As a major communication tool in the Web3 world, Telegram plays a pivotal role in our lives. In this issue of Mask Research, we will focus on Telegram bots: how they emerged and how they are shaping users’ trading, information-gathering, and social experiences. In the latter part of the report, we will compare 3 mainstream products: Maestro, Unibot, and Banana Gun.

Table of Contents:

• The Emergence of TG Bot
• The Current Landscape of TG Bot
• The Future Direction of TG Bots

The recent launch of Banana Gun’s token sale has rekindled interest in Telegram Bots (TG Bot) within a quiet market. While many TG Bots merely ride the wave of markets, Mark Research believes TG Bots are the beginning of a broader market trend focused on crypto native user experiences and the growth of millions of Telegram users.

The Emergence of TG Bot

The Need for Enhanced Trading Experience

App store policies and the nature of mobile wallets create complex multi-step, multi-app experiences for Web3 users on mobile phones. Telegram, on the other hand, is a highly accessible, liberal social ecosystem friendly to third-party apps powered by their robust set of open APIs. Outside of crypto-related bots, the TG Bot ecosystem is primarily composed of notification and efficiency bots developed on IFTTT logic. These bots serve diverse functions, such as tracking stock market prices, managing RSS subscriptions, group management, and more.

The subpar Web3 user experience on mobile and the strict App Store policies create a perfect market opportunity for TG Bots. Due to the nature of mobile wallets, Web3 web apps and other mobile native apps require multiple steps and multiple apps to connect, log in, and authorize trading and other on-chain activity. The poor mobile experience in Web3 is the primary driver of a desktop-first approach for most Web3 dApps we see today.

Users could also encounter risks such as public node congestion and MEV attacks. As a result, some developers began to leverage TG Bot’s automation scripts to enhance the user experience, leading to the emergence of Crypto tracking and trading Bots in the market. A prime example of this trend is the Maestro.

A Quiet Start of Trading Bots

In October 2021, Maestro launched a TG Bot to monitor token activity and trading activity of whales and other profitable accounts. Initially named Catchy and powered by its token, the bot initially allowed users to monitor Ethereum and Binance Chain for token price movements and to follow the activity of other accounts to find opportunities for trade “sniping”. However, the bot garnered little attention, and its initial token presale was postponed due to insufficient participation. Only in August 2022, with the launch of the Sniping bot, which are software programs designed to scan the liquidity markets and detect the latest liquidity pools on the blockchain, as well as the project’s renaming to Maestro, it started to attract a modest user base of traders.

Despite various growth strategies tried by the Maestro team, user volume and engagement consistently hit a plateau. One key roadblock to onboarding new users was the requirement to either import their wallets’ private keys or use a custodial wallet generated by the TG Bot. This was a deal-breaker for many crypto users who were highly sensitive to security issues.

The Need for Speed & the Arrival of Meme Coin Season

With the Arbitrum Airdrop in March 2023, the languid crypto market welcomed a grand meme coin season. Led by $AIDOGE, an airdrop on Arbitrum combining the memes of Doge) and AI for no apparent reason besides “number go up”, and $PEPE, the Pepe meme coin on Ethereum. Other soon-to-be meme coin legends followed including LADYS, TURBO, COCO, and TEST with token prices that multiplied a hundred or even a thousand times, attracting a large number of users in search of new found wealth.

However, due to the poor mobile trading experience, many users who cannot stay on-chain round-the-clock found it challenging to participate. For example, a copy trade is relatively easy on a PC. Mobile users, however, can use TG Bots like Ceilo.fiance to get new token and trade notifications but copy trade requires a complex set of steps on multiple websites and apps:

1. Open transaction details on a block explorer
2. Copy the token contract address
3. Switch to the wallet app (ideally with the Uniswap interface already open, connected, and logged into — 3 additional steps)
4. Paste the contract address and click to accept the risk warning from Uniswap
5. Input the purchase amount
6. Confirm the quote and click swap
7. Sign the transaction in the wallet app

This process could take anywhere from 10 seconds to a few minutes, depending on the user’s speed and internet connection. For time-sensitive launches and meme coins, this could mean a substantial difference — where some meme coins only have a pump lifespan of 3 minutes, and a second’s difference could determine whether a user is dumping or picking — a matter of life and death for traders.

As a result, more efficient tools became the coveted Excaliburs in the crypto world, and TG Bots, led by trading TG Bots, came into everyone’s view.

For the same trade, a Trading Bot could not only automatically monitor and track specific wallets, but also copy the trading process delay within a few blocks while also avoiding MEV attacks and even automatically sell at a desired profit.

One key feature called “Block-0 Sniping” turned a process that was previously only accessible to highly technical individuals into one that anyone with sufficient funds could execute. This fundamentally shifted the power dynamics among players.

In any game, two crucial groups exist: those with substantial wealth and those with technical proficiency. The latter group gains advantage and status through superior skills, while the former does so by spending a significant amount of money on the game. A well-balanced game allows both groups to gain comparable advantages at a certain stage.

However, in the past, the wealthy players were often overshadowed by the technically proficient individuals, until the introduction of trading TG Bots leveled the playing field. As a result, even bots like AlphaMan with annual fees reaching thousands of dollars maintain a stable user base.

All of the above reignited the popularity of intent-centric applications like trading TG Bots take off. Here you can see the trading volume surge in late April on Maestro.

Trading Volume on Maestro

With the launch of Unibot in June 2023, meme coin popularity really took off with the introduction of $LOOT in July, the viral TikTok video meme coin $YYY, and the resurgence of $BITCOIN.

Unibot also launched its web app, Unibot X, during this period, attracting many desktop traders with its superior trading experience. Leveraging its token launch advantage, Unibot successfully elevated its token price from $57 on July 15 to an all-time high of $199, with a peak market cap of $200 million on August 16, 2023, cementing its position as the leading TG Bot at the time.

The Current Landscape of TG Bot

Trading Bots

Here we want to focus on trading bots with tokens. For example, by looking at the CoinGecko for Telegram Apps with their own tokens, the top 5 are trading bots with 3 of the bots also focusing on AI services. While the bots with AI have other uses for AI, trading with AI is the primary driver of their usage today.

Telegram Apps with their own tokens

PAAL AI is a platform that enables users to deploy their own GPT-powered Bots with a customized knowledge base. PAAL AI can access online and real-time on-chain data to answer user questions and make on-chain trading transactions via the bot. Its primary revenue model is derived from the 4% token trading taxes on both buy and sell. It is currently developing its mobile trading app, which includes standard trading features like Sniping.

ChainGPT follows a similar approach, integrating on-chain querying, smart contract generation, NFT creation, contract auditing, and other automated Web3 functions. AI is also used in its Trading Bot.

AimBot is an AI trading TG Bot where the AI functions as a trader, and the profits are distributed to $AIMBOT token holders by the protocol.

We’ll provide a more detailed analysis of Banana Gun, another TG bot that snips upcoming token launches and purchases launched tokens, in the later part of this research.

In addition to trading TG Bots, there are also middleware TG Bots that focus on community management and token gating like Collab.Land and Guild; various TG wallets Most wallet applications are only based on Telegram’s TON ecosystem which we have not reviewed for this article. The wallets focusing on Ethereum and other EVM-compatible chains require importing private keys.

Strong Performance Despite the Bear Market

Drawing from the data on Dune, as of October 8, 2023, the overall performance of trading TG Bots in the relatively subdued bear market can still be considered impressive:

The total trading volume reached $2.94 billion, with 74.9% originating from the OG project Maestro, 12.3% from the former leader Unibot, 10.3% from the newly top-tier Banana Gun, 2.3% from DC Bot Alphaman, and the remaining approximately 0.2% from other projects.

It’s important to note that Maestro trading volume is inferreferred from its 1% trading service fee while Unibot and Banana Gun trading activity can be tracked on chain via token transaction taxes using services like Dune. Relying solely on the 1% service fee, its cumulative revenue has reached approximately 13,495 ETH (approximately $22 million).

Looking at the market value of their token, Unibot dominated over 90% or even 95% of the market value before the advent of Banana Gun. With the $BANANA token launch of Banana Gun on September 14, it quickly seized market share with its lower fees and memetic social popularity, becoming the new leader.

Currently, the total market value of Trading Bot tokens is $137 million, with Banana Gun accounting for 57.3%, Unibot accounting for 38.4%, and the two together occupy 95.7% of the total market value.

Unibot v.s. Banana Gun’s Market Cap

Regarding user numbers, the average DAU total of the top three bots over the past month is 5,651 addresses, with the newly crowned Banana Gun and the veteran Maestro having roughly equal user volumes at around 2,000 daily addresses. Unibot is relatively stable at around 1,000 daily addresses, but all have experienced varying degrees of decline with the recent cooling of the market.

Daily Active Addresses for the 3 products

From the perspective of Web3 products, trading TG Bots perform well — improving user’s profit potential and trading experience For perspective, Maestro, the oldest project, generates a daily income of approximately 40–80 ETH from service fees alone.

Trading Bot Business Model Analysis

Since we’ve touched on income, let’s break down the business model of Trading Bots.

Product Features

Product functionality is mainly divided into buying, selling, and trading assistance.

• Buying

The core of the buying part is the token sniping features. Sniping usually has 3 methods. One is First Block Bundle Sniping (or Block-0 Sniping), which monitors the first trade transaction of the token and bribes miners to bundle their transactions into the first block. This is the most common way to snipe, and the rate of success entirely depends on how much money is paid for the bribes;

The other two are Method Sniping and Liquidity Sniping, which monitor the activities of specific contract functions (such as enabling trade) or adding liquidity to trigger sniping. These two usually require users to have specific blockchain technical knowledge and may fail due to some special settings in token contracts.

The other two relatively essential functions in the buying part are Copy Trade and Presales Sniping. Copy Trade is to monitor specific wallet transactions and make the same one. Presales Sniping generally only supports presales on the Pinksales platform.

Banana Gun also has a unique buying feature called Tax Limit Orders, which only triggers buying action when the buying or selling tax reaches the target value.

• Selling

The selling part is relatively simple, mainly including Limit Orders, Trailing SL, and Transfer on Blacklist.

• Trading Assistance

These are also quite common and standard features, including Private Nodes, Anti-MEV, Anti-Rug, Honeypot Detection, etc., mainly about trading acceleration and loss protection.

Below is a feature comparison across 3 mainstream products:

From personal experience, Maestro has the most comprehensive functions, basically having everything the user could probably use. It also has its own Call Channel and can perform various operations directly in the Call Channel, which is very systematic.

Unibot has a very clear and organized UX suitable for beginners. Every step can find detailed guidance, is very handy to use, and also has the web app of Unibot X for PC users; Banana Gun is the most straightforward one, with all the most essential functions, but cheaper.

Revenue Sources

First, the common revenue source for trading TG Bots is transaction fees. As shown in the chart above, the general rate is between 0.5% — 1% of the transaction total.

The difference is how the fees are charged by projects with tokens and without tokens.

• Projects with Token

For these projects, their other sources of income are the token trading tax and token unlocking with token tax accounting for 50–60% of revenue

Banana Gun’s token has a 4% transaction tax on both the buy and sell side — of which 2% is distributed to token holders, 1% goes into the treasury, and the remaining 1% is distributed to the team. As of October 9, the team’s tax share, in just over half a month, has reached 166 ETH (about $27k).

Unibot has a 5% trading tax and has earned 2,667 ETH (about $4.34 million) in revenue from the team’s tax share alone in the past 3+ months.

The main uses of tokens are threefold: membership level, fee discount, and revenue sharing. Different projects have different combinations, but revenue sharing is generally essential. As for Banana Gun’s token holders, revenue sharing is the only benefit.

• Projects without Token

For projects without a token, they use subscription fees as their primary source of income.

Subscription fees are also divided into two types:

1) Entry fees, such as Alphaman, only paid users can use the Bot, but usually, these types of Bots will skip the transaction fees;

2) Premium subscription fees, such as Maestro, which charges transaction fees while giving users more usage quotas and additional features based on their subscription tier.

By looking at the data, premium subscription fee performance is undoubtedly better. On the one hand, the entry fee type will greatly reduce the conversion rate of new users. On the other hand, the transactions of meme coins are generally high-frequency, and the income brought by transaction fees is often higher than expected, so higher fees are less of an issue.

The Future Direction of TG Bots

Zooming out — TG Bots for trading is more like a transitional product in the Intent-centric trend. They are sufficiently lightweight and efficient, and with the backing of the Telegram ecosystem, they possess considerable potential for social sharing and usage among communities.

However, TG Bot product completeness will always be somewhat inferior to a comprehensively packaged application with more screen real estate than a chat-based TG Bot. Trading bots are attempting to overcome the smaller interface by simply making the bots smarter with AI or easier to use with more easy-to-use logic.

One approach integrates AI, enriching other Intent-centric scenarios by incorporating LLMs led by GPT, aiming to build AI agents akin to chatbots in crypto. Typical projects include Chain GPT and PAAL AI.

The other approach is more pragmatic, focusing purely on trading. It seeks to enhance the product experience through mobile and web-based apps, deepening various functions within trading and may present a superior wallet experience via AI in the future. Unibot serves as a prime example of this approach.

In these new trading TG Bot experiences, it’s apparent that bots align closely with the underlying logic of the Intent-centric concept where a user states a desire but wants to use a service to execute on the desire. The essence of Intent-centric is common outside of crypto in the Web2 world, and there isn’t a specific term for it (the closest may be user-centered).

Finally, Telegram’s vast social ecosystem of users and bots makes it clear that trading TG Bots is only just getting started. Time will tell if they can transform into specific vertical modules and social portals, leveraging the openness of the Telegram ecosystem to realize the composability of the Blockchain.

Author: Kasper Chen; Edited by Lawson Bae

About Mask Research

Mask Network will publish monthly research reports on the hottest topics in the Web3 world. We will focus on subjects such as Web3 and social media, SocialFi, GameFi, and other exciting new topics.

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