What are Telegram Crypto Trading Bots?
Telegram trading bots connect to decentralized cryptocurrency exchanges and execute trades based on predefined rules. While they are usually free to use, the team usually takes a small transaction fee.
Key Takeaways
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Telegram trading bots connect to your wallet and help users to automate and execute a wide range of trades quickly.
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Most bots include a variety of functions, including stop loss and take profit orders, anti-rug and honeypot features, copy trading, multi-wallet, liquidity, and method sniping features.
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The most popular trading bot is currently Unibot, with a market cap of over $129 million.
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It is important to note the possible security tradeoffs that using Telegram trading bots might pose, as they might have access to your keys.
Telegram bots are user-programmed applications on messaging platform Telegram that can help users automate tasks like trading and price checking. One of the more well-known Telegram bots includes Bobby Buy Bot, which sends alerts to Telegram groups whenever a buy is made. Telegram bots cover an extensive range of functions, and bots can give you up-to-date information on NFT prices, tracking wallets, and much more.
For the purpose of this article, I will be focusing on the latest narrative – Telegram trading bots, which connect supported hot wallets to decentralized exchanges and execute trades based on programmed instructions.
Source: https://dune.com/whale_hunter/dex-trading-bot-wars
In the last few months, the wave of Telegram trading bots boomed. On the 23rd of May 2023, the total marketcap of DEX Bot Sectors tokens was 5.5 Million. Just a little over two months later, on 25 July, the total marketcap has already increased more than 25 times, surpassing a total marketcap of 139 Million.
How Telegram Crypto Trading Bots Work
Many users love Telegram trading bots because of their convenience and efficiency. For example, the most popular trading bot – Unibot, is designed to make extremely fast swaps on Uniswap. According to the website, Unibot is able to execute trades 6 times faster than trading on the traditional website Uniswap.
Instead of having to open your computer, connect your wallet to the website and approve transactions, all you have to do is simply copy and paste the contract address of the token and send it as a chat to buy the token. This seamless process makes it extremely convenient for users to buy and sell with a simple telegram command.
What Can Telegram Trading Bots Do?
While different bots have slightly differing functions, they generally execute the same basic trades. These functions include:
Buy And Sell Tokens Efficiently
Integrated seamlessly into the messaging platform, you will be able to purchase tokens quickly by copying and pasting the CA into the chat. Most bots will also have a refresh function, which gives you live updates on how much you are up or down on your trade. You will also be able to sell your tokens quickly via the bot, as you are able to pre-approve and sign transactions.
Stop Loss And Take Profit Orders
Users can also set stop loss and take profit orders where the bot will automatically execute the trades when the token reaches a certain price. This can be extremely useful as users can automate the trading experience and do not even have to be online for the trades to execute.
Anti-Rug Features
Most of the bots also have anti-rug features. If the token developer attempts to rug-pull the token, the bot can detect the pending transaction in the mempool and execute a faster sell transaction to liquidate the position before liquidity is pulled.
HoneyPot Checking Features
Similar to the anti-rug features, the bot can detect incoming malicious transactions by a token developer. If the incoming transaction makes the token impossible to sell, turning it into a honeypot, the bot will immediately liquidate the position before it becomes a honeypot.
Copy Trading
Users can also input wallet addresses and automatically copy these wallets’ trades and transactions. The idea is to “copy the pros” and thereby replicate their trading successes by following all their trades.
Multi-Wallet Sniping
To bypass individual wallet restrictions on tokens, users can also use the bot to snipe with multiple wallets at a time. For example, if a user snipes a token with five multi-wallets, the bot will execute the same trade on each of the five wallets. This is done to bypass restrictions such as max wallet size, which are usually hardcoded into the smart contract by token developers.
Liquidity Sniping
Telegram trading bots are also able to liquidity snipe, which is a form of automatic sniping that executes a buy order when the bot detects liquidity being added. The bots are often programmed to send buy transactions with the same gas settings as the transactions of the developer, adding liquidity so that the buy transaction will occur in the same block right after the developer’s transaction. This maximizes the amount of tokens a sniper gains on a new token.
Method Sniping
An advanced form of sniping tokens, similar to Liquidity Sniping. Tokens may not begin trading even when liquidity is already added, so users can choose to send buy transactions automatically based on the “Method ID” of a developer’s pending transaction. This Method ID indicates how the developer’s transaction interacts with the token’s smart contract, potentially enabling trading on a new token and allowing a sniper’s buy transaction to execute as early as possible.
Native Tokens
Many of the Telegram trading bots have also released their own native tokens. Holders of these native tokens are usually given lower fees on the platform and exclusive access to certain features, such as faster trades.
Following the Telegram trading bot narrative, CoinGecko has added a new category for Telegram bot tokens.
In May 2023, Unibot launched its own native token, and the token has since been on a steady uptrend. As of today (26 July 2023), UNIBOT is up 91.41% in the last 7 seven days. Following the Telegram trading bot narrative, native tokens of other Telegram trading bots have also been on a steady uptrend.
For example, UNIBOT holders enjoy lowered fees, special access, and a revenue share of the bot. According to the number of tokens users hold, Unibot redistributes 40% of the transaction fees and 1% of the total trading volume back to holders.
For seasoned users of the bot, investing in the native tokens of the different Telegram bots may seem like a good long-term investment because of the lowered rates and special features.
Risks of Using Telegram Crypto Trading Bots
To start using these bots, you will first need to configure and connect your wallet to the Telegram bots so that the bot will be able to execute trades on your behalf. While the Telegram trading bots claim to delete access to your account, we have no sure way of knowing that, and these Telegram bots may have some form of access to your wallet.
While the Telegram trading bots are definitely convenient, it is always important to take note of the possible security tradeoffs they might pose. To be safe, users might want to connect a separate wallet to the bot and only transfer in an amount they may be using.
Other Telegram Bots
Besides crypto trading bots, there are also other types of Telegram bots available.
Price Tracking Bots
Price tracking bots let users check the prices and other related information of coins and tokens over Telegram. Beyond prices, these bots can also provide users with information ranging from technical analysis of a certain coin within a specific time frame, the best and worst performing coins over 24 hours, and sharing recent news in the crypto space. Price tracking bots on Telegram include CoinTrendz and CryptoWhale.
Wallet Tracking Bots
Wallet tracking bots let users track wallets of interest, such as wallets that belong to whales or other smart money investors. They send their users alerts every time a transaction occurs, letting them know of the tracked wallet’s activity in real time so they can decide if they want to make any moves based on the tracked wallet’s transactions. Wallet tracking bots include Cielo and EtherDrops.
Airdrop Farming Bots
Airdrop farming bots enable airdrop farmers to automate their farming strategy on Telegram. This can include executing swaps, bridging cryptocurrencies, staking, lending, and even minting NFTs, all of which are common requirements needed to receive an airdrop. On LootBot, an airdrop farming telegram bot, users need to deposit a minimum of 0.1 ETH, which is to create on-chain volume needed, as well as covering gas fees needed.
Community Management Bots
Finally, there are community management bots. Community management bots can create token-gated communities, as in the case of Collab.Land, where the bot manages token granted access based on programmed requirements. These can range from the number of tokens needed to get the role, or specific NFT metadata conditions required. Community management bots also include MEVFree Guardian, which prevents bots and spam from entering groups by adding an additional layer of verifications before new users can join.
Conclusion
While there are many different types of Telegram trading bots in the market, Unibot is currently the most popular bot due to its simplicity and user-friendly interface. Choosing which type of bot you will use depends on each individual’s needs and preferences. However, it is important to note that you should familiarize yourself with the bot and its features before attempting to trade, as it can result in a loss of funds.
Telegram trading bots are definitely one of the more interesting advancements in the crypto space, as trading on decentralized exchanges is made more accessible and convenient for users. As the Telegram trading bot space is generally still quite new, it is safe to assume that we will be able to see much more advanced features in the future.
Hwee Yan has been involved in the cryptocurrency space since 2021. Currently pursuing a degree in Linguistics and Multilingual studies at Nanyang Technological University, she is a writer who is mainly interested in NFTs, crypto trends and memecoins. Follow the author on Twitter @cryptohy8
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