This is mainly due to its intuitive design which improves ease of use. Telegram currently has over 800 million monthly active users. This is one big playground for cryptocurrency expansion.
Also, most normal people want a "get rich quick" scheme. With countless stories of sudden riches in cryptocurrencies emerging, the focus has shifted from mainstream currencies to Memecoin. It's not just about making a quick buck; it's about ideology. Memecoin is often talked about creating fairness, providing a platform unencumbered by venture capitalism.
In addition to this, its popularity is further enhanced by its popularity on platforms such as Coingecko and DeFiLlama. Coingecko has launched a dedicated section for these Telegram bots, while Coinmarketcap has launched its own Telegram bot called CoinMarketCap PriceBot.
5. TG Bot income source
Subscription-based access: TG Bot operates on a membership model. To access its services, users need to pay a fee, such as 0.1 ETH for a 30-day subscription or 1 ETH for a yearly subscription. This approach is fairly niche and community-focused, and works best for influencers with a large following.
Zero Upfront Fees, Transaction Fees: For every trade, Unibot charges a 1% fee, which is in addition to the usual Uniswap transaction fees. Unibot recycles 40% of this collectible back to its Token holders. This is a win-win for the platform and Token holders.
Hybrid Model: A fusion of the above two, this strategy is the brainchild of Maestro TG Bot. Maestro follows the example of Unibot and charges a 1% transaction fee. However, Maestro has not yet dabbled in token issuance and considers all fees it charges as protocol revenue. It also launched a $200-a-month VIP community service that gives members access to Smart Money addresses.
Token Holding Utility: By holding a specified number of Tokens, users can access TG Bot's trading robots for free.
6. The current pattern of TG robots
The value of the tokens associated with these bots soared, reaching a market capitalization of $258 million. Unibot is the leader in this field, accounting for nearly 73%-75% of the market capitalization and about 84% of the FDV market share. Its token $UNIBOT has risen rapidly, increasing its value 50 times in the last quarter alone.
The user metrics for Telegram bots peaked in July 2023 with more than 6,000 daily unique users. In the second half of July alone, Unibot's daily users jumped from a measly 400 to 1,700. Another bot, Maestro, was one of the first entrants in this space and has a daily loyalty of 2000-3000 users. However, it's not alone at the top.
On July 23, 2023, we see the daily trading volume of the TG robot skyrocket above the $10 million mark. Cumulative transaction volume is not far behind, currently exceeding $230 million.
While the buzz around bot-native tokens remains high, the recent decline in its trading volume seems to reflect a downturn in bot users and overall activity.
Speaking of revenue, Telegram bots have managed to turn user adoption into a lucrative revenue stream. But it's important to realize that not all income generated is strictly related to actual transactions. Take Unibots as an example. It accumulated a total of 4.9K ETH. Interestingly, almost 85%+ of this figure comes from purchase and sale "taxes", rather than traditional trade revenue. This points to alternative ways of generating income for these projects.
7. Risk
The TG Bot prospect is still in its formative stages, and its value in the hundreds of millions of dollars is only scratching the surface.
It's not all sunshine and rainbows, however. Developers and project teams are under constant pressure to innovate and roll out new features. Furthermore, as new players enter the TG Bot space, there is a looming threat of a competitive price war, especially when it comes to transaction fees.
Security remains a core concern for users. How to ensure wallet security and Token security? Entrusting a wallet to a certain platform or creating a new one brings with it the fear of private key leaks. This inherent risk limits the amount of funds users are willing to deposit on the platform.
There are also issues with new Token contracts and models. Take Pauly's PNDX from an NFT marketplace not Larva Labs. The contract is inherently flawed. Sadly, TG Bot’s radar missed these pitfalls, causing a domino effect, causing users to withdraw from liquidity.
8. Future prospects
The main focus of these bots so far has been trading functionality. However, we may soon see the evolution of bots, moving from trading functions to new applications and even aggregating various functions.
Not limited to Telegram, some bots are now popping up on platforms like Discord, expanding their reach and giving users more transaction options. Additionally, some bots now offer multi-chain functionality, making cross-chain transactions possible.
While it’s not cheap to use a Telegram bot right now, that might change. As competition intensifies and services start to look more and more similar, affordability may become the new battleground.
Additionally, for long-term sustainability, the project must find a way for users to easily switch between using Telegram for regular chats and transactions.
In short, while this trend is clearly exciting, the current boom may reflect surging token prices rather than genuine demand. But there's no question the arena is boiling. As the number of robots continues to increase, we are bound to witness more innovations.
