Click, Chat, and Trade: A Look at Crypto Telegram Bots

Telegram Bots are the Silent Butler You Didn’t Know You Needed!

Bluetooth, Blueberries & Bots

Over 1000 years ago, there was a Viking king named Harald Bluetooth. As the tales go, he loved blueberries so much that it left a conspicuous blue stain on his teeth. This discolored tooth gave him the unique nickname — “Blue Tooth”.

Much like Harald’s legacy of unifying Denmark and Norway, modern Bluetooth technology connects various electronic devices. In a nod to this historical parallel, the Bluetooth logo carries the Nordic runes for his initials, H.B., showing the interconnectedness of past and present.

This spirit of unification is being echoed yet again. Not through tech that connects our devices, but one that mixes crypto trading bots with popular social messaging platform Telegram.

The Crypto Telegram bots are the Harald Bluetooth of 2023.

Tailored to align with individual trading habits and incorporating the nuances of DEX, these bots give new trading experience, especially for degens.

From managing your crypto wallet to facilitating trades on DEXs and sniping newly launched tokens, these bots (or digital butlers) are addressing some of the most pressing pain points of trading on current DEXs.

So, what exactly are Telegram (TG) bots?

They’re essentially tools on the Telegram designed to automate tasks, be it crypto trading or real-time updates on everything from NFT prices to wallet tracking.

Users kick things off by entering a command in the bot’s Telegram channel. A menu pops up, allowing users to either set up a new crypto wallet or link an existing one. Once the wallet is in place, users can transfer funds to the provided address. An additional menu guides users to carry out various transactions.

At their core, these bots might differ slightly in their services, but they predominantly work on the same mechanism.

Here’s the various functionalities offered by TG bots.:

Trading: TG bots allow for fast token purchases. Simply paste the Contract Address into the chat, and you can buy that coin. Real-time updates on your trade performance are just a refresh away. The bots can also sell crypto superfast, thanks to pre-approved transaction capabilities.

Set Automated Trading Parameters: Traders can set specific thresholds like stop loss and take profit. Once the crypto token hits these levels, the bot executes these trades. This hands-free approach means that even if you’re offline, your trading strategy remains active.

Follow Smart Money: These bots can copy the trades of seasoned traders. Here, the Bot monitors “risking little to win big” (smart money) wallets and provides a one-click copy function.

Safety feature: A standout feature in many bots is their anti-rug capabilities. In the event a token’s developer tries to manipulate the market, these bots can spot the impending transaction and sell off the position before the dev can pull the plug. These bots can also identify malicious transactions that could render a token unsellable.

Sniping: TG bots can also automatically buy a token when it’s listed or as soon as liquidity is added. They’re often set up to match the developer’s transaction settings, ensuring the purchase happens immediately after the developer’s move. Even if a token isn’t trading after liquidity is added, these bots can auto-send buy orders based on a developer’s “Method ID.” This ID reveals the nature of the developer’s transaction with the token’s contract, potentially kickstarting trading and allowing for early buy-ins. Bots can also execute trades across multiple wallets simultaneously to avoid wallet limits.

What’s the reason behind the sudden explosion of TG Bots?

The rise of TG Bot is not just a coincidence. As Memecoins find themselves under the spotlight, the crypto twitter community scour the blockchain for ‘Smart Money’ wallets that turn small investments into massive returns and replicate the trades. And the telegram bots are the perfect tool for this.

You see, telegram is more than just a messaging app. It’s a blend of social engagement and crypto alpha information. However, there were still many manual steps like reading the alpha, buying coins, etc. and these steps took more time and effort. TG bots present a more streamlined and easy option to trade coins compared to some existing DeFi interfaces, which can be, let’s face it, a bit on the cumbersome side.

Furthermore, champions of these bots maintain that they can possibly be a gateway to onboard new crypto users. This is mainly due to their intuitive design which ups the ease-of-use quotient. Telegram currently has a user base of over 800 million active monthly users. That’s a big playground for crypto expansion.

Moreover, most of the average Joe wants a “Get Rich Quick” scheme. With countless tales of overnight crypto millionaires, the focus has shifted from mainstream coins to Memecoins. It’s not just about the quick buck; it’s about the ideology. Memecoins often talk about creating fairness, offering a platform free from the strings of venture capitalism.

On top of this, its prominence is further boosted by its visibility on platforms like Coingecko and DeFiLlama. While Coingecko launched a dedicated section for these Telegram bots, Coinmarketcap launched its own Telegram Bot called CoinMarketCap PriceBot.

Revenue Streams of TG Bot

Subscription-Based Access: TG Bot operates on a membership model. To access its services, a user needs to pay a fee such as 0.1 ETH for a 30-day or 1 ETH for an annual subscription. This method is quite niche and community-centric, mostly suited for influencers who have a huge number of followers.

Zero upfront, Fee on Transaction: On every transaction, Unibot levies a 1% fee, which is additional to the usual Uniswap transaction fees. Unibot cycles back 40% of this collection to its token beholders. It’s a win-win for the platform and the token holders.

Hybrid Model: A fusion of the above two, this strategy is the brainchild of Maestro TG Bot. Maestro mirrors Unibot, imposing a 1% transactional fee. However, Maestro hasn’t ventured into token issuance, treating all its collected fees as protocol income. It also launched a VIP community service for $200 a month that offers its members access to Smart Money addresses.

Token-Holding Utility: By holding a specified amount of tokens, users are granted complimentary access to TG Bot’s trading robot.

Current TG Bots Landscape

Tokens associated with these bots have skyrocketed in value, with the market cap touching $258 million. Unibot, a leader in this space, accounts for nearly 73%-75% of the market cap and around 84% of the FDV market share. Its token, $UNIBOT, has seen a meteoric rise, multiplying its value by 50 in just the last quarter.

User metrics for Telegram bots reached its peak in July 2023, witnessing over 6,000 daily unique users. Unibot’s daily users shot up from a mere 400 to an 1.7K within just the latter half of July. Another bot Maestro, one of the first entrants in this domain, enjoys the loyalty of 2–3K users every day. However, it’s not alone at the top.

On July 23, 2023, we saw daily transaction volumes of TG bots skyrocketing beyond the US$10M mark. The cumulative trading volume isn’t far behind, currently at more than $230M+.

Even though the craze around bot-native tokens remains high, a recent drop in their trading volumes seems to mirror a downturn in bot users and overall activity.

Talking about revenue, Telegram bots have successfully converted user adoption into substantial revenue streams. It’s important to recognize, though, that not all the revenue generated is strictly related to actual trading. Take Unibot, for example. It has amassed a total of 4.9K ETH. Interestingly, nearly 85%+ of this figure comes from the purchase or sales “tax” rather than traditional trading revenue. This points towards alternative means of income generation for these projects.

Risks

The landscape of TG Bot remains in its formative phase, with its value barely scratching the surface in the hundreds of millions of dollars range.

However, it’s not all sunshine and rainbows. The developers and project team are under the gun to continually innovate and roll out new features. Furthermore, with fresh players stepping into the TG Bot arena, there’s a looming threat of a competitive price war, especially concerning transaction fees.

Safety remains at the heart of user concerns. How can one ensure wallet safety and token security? Entrusting a platform with your wallet or creating a new one brings along the fear of private key breaches. This inherent risk caps the amount of money users are willing to house on the platform.

And there’s the question of new token contracts and models. Take, for instance, PNDX by Pauly from the NFT market Not Larva Labs. The contract had inherent flaws. Sadly, TG Bot’s radar missed these pitfalls, causing a domino effect where its users became exit liquidity.

Way Forward

As of now, the primary emphasis of these bots are trading functions. However, we may soon see the evolution of the bot, shifting from trading functionalities to new applications, even aggregating various functions.

Not sticking to Telegram alone, several bots are also now making their presence felt on platforms like Discord, broadening their reach and offering more transaction options for users. Moreover, some bots now offer multi-chain functionality, making cross-chain trades possible.

While using Telegram bots doesn’t come cheap now, the scenario might change. As competition intensifies and the services start looking more and more similar, affordable fees might become the new battleground.

Also, for long-term sustainability, projects must find a way for users to easily switch between using Telegram for regular chats and for trading.

In nutshell, even though there’s noticeable excitement around this trend, the current boom might be a reflection of the soaring token prices rather than genuine demand. But, without a doubt, the arena is simmering. With an increasing number of bots, we’re bound to witness even more innovation.

This article was written by Raviyank Patel on behalf of COMB Protocol