Understanding Unibot (UNIBOT) in One Article

IntermediateSep 28, 2023
Unibot lets users purchase cryptocurrency with just a tap on Telegram. Its token, UNIBOT, surged from $2.46 two months ago to a recent $199.30. What caused this meteoric rise? Is there room for other bots?
Understanding Unibot (UNIBOT) in One Article

Background

Telegram is a free instant messaging application with over 1 billion downloads on Google Play. As of 2023, Telegram boasts 55.2 million daily active users and 700 million monthly active users, expected to exceed 1 billion by year’s end. One of its features supports interactive bot creation, allowing users to send commands for various functionalities (payments, games, etc.) or relay specific messages in Channels or Groups. Unibot harnesses this by enabling cryptocurrency transactions on Telegram.

Introduction

Unibot is a popular new Telegram Bot that lets users trade cryptocurrency without leaving the Telegram app. The bot is user-friendly, quick in its transactions, and offers features like decentralized copy trading, DEX-based limit orders, and protection against MEV bots. Since its inception in May, it has seen over $122m in total transactions, distributing $2.55m in protocol revenue. This is far more than the annual income of a typical DeFi protocol. Due to its token’s significant price increase, there’s a rising trend of Telegram Bot concept speculation in the market.

User Interface of Unibot (Source: Official Website)

Little is known about the Unibot team. The founder, Ayden, once participated in the project’s AMA event. From available information, he previously worked at Apple. Besides the team, an end-to-end machine learning startup from California’s Bay Area collaborated with Unibot, contributing to its growth.

Product Mechanism and Features

Telegram Bots are controlled by automated scripts, reacting to specific commands or triggering keywords users send in Telegram chats. Operating Unibot is like using any bot on Telegram. Following the right commands, users can instruct the bot to execute trading strategies or replicate successful traders.

Using Unibot is straightforward. Searching “@unibotsniper_bot” on Telegram opens a dialogue box. Clicking ‘Start’ displays the initialization page, automatically assigning three wallets, and displaying their functions below. Users simply click buttons for corresponding actions.

Note: The private keys for these initialized wallets reside with the Bot. Users can export and import them into Web3 wallets like Metamask, or import their own wallet’s private key to replace these.

Initial Interface of Unibot (Source: Unibot Sniper)

For detailed operation, refer to Unibot’s official video tutorials. The primary features include:

  • Limit orders: Execute orders automatically when the market hits a certain price
  • Sniper tool: Replicate successful or specific wallet trades using Mirror Sniper or capture new token listings with Method Sniper
  • Fail Guard Sell: Pre-test orders for potential failures to save on gas fees and maximize returns
  • PNL Analysis: Easily track profits and losses of accounts managed by Unibot
  • Private trades: Establish trades immune to MEV bot attacks, minimizing risks like front-running or sandwich attacks

In essence, Unibot shifts DEX functionalities to a Bot. Yet compared to DEXs and aggregators, it offers a more straightforward operation focusing on user experience. However, its dependence on Telegram introduces centralized risks as the Bot holds wallet private keys.

Competing Products

Unibot’s success has spurred other Telegram Bots and social media software Bots. From a product perspective, Telegram bot scripts are easy to program, leading to many new Bots in development. Despite many new entrants, Unibot currently retains the majority market share, holding about 60% according to Dune data. As the market grows familiar with Telegram Bots, competitors like WAGIBOT and LOOT are gaining users and increasing transaction volumes.

Comparison of Trading Volumes among Different Telegram Bots (Source: Dune)

There are also unique Telegram Bots to watch:

LootBot: An automated airdrop interaction bot running on multiple EVM-compatible chains, filtering the most profitable airdrop opportunities and implementing security measures

WagieBot: Enables due diligence and interaction with liquidity pools on Ethereum, Binance Chain, and Arbitrum on Telegram and Discord

Bridge Bot: Facilitates direct fund bridging between blockchains via Telegram

GenieBot: An AI-driven bot that offers reliable solutions to user queries

About the Unibot Token

The economics of the Unibot token is relatively simple:

  • Total supply of 1 million tokens, fully liquid, non-dilutive
  • A 5% tax is levied on $UNIBOT trades: 1% goes to the liquidity pool, 2% to token holders, and 2% for team and operational costs
  • 40% of the bot transaction fees belong to token holders
  • Holding 10 or more $UNIBOT tokens qualifies for the above revenue sharing

Currently, there are over 5K+ holders. Per Dune dashboard, holder rewards have accumulated to 1,400 ETH, with recent APR peaking around 47.1%, although it varies.

Unibot Holder APR/APY Trends (Source: Dune)

Reasons for Success

The explosive popularity of Unibot can be attributed to various factors:

Product Reason

Unibot operates within the commonly used Web3 Telegram software, offering a faster and more convenient trading experience than DEXs like Uniswap. Many of its features address real and substantial demand.

Market Reason

With only 1 million tokens in circulation, the low market cap combined with market speculation has led to FOMO (Fear of Missing Out), driving a significant influx of new users. This results in higher transaction fees, increased dividends, and more people purchasing the token, creating a positive feedback loop.

Marketing Strategy

Unibot introduced a commission mechanism similar to Centralized Exchanges (CEX). Referrers earn 25% of the transaction fees from users who register through their link and receive a 20% discount on transaction fees.

UI/UX

Compared to typical CEXs, the bot directly initializes the wallet. With just a few clicks, users can access the product on mobile or desktop, significantly enhancing user experience and lowering entry barriers.

Real Yield

A 1% transaction fee is charged for trades executed through the bot. This genuine income supports the continued operation of the protocol. However, this fee is more expensive than CEXs, like Gate, which charges between 0.02%-0.2% for spot trading.

While we can’t pinpoint the most fundamental or direct reason for success, the market’s embrace of Unibot is not just about chasing trends. It also represents the adoption trend of Web3 and the genuine demand of users for the product. According to TokenTerminal data, this protocol, established only two months ago, earned 4,365 ETH, outperforming many long-established DeFi protocols.

Comparison of Income among DeFi Protocols (Source: TokenTerminal)

Market Outlook

Judging by the transaction patterns, most of Unibot’s trades and trading volume are associated with the Telegram Bot concept and meme coins, deviating significantly from mainstream trading pairs. Moreover, since it directly controls the private keys, centralized security risks are present. Current wallet deposits from users remain relatively low. Looking at the trading demand side, there’s a cap to the market’s peak potential.

Main trading pairs and trading volume of Unibot (Source: Dune)

To trade UNIBOT, users pay a 5% tax, which is considerably higher than the transaction fee and constitutes 85% of total income. If trading volume decreases in the future, it will inevitably impact protocol income. The sustainability of the income is contingent upon elevating the trading volume of tokens other than UNIBOT.

Revenue details of Unibot (Source: Dune)

In the competitive landscape, even though Unibot currently occupies 60% of the market share, it’s not invulnerable. Other bots have overtaken it in terms of market dominance in the past. As product functionalities are easy to replicate and the market’s propensity to chase new trends, Unibot must put in even more effort.

Conclusion

The boom in Unibot has spurred a wave of social bot developments, continuously driving Web3 adoption. Users can easily execute trades, copy orders, and access information across multiple terminals with a simple tap on social media. Looking at the Unibot project alone, its centralized security risk and replicability are evident downsides. However, as a Real-yield DeFi product, its achievement of garnering income exceeding most protocols in just two months and distributing it to token holders is commendable.

Author: Wayne
Translator: Piper
Reviewer(s): Edward、Piccolo、Elisa、Ashley He、Joyce
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