Written by: @ChingChaLong02

Mentors: @ZouBlock, @Erjiueth_

Since the emergence of Telegram trading bots, the threshold for trading has been greatly reduced, and it is now easy to conduct on-chain trading on mobile phones. Telegram trading bots, as a presence similar to on-chain brokers, have driven the strong rise in the token prices of multiple projects, leading a wave of enthusiasm for Telegram bots. This series of articles will deeply analyze the Telegram Bot track, divided into two parts, with the first part summarizing the overview of the track and the second part outlining the targets.

1. Track Overview

Since the emergence of Telegram trading bots, we have witnessed the strong rise in token prices of multiple projects. In particular, Unibot, since July 2023, has rapidly climbed in price. According to CoinGecko's data, Unibot's token price rose from a low of $3.13 in May to a high of $200.45 in August, nearly a 100-fold increase, leading a wave of enthusiasm for Telegram bots.

However, as the popularity of Unibot gradually waned, Banana Gun emerged. After announcing an airdrop in September, its token price rose from around $9 to a high of $18. Although its upward momentum is not as strong as Unibot's, Banana Gun still maintained a certain level of enthusiasm for the Telegram trading bot ecosystem.

An emerging force worth noting is BonkBot based on the Solana chain, with a peak daily active user count of about 35,700, surpassing mature projects such as Banana Gun and Maestro, and particularly outstanding compared to the performance in the decentralized exchange (DEX) field. In the DEX competition, BonkBot's 7-day average daily user count is second only to Sushiswap, leading ahead of seasoned projects such as Maverick Protocol and Trader Joe. This wave of enthusiasm undoubtedly benefits from the recent popularity of the Solana ecosystem, coupled with users' enthusiastic trading of meme coins on Solana, further driving the trading activity of BonkBot.

As for BTCBot.pro, as a Telegram Bot in the BTC ecosystem, it has been online for nearly a month. Due to the unique nature of the BTC ecosystem, BTCBot.pro also provides users with functionalities different from those on the ETH and Solana chains, which are worth studying.

Looking at the Telegram trading bot field as a whole, it is clearly not a flash in the pan. However, the landscape of this field is constantly changing. This article aims to outline the current macro situation of Telegram trading bots and highlight some projects worth paying attention to.

According to data analysis, since BonkBot went online, it has already surpassed other trading bots in terms of trading frequency and user count in the market. Particularly in terms of trading frequency, BonkBot's performance is significantly higher than that of Banana Gun and Maestro Bot, with its trading frequency being approximately 10 times that of the latter two. This outstanding achievement is attributed to BonkBot's efficient design on the Solana chain, known for its high TPS, which can support more frequent transaction processing. Meanwhile, with the recent rise of meme coins in the Solana ecosystem, BonkBot has solidified its dominant position in the Telegram trading bot market.

Taking a cue from BonkBot's success, a similar simulated trading bot, Sol Trading Bot, has also gone online on Solana, and in terms of trading volume, it has already caught up with projects such as Banana Gun and Maestro Bot, even surpassing them in terms of trading frequency and daily users.

As for Unibot, existing data indicates that its market advantage has weakened. Nevertheless, it is worth noting that the project has begun to deploy on the Solana chain, which has slightly influenced its trading volume trend. Clearly, projects using Solana as infrastructure may be the key to initiating the next wave of enthusiasm for Telegram trading bots.

Although Solana Bot has performed exceptionally, the strong performance of Banana Gun before the rise of Solana enthusiasm should not be overlooked, as it closely follows BonkBot in several key indicators.

2. Historical Evolution

With the vigorous development of the cryptocurrency industry, Telegram Bots, as intelligent trading tools, have gained increasing attention in the cryptocurrency community. As early as 2017, Telegram Bots already had the functionality to automatically reply to messages and execute user commands. With the rise of the cryptocurrency industry, Telegram became the most commonly used instant messaging tool for cryptocurrency enthusiasts. In such a context, Telegram-based trading bots gradually emerged, capable of automating token exchanges, copy trading, data analysis, automated airdrop trading, and cross-chain asset operations.

3. Market Landscape

Telegram trading bots, as automated systems within Telegram, assist users in executing trades on decentralized exchanges. Users interact with these bots through the messaging interface of the application.

Different Telegram trading bots provide unique functionalities, but most of them have common trading features, including stop-loss and take-profit orders, copy trading, and multi-wallet support.

These bots replace the user interface (UI) and user experience (UX) of Web3 wallets and DEX, simplifying the originally complex process of decentralized crypto trading.

These bots use advanced algorithms and infrastructure for fast trading, often referred to as "Uniswap snipers," meeting users' needs for trading efficiency and convenience. While all these bots share the common trait of fast trading, they differ in specific functionalities. For example, UniBot offers features like limit orders and mirror sniping, SwipeBot focuses on usability, and OxSniper has features such as anti-MEV protection. The following are the main uses of trading bots:

• Token Trading: Trading bots integrated with the Telegram platform allow users to easily obtain tokens by copying and pasting contract addresses into the message box. Some bots provide real-time updates on profit and loss during trading and expedite token sales by enabling pre-approved transactions.

• Setting Take-Profit and Stop-Loss Orders: Users can use these Telegram trading bots to set stop-loss and take-profit orders, allowing for automatic execution of trades based on preset parameters. This feature is particularly useful for trading new tokens that have not yet been listed on centralized exchanges, but come with higher risks.

• Rug Pull and MEV Protection Monitoring: Some Telegram trading bots have rug pull and MEV protection features. The rug pull feature can identify impending mempool transactions if token developers plan to rug pull and quickly execute a sell order to prevent rug pull scams. The MEV protection feature guides purchase transactions through private relays to ensure purchases are not broadcasted in the mempool, preventing MEV or sandwich attacks.

  Additionally, trading bots can detect impending malicious transactions by developers. If such transactions prevent the sale of tokens, the token will be considered a rug pull. The bot will quickly close the position to avoid falling into the scam.

• Copy Trading: Users can automatically copy trades from specific wallet addresses through specific Telegram bots. These bots act as a bridge between the user's account and the selected trader, executing trades based on the signals of the copied trader. However, it's important to note that copy trading comes with liquidity risks, as insufficient market liquidity can make trades difficult to execute, thereby increasing trading costs.

• Sniping: Some trading bots can perform liquidity sniping, method sniping, and multi-wallet sniping. Liquidity sniping is an automatic buy operation executed when the bot detects an increase in liquidity. Method sniping involves automatic buying based on the "method ID" of pending transactions by developers. Users can also use multiple wallets for sniping through Telegram trading bots.

Traders can use bots to create automated tasks to achieve airdrop targets. Bots for airdrop mining typically operate across multiple chains, identifying promising airdrop opportunities. However, caution should be exercised when participating in unverified airdrops to prevent scams and fraudulent activities.

4. Technical Implementation Path

Telegram bot functionality has existed for several years, but there is currently a strong interest in integrating Telegram bots with Web3 technologies such as blockchain and smart contracts. Unibot is one of the leading platforms for developing Web3 Telegram bots, providing a set of tools and services to help developers create, manage, and organize bots that can interact with decentralized applications and blockchain networks.

With the rise of decentralized finance and non-fungible tokens, the Web3 Telegram bot ecosystem has become even more vibrant. These bots can be used for various purposes, such as automated trading, asset tracking and management, social functions, and more. By using the Telegram bot API and Web3 technologies, these bots can integrate with blockchain networks and other Web3 applications, providing users with more flexible and powerful functionalities.

The Telegram bot ecosystem is primarily built on the Telegram bot API, which is a set of HTTP-based API endpoints that allow developers to interact with the Telegram system programmatically.

The Telegram Bot API is language-agnostic, meaning it can be used with any programming language that can make HTTP requests. Commonly used languages for creating Telegram bots include Python, JavaScript (Node.js), and PHP, among others.

Source: Medium @Srikari Rallabandi

Telegram bots are essentially programs that interact with the Telegram system using the Telegram bot API. They can be programmed to respond to messages, commands, and inline requests. To create a bot, you need to register in the Telegram system, which will provide you with a unique token. This token is used to verify the bot's identity within the system and to send requests to the bot API.

In terms of infrastructure, bots run on servers rather than on users' devices. This means they are always online and can respond to user messages instantly. Servers can be cloud-based or local machines, depending on the developer's preference.

5. Growth Drivers

5.1 Popularization of Cryptocurrency Trading

Cryptocurrency trading is often seen as having a universal problem: a high barrier to trading knowledge, making it difficult to popularize trading. Compared to stock trading, cryptocurrency trading requires more basic setup, such as creating wallets and completing KYC procedures, posing a barrier for the general public to invest in cryptocurrencies. Additionally, even when using centralized exchanges, the user interface is relatively complex, compared to the simplicity of Telegram bots.

Since the emergence of Unibot, projects have aimed to simplify the trading process, focusing on streamlining trading operations to the maximum extent, with all interactions being done through conversations with the bot, and providing fast Uniswap sniper capabilities for quick trading and precise sniping. The convenience of Unibot lies in the fact that users can trade anytime, anywhere through Telegram without relying on other trading platforms. This greatly contributes to the long-term popularization of cryptocurrency trading.

Recently, there has been a significant increase in trading volume through Telegram bots, validating the market's demand for this type of trading method. Especially for tokens with insufficient liquidity or those not yet listed on exchanges, Telegram bots have significantly increased their exposure. This also provides traders with more investment choices, creating a win-win situation.

5.2 Telegram as a Platform

As one of the world's most popular social networking apps, Telegram has over 55 million daily active users, providing a fertile ground for the development of Telegram bots. Thanks to its widespread popularity and user base, Telegram is planning to transition into a super app similar to WeChat, supporting the operation of various mini-programs within its platform. This not only enhances its diversity of functions but also opens up new avenues for decentralized payments.

To achieve this grand vision, Telegram is collaborating with leading technology and cryptocurrency companies, including the TON Foundation and Tencent Cloud, to expand its global influence and accelerate the decentralization process. These strategic moves highlight Telegram's potential as a key super app in the future Web3 space.

Telegram bots built on such a powerful platform will undoubtedly benefit, potentially converting Telegram's massive user base into a loyal user base for bots, further strengthening their influence in digital trading and cryptocurrency integration.

6. Risks

6.1 Asset Security Risks

When using Telegram bots for cryptocurrency trading, users need to bear the risk of asset security. These bots typically require creating a dedicated wallet or connecting to an existing wallet. In both cases, the bot may gain access to the private key, leading to security vulnerabilities.

Risk of Private Key Access: These bots can access private keys, raising security concerns. Private keys are like the master key to a user's digital wealth, and their exposure can lead to serious consequences, including theft and unauthorized transactions. The bots' access to these keys significantly increases the risk of security vulnerabilities.

Challenges of Self-Custody: By entrusting bots with wallet creation and private key management, the fundamental principle of self-custody in the cryptocurrency space is somewhat compromised. Shifting from individual control to reliance on automated systems may create a false sense of security, making users vulnerable to mismanagement or even malicious activities.

Risks of Poor Asset Management and Unauthorized Access: The design of Telegram bots typically involves managing assets without direct user supervision, opening the door to potential mismanagement. Additionally, the lack of robust security protocols may lead to unauthorized access, whether through security flaws in the bots themselves or external threats.

To mitigate these risks, users are advised to exercise caution when using Telegram bots for cryptocurrency trading. This includes thoroughly researching the security features of the bots, avoiding storing large amounts of assets in wallets accessed by these bots, and regularly monitoring trading activities for any signs of unauthorized behavior. While Telegram bots offer convenience and efficiency in trading, they also pose substantial risks to asset security. Users must remain vigilant and take proactive measures to protect their digital assets in this evolving field.

6.2 Risks of Lack of Code Audits

For Telegram bots, the lack of comprehensive and regular security code audits may increase the risk of exploited vulnerabilities. This absence of audits leads to a lack of transparency and oversight, putting users' assets at risk. For example, projects like Unibot and Banana Gun have not undergone code audits by Certik, according to Certik's data, and users need to bear the risks associated with smart contracts.

Due to the lack of code audits and KYC verification, the projects receive lower scores in terms of "code security" and "fundamental health."

In the case of Banana Gun, within less than 3 hours of the token's initial launch, its price experienced drastic fluctuations, dropping from a peak of $8.7 to just $0.02, almost close to zero. The Banana Gun team explained through an official announcement that there was a critical error in the token contract that the team failed to fix. They added that despite the contract undergoing two audits, the error remained undetected. This incident also confirms the risks associated with the lack of code audits.

Unibot chose a less recognized third party for code audits and did not undergo KYC verification. This situation may affect the project's credibility and security, as less well-known audit firms may not provide the same level of audit quality as more reputable firms. Additionally, the lack of KYC verification increases the risk associated with transactions with anonymous or opaque entities.

6.3 Intense Competition

In the fiercely competitive Telegram Bot ecosystem, the relatively low market entry barrier makes it easy to be imitated and replicated, leading to significant homogenization among projects. In such a competitive landscape, individual bots may face the challenge of user attrition, making it crucial to build strong competitive barriers. This means projects need to have unique advantages to prevent market intrusion by competitors.

For example, Bonkbot's prominent position in the Solana meme coin space is mainly due to its status as a market pioneer. However, user loyalty in this space is generally low, and users are more inclined to choose services based on product performance and potential returns rather than brand loyalty. This means that once better trading conditions or more attractive opportunities emerge, users will quickly switch to other platforms. This is a key reason why platforms like Unibot or Maestro Bot have not been able to maintain a leading position.

In conclusion, while the Telegram Bot field presents promising growth potential overall, not every project can stand out in the competition. Therefore, investors entering this field need to recognize the potential investment risks of each project and be aware of the unpredictability of this market.

7. Summary and Outlook

7.1 Intensified Competition in the Solana Ecosystem for Telegram Bots

Market Saturation and Formation of Leaders: With the increasing competition among Telegram bots in the Solana ecosystem, the participation of well-known projects like Unibot and Banana Gun has made the market more saturated. In such an environment, only a few projects can survive, requiring each project to develop a unique roadmap and value proposition.

Personalization and Innovation: Projects must differentiate themselves through personalized services, technological innovation, or better user experiences to attract and retain users.

7.2 Bull Market in the Cryptocurrency Market

Impact of Policies and Market Sentiment: Benefiting from positive policy news, the cryptocurrency market is gradually entering a bull market. This will attract more retail investors to enter the market, benefiting tools like Telegram bots.

Market Positioning and Accessibility: Given that Telegram bots aim to simplify the cryptocurrency trading process, their appeal to ordinary Web 2 users will increase as retail investors enter the market.

7.3 Development of Ordinals Inscription Market and Bitcoin Telegram Bots

Bullish Trend in the Bitcoin Market: The Ordinals Inscription market benefits from the positive trend and news of Bitcoin, and is expected to further grow.

Early Market and Opportunities: Since the Bitcoin Telegram Bot market is still in its early stages, there is optimism for future development. This provides a huge opportunity, especially for projects that can quickly adapt to market demands and innovate their services.

In conclusion, while the market is fiercely competitive, it also means there are plenty of opportunities. For Telegram Bot projects, it is important to identify and leverage these trends, while continuously innovating and improving to maintain their competitiveness and appeal in the market.

[Disclaimer] This report is an original work completed by the student @ChingChaLong02 at @GryphsisAcademy under the guidance of mentors @ZouBlock and @Erjiueth. The author is solely responsible for all content, which does not necessarily reflect the views of Gryphsis Academy or the organization commissioning the report. Editorial content and decisions are not influenced by readers. Please note that the author may own the cryptocurrencies mentioned in this report. This document is for informational purposes only and should not be used as the basis for investment decisions. It is strongly recommended that you conduct your own research and consult with independent financial, tax, or legal advisors before making investment decisions. Please remember that past performance of any asset is not a guarantee of future returns._

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