Binance Research | Overview of Telegram BOT - Common Features, Applications, and Risks

Telegram BOT has recently become a new topic of discussion in the cryptocurrency community, as it allows users to link their crypto wallets, conduct various transactions, follow trades, execute airdrop tasks, and more. Due to the popularity and convenience of the messaging app Telegram, cryptocurrency-related Telegram BOTs have gained traction, especially with the emergence of bots that distribute tokens, piquing the interest of more individuals. Binance Research comments: These bots provide a user-friendly alternative for existing decentralized finance (DeFi) front-end applications.

How does a Telegram BOT typically operate?

According to Binance Research Institute:

General Operation:
◆ Step 1: Users input commands in the Telegram bot's channel.
◆ Step 2: A main menu is generated, allowing users to set up a new wallet or connect an existing one.
◆ Step 3: Once the wallet setup is complete, users can fund the wallet with the provided address.
◆ Step 4: Users receive additional menus to execute different types of transactions.

Common Functions of Telegram BOTs

Common functions include:
◆ Trading: Buying and selling tokens directly through Telegram.
◆ Coin Sniper: Automatically purchasing tokens when they are listed.
◆ Copy Trading: Mimicking trades of other traders.
◆ Airdrop Sniping: Automatically executing a series of actions to increase chances of receiving airdrops.
◆ Others: Bots may offer additional functions such as analysis or wallet tracking.

List of Telegram BOTs

	Trading	Coin Sniper	Copy Trading	Airdrop Sniping	Others
Unibot	○	○	○

Binance Research Institute indicates that Telegram currently has over 800 million monthly active users, representing a vast market with the potential to expand the user base for cryptocurrencies. The token market value related to bots has exceeded $150 million, with many tokens experiencing significant growth in a short period. UNIBOT token holds over 77% of the market share by market value. Maestro leads with approximately 2,000 to 3,000 daily active users.

As of July 23, 2023, daily trading volume for Telegram BOTs has reached a record-breaking $10 million. The cumulative trading volume has surpassed $190 million. However, the trend of trading and usage is showing signs of slowing down, with further developments yet to be determined.

Profitability of Telegram BOTs

Binance Research Institute states that profitability usually comes from charging users transaction fees. Another slightly controversial fee model involves levying "taxes" on each purchase or sale transaction involving the native token of the bot.

Based on public data, Binance Research Institute reports that Telegram BOTs have collectively earned over 15,500 ETH, approximately $28.7 million in total revenue. Not all revenue is generated through transaction fees; for example, Unibot obtained 4.3K ETH, primarily through "taxes."

Telegram BOT Maestro has performed well in revenue generation. Launched earlier in July last year, it charges a 1% trading fee and maintains stable trading revenue with a daily active user count of around 2-3K.

Potential Applications of Telegram BOTs

Binance Research Institute analyzed several potential applications of Telegram BOTs:

• Expansion to other platforms: Many bots have expanded beyond Telegram to platforms like Discord, reaching more users and providing another venue for executing trades.
• Diversification of product offerings: While some bots may focus on specific areas like coin sniping, it is speculated that more bots will strive to develop new features covering various areas, positioning themselves as one-stop service providers where users can execute different types of trades within a single bot.
• Multi-chain expansion: Some bots have crossed multiple blockchains beyond the Ethereum blockchain, allowing users to trade on different blockchains.
• Price competition: Currently, most Telegram bots' fees are not the most cost-effective. Lower fees may become a way to attract users as the field matures and competition among established participants intensifies.

Risks of Telegram BOTs

Binance Research Institute points out that interacting with Telegram BOTs is not without risks. Users must fully understand these risks and conduct thorough due diligence before engaging with bots.

Risks include:

• Asset security: Bots have different setups but generally involve users creating a dedicated wallet or connecting an existing one. In both cases, the bot gains private key permissions, which may pose risks.
• Smart contract risks: Interaction with smart contracts is inevitable in how bots operate but not entirely foolproof.

Given the examples of these risks, bots may not be suitable for everyone.

How to Mitigate Risks of Telegram BOTs

Binance Research Institute suggests users can mitigate risks by:

• Trading with smaller amounts
• Avoiding keeping substantial funds in wallets
• Establishing a new wallet specifically for bot interactions rather than using the primary wallet

Evaluation of Telegram BOTs by Binance Research Institute

Telegram BOTs provide a seamless user experience, garnering significant discussion and usage, and possess a revenue model that gives value to their tokens.

However, it's important to note that not all bots are the same; a significant portion of some bots' revenue may come from taxes on token transactions rather than trading revenue. Therefore, the sustained revenue growth of these bots depends on continued robust trading activity of their tokens.

At this stage, it is premature to determine the long-term viability of Telegram BOTs. Attention should be given to mitigating risks associated with bots and innovating useful new features for users.