80% of income comes from token transactions, security is in question, how long will Unibot’s narrative continue?

With 80% income from token transactions, the security of Unibot is questionable. How long will its narrative last?

Less than 20% of Unibot’s revenue comes from transaction fees, while over 80% comes from UNIBOT token transaction taxes.

By: Pomelo

Recently, information about Unibot such as “Captured fees reached $665,000, UNIBOT token increased 50 times in two months” has been circulating in major cryptocurrency communities.

According to DeFiLlama data, on July 24th, Unibot captured revenue of up to $665,000 within 24 hours, while Uniswap’s revenue during the same period was $983,000.

Coingecko shows that its token UNIBOT has risen from $3 on May 22nd to a peak of $148, an increase of about 50 times, and is currently priced at $138.

Unibot’s outstanding performance has sparked a speculative frenzy in the bot trading project sector of the cryptocurrency industry, with a large number of Telegram Bots, Discord Bots, and other trading robot projects appearing in a short period of time. The tokens associated with these projects have experienced multiple-fold increases in a short period of time. For example, the robot Loot Bot token LOOT, which helps users claim airdrops, has seen a daily increase of up to 4 times.

Regarding the sudden surge of bot projects in a short period of time, some people are bullish while others are observing with caution.

Those who are bullish believe that Unibot allows users to complete on-chain token transactions on social platforms such as Telegram, greatly simplifying the threshold for users to participate in on-chain activities. Additionally, the optimism is mainly based on the fact that Unibot’s captured revenue has surpassed that of most leading DeFi protocols. On the other hand, users who remain neutral believe that Unibot-like projects are easy to replicate and there will be a mix of good and bad bot projects in a short period of time with no guarantee of security.

How long will this Unibot narrative last? Will Unibot be like memecoins, coming and going quickly, leaving nothing behind after the hype?

In addition, data shows that over 80% of Unibot’s captured fees actually come from the transaction taxes of the native token UNIBOT (users need to pay a 5% transaction tax for each UNIBOT token transaction), and less than 20% of the revenue comes from the claimed transaction fees. The majority of the transactions completed by the Unibot trading robot are in memecoins. In the Unibot trading competition held in July, over 65% of the participating addresses were in a loss-making state.

UNIBOT token skyrocketing, revenue surging, igniting speculation in the Telegram Bot sector

According to Dune@whale_hunter data, since its launch in May, Unibot has captured a total revenue of 3280 ETH, worth $6.08 million, and has completed a total trading volume of $85.76 million. Meanwhile, its token UNIBOT has risen from $3 in May to a peak of $148 on July 24th, an increase of about 50 times.

UNIBOT has a total issuance of 1 million, with a current price of $109 and a market value of $130 million.

As a new application, Unibot generated over $6 million in revenue in just two months. The UNIBOT token has increased by about 10 times, and the rapid rise in revenue and token value has attracted attention to the Telegram Bot sector and sparked speculation.

Last week, exchanges such as Huobi and Bitget launched the UNIBOT token, and encryption data platforms such as CoinGecko and CoinMarketCap also launched tokens for the Telegram Bot sector.

Bobby Ong, co-founder of CoinGecko, has repeatedly posted content related to Telegram Bot on Twitter. He stated that the biggest pain point for new users entering the cryptocurrency industry is the difficulty of using wallets and DeFi protocols. After experiencing Unibot, he roughly knows how the next billions of new users will interact with cryptocurrencies. Unibot’s idea is simple – to build a fast and simple wallet on Telegram and integrate it closely with DEX. It is indeed much easier to conduct DeFi transactions on mobile phones now.

In another tweet, he wrote that Telegram Bot tokens represented by Unibot will become the next hot spot in the next 1-2 months and asked if users agree.

What exactly is Unibot? What are its features?

Unibot is a trading tool bot built into Telegram. Users can complete on-chain token trading activities on Uniswap by conversing with the bot on Telegram, such as token exchange, copy trading, limit orders, and privacy transactions. In addition, Unibot also provides real-time alerts for new Ethereum tokens, allowing users to easily add tokens and conduct sniper trading. Unibot charges a fee ranging from 0.5% to 1.5% for each transaction.

From this perspective, Unibot provides convenience for users’ on-chain transactions, allowing token exchange to be completed without leaving the Telegram social app, and eliminating the need to switch between social and DeFi applications, thus reducing the user’s learning curve. In addition, Telegram, as a well-known social app, is expected to have 300 million new users worldwide by the end of this year, which will bring more users into the crypto world.

With the emergence of Unibot, the Telegram Bot has become a separate crypto sector. So, what are some representative projects in the Telegram Bot sector?

According to CoinGecko, as of July 26th, the total market value of the Telegram Bot sector is $161 million, and the 24-hour trading volume is $22.65 million.

Representative projects:

  • LootBot – a bot on Telegram that helps users automate airdrop interactions, aiming to automate airdrop harvesting. It facilitates airdrop interactions on multiple EVM compatible chains, tracks airdrop claim progress, and prevents frontrunning attacks.

  • Bolt Bot – a Telegram trading bot that divides users into subscription levels based on the amount of BOLT tokens they hold. Different levels support different functions (higher levels support whale watching, pre-sales, etc.), and have different transaction fees.

  • SwipeBot – a Telegram trading bot for ETH, ARB, and BSC chains. Users need to hold 500SWIPE tokens to access SwipeBot. If the amount held is less than 500SWIPE, a 0.5% transaction fee will be charged, and access will be opened to non-holders every two weeks.

  • MEVFree – a Telegram trading bot that prevents MEV attacks, helping users prevent sandwich attacks during transactions.

  • 0xSniper – a DeFi trading bot that aims to meet the needs of both experienced and novice traders and provides a navigation platform.

80% of Unibot’s Revenue Comes from Token Transaction Taxes with Doubts about Security

Telegram Bot provides users with a simple and friendly way to trade cryptocurrencies. Currently, in terms of user experience, token trends, and captured revenue, Unibot appears to be a successful product. However, 80% of the captured revenue by Unibot comes from the transaction tax of its native token UNIBOT, and the majority of transactions completed on the platform are memecoins, both of which are not sustainable. So, will the narrative of Unibot be as short-lived as memecoins?

According to Dune data, out of the 3280 ETH revenue captured by Unibot, 2843 ETH comes from UNIBOT token transaction taxes, while only 437.2 ETH (about 810,000 USD) comes from revenue generated by robot trading, accounting for less than 20% of Unibot’s revenue.

Currently, Unibot generates revenue mainly through two methods: robot trading fees (Bot Fee) and transaction taxes of the native token UNIBOT. For the former, Unibot charges a 1% fee for each transaction, with 40% allocated to token holders. As for the latter, all UNIBOT token transactions require a 5% tax, with 1% of the transaction volume distributed to token holders. To be eligible for income sharing rewards, the token holding balance must be greater than 50 UNIBOT.

In simple terms, if a user holds more than 50 UNIBOT tokens, they can receive 40% of the transaction fees and 1% of the UNIBOT transaction tax.

Transaction tax mechanisms are commonly seen in meme tokens. For example, the AIDOGE token on Arbitrum has a 15% transaction burn tax mechanism, similar to the royalty mechanism of NFTs. This mechanism is often considered designed to reward long-term holders and reduce token sell-offs. However, it also means that users incur losses upon buying. Taking the 5% UNIBOT transaction tax as an example, users incur a loss of 10% upon buying because they need to pay 5% when buying and another 5% when selling. Therefore, the sustainability of tokens relying on transaction tax dividends is unknown. Currently, mainstream cryptocurrency projects do not have any transaction taxes, and even the competition for NFT royalties is approaching zero.

Additionally, most of the transactions completed by Unibot rely on its own token UNIBOT-WETH. The memecoin tokens have the highest trading volume, such as the third-ranked HAMS token from a on-chain hamster racing game, followed by the primate-themed coin JIM. If the memecoin hype subsides, how will Unibot maintain its trading volume?

In the trading competition held by Unibot in July, approximately 1402 users participated, but over 65.2% of the trading addresses were actually in a loss-making state.

In fact, the trading volume of Unibot has significantly decreased. On July 26th, the trading volume was only $1.1 million, with captured fees totaling $22,000.

In addition to the ongoing issues with its business operations, Unibot’s security has also been questioned by users. During the use of Unibot, the robot will generate new wallet addresses, and users need to deposit corresponding assets to execute the purchase. However, the private keys of these three wallets can be queried on the Telegram page. If the Telegram account is hacked, the assets in the addresses will also be at risk of being stolen. Furthermore, users face the risk of leakage when importing their wallet private keys into Telegram. There is also the possibility of user error when entering the token address for purchasing tokens.

Regarding security, Bobby Ong, co-founder of CoinGecko, once said, “I would never be surprised if a robot stores its users’ private keys and deceives them by transferring assets to its own wallet.”

Therefore, users need to be aware of the risks when using robots like Unibot, and it is best to deposit a small amount of funds and use a new wallet.