The crypto industry’s rebound this year is turning messaging platform Telegram into an attractive market for retail traders.
A new type of trading bot built by anonymous developers has become the favorite choice of traders looking to access decentralized financial markets. Their popularity has increased recently as altcoins surge. According to CoinGecko data, tokens tied to trading bots more than doubled their market value in just one week, exceeding $241 million.
The market is slowly recovering from the losses, with Bitcoin prices up around 77% this year, while other tokens like XRP have also seen their value skyrocket from last year’s lows. Trading bots give investors easy access to decentralized exchanges (DEXs), which offer a wider range of tokens than centralized exchanges (CEX).
Li.Fi company CEO Philipp Zentner said that the focus of trading bots is usually on low market cap coins, meme coins, and those with low trading volume, as they are capable of good profitability thanks to high liquidity and large price gap.
For example, Unibot is a recently emerging type of bot created by anonymous developers. users Once Telegram starts chatting with Unibot, they can conduct cryptocurrency transactions in DeFi as easily as sending a text message to a friend. Not only that, bots can also simplify complex transactions. According to Bloomberg, Unibot attracted more than 6,000 users and generated 3,715 Ether (about $7 million) in revenue in just two months.
The explosive growth of cryptocurrency trading bots stands in stark contrast to the DeFi (decentralized finance) sector. According to DeFiLlama, the total value of cryptocurrencies sent to DeFi has been stuck between $40 and $50 billion for almost a year. DeFi is still struggling to weather a series of scandals following the collapse of TerraUSD and the FTX exchange.
Besides convenience, trading bots also carry risks related to security and privacy. CEO and founder of crypto risk modeling firm Gauntlet Tarun Chitra said that some trading bots need private keys, the type of password that allows access to users’ cryptocurrencies, not counting. high safety.
The CEO and co-founder of Web 3.0 cybersecurity firm Ironblocks Or Dadosh say bot developers can monitor any user’s wallet at any given time, possibly even taking advantage of that to hack their wallet.
The crypto industry is inherently high-risk, so bot security is not a top concern for some investors. Co-founder of decentralized exchange Vertex Protocol Alwin Peng said that the proliferation of trading bots shows that investors are often concerned with short-term gains.