Trading bots

Telegram trading bots are hot, but don’t trust them for custody — Security firms

August 10, 2023 Coin Telegraph

Beosin

There are still too many unknowns over how various Telegram trading bots store private keys, blockchain security firms told Cointelegraph.

Telegram trading bots, which have been turning the messaging platform into a quasi-crypto marketplace, pose significant security risks for users and require further scrutiny, according to blockchain security firms.

While such trading bots have existed for years, they've recently gained attention as crypto markets gain and associated bot tokens have gained in price, blockchain security firm CertiK told Cointelegraph.

As of the time of writing, the combined market capitalization of Telegram bot tokens is nearing $250 million, according to CoinGecko. The largest of the pack is Unibot; other popular bots include Wagie Bot and Mizar.

The bots are automated programs that run through Telegram, allowing users to make trades on decentralized exchanges (DEXs) by sending messages to it through the app.

Telegram bot tokens will be the next crypto meta in the coming 1-2 months. Agree or disagree? https://t.co/LewLnlivSm
— Bobby Ong (@bobbyong) July 19, 2023

CertiK, however, warned that many Telegram bots create crypto wallets for users, with only some actually providing the private key.

It’s unclear if they’re stored with accessibility by project employees, on the user device, or backed up through Telegram.

“While these platforms offer high-volume DEX trading options, they should be considered extremely high-risk and unsuitable for medium to long-term storage of assets,” CertiK said.

The Unibot token market capitalization is over $185 million — the largest Telegram bot token by market cap.

Latest data shows Unibot users have traded a volume of $155 million across over 230,000 trades using the bot, according to Dune Analytics.

*The daily trading volume of Unibot users since late May shows a spike around late July. Source: Dune*

In an Aug. 5 post, blockchain security firm Beosin also highlighted the security risks of using the bots, claiming their centralization posed a risk to a user’s private wallet keys.

It added further security risks come from many of the bots not open-sourcing their code or undertaking security audits and a user could also lose control of their funds if their Telegram account is hacked.

Beosin recommended projects open-source their code to make security reviews easier and ensure better storage of user private keys.

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MoonCats users are voting to destroy the keys to its final 160 ‘Genesis’ tokens

March 22, 2021 Coin Telegraph

Axie Infinity

The MoonCats community are worried its final 160 "Genesis" collectibles will all be accumulated by bots, with more than 70% voting to destroy the tokens' private keys.

MoonCats, the long-dormant tokenized collectibles platform that was re-discovered earlier this month, now has a problem on its hands — trading bots.

MoonCats collectibles depict 8-bit cats that live on the moon that can be traded or "adopted" by users. The project was launched on Aug. 9, 2017 by developer Ponderware, with a hard limit of 25,500 MoonCats set to be created through a process similar to Ethereum mining.

However, the MoonCats community is now fearing the upcoming release of the final 160 Genesis cats may be hijacked by trading bots, with users complaining that Mooncats has become overrun by bots programmed to accumulate new cats the moment they can be purchased.

MoonCats was rediscovered earlier this month amid the booming growth of the NFT industry. When collectors recently became aware of the project, it was reported that MoonCats NFTs were going for between $50 to $200. However, prices have since increased rapidly, with MoonCats now trading for 1 ETH on averag.

The most sought-after breed of tokenized space cats are “Genesis MoonCats” — tokens that were among the first 256 mined on the platform. A Genesis MoonCat sold for 100 ETH worth roughly $180,000 earlier this month.

With the final 160 Genesis cats currently awaiting release and the MoonCats community fearing they may be all bought by bots, Ponderware is looking to the MoonCats community to decide how to proceed next.

On March 17, the developer launched a smart-contract poll for MoonCats users asking: "Should the MoonCatRescue developers destroy their private key so that no future Genesis MoonCats can ever be released?”

A “yes” outcome will prevent Genesis MoonCats released in the future, as the private key to the wallet holding the cats will be deleted. A “no” outcome will see the private key preserved and further discussions between Ponderware and the MoonCats community to establish a "fair" method for distributing the final Genesis cats. The developer stated:

"A fair distribution of those cats may prove technically, socially, and/or economically impossible. We will work with the community to meet the challenge, but it is likely to be a complex and drawn-out issue."

As of this writing, the poll shows that 72% of respondents are in favor of destroying the private key, while 28% are opposed.

Bots have been causing problems across the NFT space for many months. On Feb. 26, NBA Top Shot was forced to delay the launch of their Premium Pack due to high levels of botting activity on the platform. Dapper Lab’s CEO, Roham Gharegozlou, addressed the delay, noting the firm is not interested in quick sellouts generated by trading bots.

every decision has tradeoffs, and we'll always prioritize real fans – i am sorry for the delayed drop today i know 100k+ of you were super excited, but for many this will be their first rare pack drop in @nba_topshot – we didn't want a super fast but unfair sellout https://t.co/6npaHKbd92
— Roham (@rohamg) February 25, 2021

In March 2020, the Ethereum-based collectible game Axie Infinity sought to discipline botting activity by issuing 30-day bans for any accounts associated with the use of bots.

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