Telegram trading bots force crypto traders to sacrifice self-custody for UX

Trading bots managed via the crypto-friendly messaging app Telegram often require users to input their private keys so they can make trades on their behalf. The increasing numbers of these bots suggest that meme coin traders are happy to forgo one of crypto’s core tenets, self-custody, to smooth the process of buying into the latest hot token.

After all, when betting on the next crypto moonshot, it’s best to be early.

The likes of Maestro, BonkBot, and Banana Gun significantly reduce friction when ape-ing into the next WIF, and some are specifically designed to ‘snipe’ freshly launched tokens.

Rather than worrying about finding the correct pool on one of many decentralized exchanges (DEX), users simply message their instructions to the chatbot, which handles the on-chain activities. Additionally, with some bots claiming to protect trades from front-runners, users may feel reassured that their FOMO won’t end up with them getting ‘sandwiched.’

Read more: Bots are front-running bots front-running Base meme coins

All this convenience comes at a fee, of course; some bots even compete with top DeFi protocols in terms of revenue.

According to Dune Analytics user whale_hunter’s dashboard, trading bots currently account for an average daily volume of $250 million, peaking at over $700 million on March 18. The top five bots have each executed between $1 billion and $4.5 billion in trades.

The trades generate at least $1.7 million in average daily fees and are overwhelmingly focused on Solana, with Coinbase’s Base also growing in popularity.

Just like any DeFi product, however, there’s always the looming threat of hacks, bugs, and rugs. Unibot was exploited in late October, as was Maestro, and in September a bug in Banana Gun’s token contract prompted accusations of a rug pull.

Meme coins

Memecoin season, mostly focused on Solana, has seen wild price moves on tokens with names such as dogwifhat (WIF) and Jeo Boden.

Read more: $10M accidentally burned as Solana memecoin craze continues

Lately, though, as attention stalls, the craze has taken a darker turn as increasingly controversial tickers are launched in a desperate attempt to stand out from the crowd.

As a post-ETF bull run stalls, crypto ‘degens’ will bet on anything to maintain the momentum. Perhaps cocoa will be next.

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