Sniping Bot Trading
lately I am starting to notice many crypto projects that either are dexes or trading bot are starting to develop new things to help trade . They are called sniper bots and yes as you can imagine it falls in the AI narrative.
So what are those sniper
A sniper bot is a computer program that automates the process of sniping, or in simpler words placing a last-second bid on a closing candle. Sniper bots are used by savvy traders and market participants. Sniper bots can either be helpful or irritating depending on the side you are on using it or used against you. That is the general way a sniper bot can be used so let’s see how it is used on crypto
Step 1.The sniping bot constantly monitors the mempoolfor any new transactions involving the addition of liquidity to a new pair or the victim's token contract.
Step 2. When you send liquidity to your pair, the bot immediately jumps on it and secures the transaction in the first available block, sometimes even before it's mined and visible to others. As a result, it's able to front-run all potential purchases.
Step 3. The majority of the first users buy the token at an excessive price, add liquidity, and generate profits for the bot.
Step 4.The bot quickly sells all of its tokens, causing the price to plummet, and steals all of the project's revenue from customer purchases.
Of course the more bots are integrating into trading the less effective they would become but at the same time the more money the smarter ones can generate !
Posted Using LeoFinance Alpha
Different bot in different platforms. This is literally crazy, seeing AI in different forms and performing different tasks.
I think this sniping bot still falls under the normal finance terms..
Profit or Loss. Which means by applying it, someone gets to make profit while others get to lose.
Great post by the way @steemychicken1
Always someone has to lose for someone else to gain !
Quite confusing to me.
How can the bot be that early in the game? Who is "you" in step 2?
If the bot has enough tokens to make the course plummet, then he must have had enough money to cause the price rise in first place. Sounds either too easy or overestimates the power of a single player.
Most of the bots are scanning on chain to find new tokens. Yes of course and they have money but they are also early so they buy cheap they rise the price fomo kicks in and then the dump is coming. It can manipulate the price .
I was thinking, the increase in bots over time, will it make it harder for beginner investors to join? I also thought about the graphic patterns, they exist because somehow many investors are looking at them, but when everything is dominated by bots, will it still make any sense to study candlestick patterns?
Don’t really know but always being early is most profitable!
very interesting post and topic.
Thanks to you I understood how a Sniper bot works.
!discovery 20
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