Interpretation of Binance Research Institute Telegram Bots Report: Another Trading Experience on Mobile

Written by: Jie Xuan Chua, Binance Research

Compiled by: Deep Tide TechFlow

Various Bots tokens on Telegram have recently attracted attention with their astonishing price increases. Although prices have since retreated, the narrative in its early fluctuations is still worth noting.

Binance Research has released a report on Telegram Bots, indicating that the cumulative trading volume of Telegram bots has exceeded $190 million, with a single-day peak trading volume reaching $10 million.

What is the trading model of these bots, how will the entire sector develop in the future, and what potential risks might exist?

Deep Tide has organized and interpreted this report, and here are the core viewpoints.

Key Points:

1. Telegram bots allow users to participate in crypto activities through mobile devices in a more user-friendly manner by providing functions such as trading and airdrop sniping.
2. The cumulative trading volume of Telegram bots has exceeded $190 million, with a single-day peak trading volume reaching $10 million.
3. Telegram bots profit by charging trading fees and "taxes" on token transactions. Total revenue has surpassed $28.7 million.
4. At this stage, it is difficult to assess the real demand; the current popularity is largely driven by rising token prices. However, this field will continue to develop in the short term.

General Process of Telegram Bot Trading

• Users input commands in the Telegram bot's channel, and the bot generates a main menu.
• Users can set up a new wallet or connect an existing wallet in the menu and recharge the wallet using the provided address.
• They can then execute different types of transactions, such as buying and selling tokens, airdrop sniping, and copy trading.

Evaluation:

• Compared to existing DeFi frontends, Telegram bots provide a more friendly and convenient user experience (especially for novice users).
• With 800 million monthly active users, Telegram is a good choice for those who have been "exposed" to crypto but have not yet entered the space.

Common Functions and Comparisons of Telegram Bots

1. Trading: Users can buy and sell tokens directly through Telegram.
2. Airdrop Sniping: Automatically buy tokens when they are newly listed.
3. Copy Trading: Simulate the trades of other traders.
4. Airdrop Farming: Automatically execute a series of actions to increase the chances of receiving airdrops.
5. Other Functions: Such as analysis or wallet tracking.

A comparison of typical bot functions essentially involves trade-offs among the above features.

Evaluation:

Isn't it like having a bunch of apps? Previously, you had to go to A for e-commerce, B for finance, and C for offline life, but now one WeChat encompasses everything?

The integration of massive traffic entry with functionality, although bot features are still in the early stages, represents a clear departure from most DeFi applications by offering a "one-stop" solution within the traffic pool.

Sector Overview Analysis

Total Potential: Telegram reportedly has over 800 million monthly active users, now able to perform crypto activities in a different way via mobile devices.

Market Capitalization and Project Status:

At the time of writing, the market capitalization of bot-related tokens exceeds $150 million, with many tokens experiencing several-fold growth in a short period.

The key contributor is the UNIBOT token, which holds over 77% market share. Interest in Unibot as an agent has also been steadily increasing on Google searches.

Evaluation:

According to the typical psychological and attention-shifting process of ordinary users, prices often rise first, followed by searches on search engines. Therefore, as prices rise, more people search, but the actual proportion of users trading with bots may not be very large.

A more precise analysis of the churn rate is not provided in Binance's report, but we can understand it as a normal process of new narrative development: from a small number of people paying attention -- price increase -- majority searching -- price beginning to retract.

User Adoption:

User metrics hit a new high in July, with daily users exceeding 6,000.

Maestro maintains a lead with daily active users around 2,000-3,000. Unibot is catching up, with the gap significantly narrowing in recent weeks; daily active users surged from about 400 to a peak of 1,700 in two weeks in July.

Daily trading volume on bots reached a record high, exceeding $10 million. The cumulative trading volume over the entire lifecycle has also surpassed $190 million. Note that the actual numbers may be higher, as not all data is immediately available.

Token Impact:

The trading activity of tokens has the potential to influence community participation, especially for new narratives.

Rising token prices and trading volumes attract attention and discussion, and vice versa.

Although still at a high level, we have noticed that trading volumes of these native bot tokens have slowed in recent days, coinciding with an overall decline in bot users and the number of bots.

Evaluation: Speculation is the primary driving force. However, whether this narrative has ended and whether another round of speculation will occur remains uncertain.

Revenue Model of Bot Projects

Trading volume and taxes jointly determine the revenue of bot projects:

1. Users initiate trading activities through bots;
2. The protocol earns trading fees;
3. Users buy/sell bot-related tokens;
4. The protocol levies taxes on the actions in 3.

For example, Unibot has collected a total of 4.3K ETH (approximately $8 million), with about 86% coming from purchase or sale taxes rather than trading income.

From the beginning of this year to July, Telegram bots have collected over 15,000 ETH (approximately $28.7 million) in revenue.

Maestro currently leads in cumulative revenue, with Unibot in second place, but the revenue gap between the two exceeds one time.

Additionally, a relatively high daily active user count of around 2,000-3,000 allows Maestro to achieve stable trading revenue.

Trading revenue comes from the 1% trading fee charged by Maestro for each successful buy or sell order through the application.

Sector Outlook and Risks

Ongoing and potential development directions:

• Expansion to other mediums: Many bots have already expanded from Telegram to other platforms, such as Discord. This allows them to reach more users and provide another venue for executing trades.
• Increasing product offerings: While some bots may choose to focus on a single area (e.g., sniping), we speculate that more bots will attempt to develop new features to cover more areas and become a one-stop shop. Users would only need to access one bot to execute various different trades.
• Cross-chain expansion: We have observed bots engaging in cross-chain expansion, not just limited to the Ethereum blockchain. This enables them to facilitate trading for users across different blockchains.
• Price wars: Most Telegram bots currently do not have cheap fees. As the industry matures, with little product differentiation among many established players, lower fees can be used to attract users.

Potential Risks:

• Asset security: Bots have different setups but generally allow users to create dedicated wallets or connect existing wallets. In both cases, the bot will access private keys, which may pose risks.
• Smart contract risks: Given how bots operate, interaction with smart contracts is inevitable. Although audits may not be comprehensive, strictly audited projects enable developers to identify and address critical issues.

User Recommendations:

• Conduct smaller-scale trades;
• Keep wallet funds to a minimum;
• Create new wallets instead of using the main wallet when interacting with bots.

Conclusion

It is important to clarify that a significant portion of some bots' revenue may come from sales or purchase taxes on trades rather than from bot trading income.

At the current stage, it is still too early to determine whether Telegram bots can continue to attract user interest.