How sniping bots do their damage

Sniping bots. The enemy. We all know that snipe bots cause a lot of harm to new projects. But how? How exactly do they work?

What is a sniping bot?

At its core, a sniping bot is a script that searches for new listings on one or multiple AMMs (could be on any blockchain: Ethereum, BSC, Matic, etc.). Some bots try to snipe every single listing, others look for specific ones, for example when the initial liquidity (provided by the project’s team to create a pair/market) is above a certain threshold (aka, going after the bigger fish).

Who runs them?

In most cases, the person/group running the bot is its creator. Some sell bots or build them on-demand, but the quick nature of the game requires constant updates. And besides, why give someone else an opportunity to front-run your scam with your own script?

How they get in

Sniping bots usually get right into Block 1. Since blockchains are public, they can see when the initial liquidity is added to the pool, before the block is finalized, and enter the pool alongside it. Retail investors won’t even be able to get into Block one since a trading pair is not yet established. Thus, it gives the bots an unfair advantage to get in ahead of everyone else and drive up the price.

The dump

Sniping bot owners are rarely interested in holding project tokens long-term. The play is to get in before anyone else, drive up the price, then dump the token on the individuals who see the big green candle and are hoping that it will keep going up.

Of course, with this much selling and with the bots having zero intention to buy this particular token back, the demand quickly dries up and the price plummets.

The bots get out higher than they entered on the back of this initial hype and excitement while those who bought from them suddenly find that there aren’t enough buyers to “flip” the token to. And when a lack of demand is coupled with a fear of being stuck with a bag of tokens that are tanking, the selling pressure snowballs quickly and mercilessly. This devastates the community (and the team), but the sniping bots are long gone, taking their quick (and massive) profit to some other sucker project.

I am Legion

It’s hard enough to catch one bot trying to push through one giant transaction. But the scammers make it infinitely harder by deploying hundreds of bots to push through small transactions in an attempt to overwhelm the launch and appear as legitimate retail investors.

They even create multiple social media accounts to create FUD in the project’s channels if they get caught sniping.

Imagine being a team member or a legitimate community member and seeing the Telegram chat flooded with messages from seemingly real people about being scammed by the team, having their tokens locked unfairly, rug pull, and other empty FUD buzzwords. It’s reasonable to believe that these are real people being scammed. But a quick blockchain analysis shows hundreds of wallet addresses being funded by the same single wallet, just like hundreds of social media handles are created by the same person.

111PG sees right through this, but it’s a PR nightmare that if left unhandled can destroy a young project faster than a John McAfee endorsement.

What to do?

111PG can deny/revert sniping bot transactions so that the project is unharmed. That’s frustrating to their runners. But what makes them really mad is when we let them purchase the project’s tokens and then freeze the funds so they can’t pull them out. This basically creates liquidity for the project token’s pair that will always be there. Free liquidity, in a way.

The bots end up doing a good thing while having zero chance of dumping their tokens. The best part is that this deprives them of the funds to attack other projects, hitting them where it really hurts.

False positives

Some people complaining about being caught in the anti-sniping bot filter are actually legitimate community investors. This can happen if the protection is set for a certain time interval that allows exceptionally quick investors to get in. While rare, this does happen. However, it’s very easy to fix: the team has full control over “caught” funds and can unfreeze them for any account deemed legit.

And if the community isn’t comfortable with giving the team such strong decision power over user funds, community members can always request a vote (or demand one if it’s a DAO).

111PG simply provides the tools, the rest is up to the community. We’ll just note that, so far, the teams we’ve worked with seem to be very responsible and careful about user funds.

Cat and mouse

Of course, sniping bot creators see us stopping them and devise code upgrades and new tactics to try to outsmart us.

However, while everything on the blockchain is public, the actual code at the core of 111PG is never publicly visible.

So they can guess how we stop them, but they don’t know it. And we constantly upgrade our code and tactics too. It’s a fun game, but does take a lot of resources and has very serious stakes — the success of young, promising projects, many of which are significantly improving the DeFi space one way or another.

So let sniping bot creators try to create a faster mouse — are mousetrap is ready.

--

--

--

111PG — the sniping bot killer.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

The EVM — Scale or Fail?

What do I Hate About The Blockchain?

Secrets to Disruptive Entrepreneurship

ABOUT THINKIUM ECOSYSTEM STRUCTURE

Alpha SDK’s Custom Transactions, Lisk Framework’s Flexibility, and Quantum Computing — Key…

CYPHERIUM: OUR MOTIVATION

How Commercial Real Estate Owners Can Use Blockchain to Go Solar (& Get Laid)

Accelerating OriginTrail-Polkadot Integration

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
111 POINTS OF GROWTH

111 POINTS OF GROWTH

111PG — the sniping bot killer.

More from Medium

Does shaking duvets increase heart attack risks? Fake news and the anti-vax movement.

OptionRoom December Development Update

Beam Confidential NFTs

ADDAO: The First Decentralized Advertising Platform Based on NFT