Banana Gun: When newbies use tokens to snipe bots, the internal circulation of new stocks on the chain begins

Author: Gabe Tramble, Translator: TechFlow

This article was first published in September 2023.

Following the example well summarizes the speculative atmosphere in the crypto space, where traders are driven by daily 100x returns, Rugs, and liquidity extraction. In this space, meme coins have a unique appeal, especially when traders follow the market and the promoters who promote these tokens on Twitter. Platforms like Banana Gun have emerged to provide users with the essential tools needed for high-speed trading.

A few years ago, Maestro led the field, initially gaining traction under its original name Catchy. Maestro was the go-to platform for traders looking to profit from short-term market fluctuations. Then along came Unibot, which improved the field by focusing less on sniping and more on regular users who were frustrated by Uniswap's less user-friendly interface. They strategically focused on referral fees to drive rapid growth, a strategy similar to what we've seen on platforms like Rollbit and Stake.

More recently, Banana entered the space, offering a product that competes with Maestro in terms of sniping capabilities, but also has an advantage in terms of fees. Banana seems destined to win the hearts of "degen" traders, those willing to take extreme risks for potentially huge rewards.

This fluid pattern underscores the constant evolution of platforms and strategies in the crypto gamblefi underground, each struggling to meet the changing needs and risk appetites of its user base.

Hundreds of ERC-20 tokens are being deployed every day amid a bear market and the lowest DEX volumes since 2020. For some traders, watching the meme coin market is a full-time job. A project that rises 100x can make back your investment and a nice profit. Traders can participate in a variety of ways, including pre-sales, sniping, and spot buying of tokens.

• Pre-sales: Allocating funds before a token is issued.

• Sniping: Using bots to automatically buy tokens at launch.

• Spot: Tokens purchased directly on exchanges such as Uniswap or Coinbase ...

Traders tend to decide their strengths and choose a few categories to focus their energy on. In this process, we will focus primarily on the rush phase; let’s dive in.

Token Snipers

Before the advent of Telegram rush bots, this game was all about expertise. Top token snipers and bot operators would carefully analyze Meme coin contracts to identify key functions that trigger token releases, maximum transaction volumes, and any developer-implemented measures to discourage early buyers. With the advent of Telegram bots like Banana Gun and Maestro, this approach has largely been replaced.

In a nutshell, token snipers are automated trading bots that enable users to execute rapid buy and sell orders on newly issued tokens on decentralized exchanges like Uniswap. Many of these bots use Telegram as a platform. Developers prefer Telegram because it is where trading ideas flourish and it is a crypto-native messaging app. The product-market fit for token snipers is clear as users are adopting them at an increasing rate. Scrapping bots can also buy issued tokens with similar speed and efficiency, which accounts for the majority of their trading volume.

These top scrapping bots can now emulate entire contract functions, allowing users to bypass the user interface of platforms like Uniswap and simply decide how much ETH to deploy. This shift makes the scrapping landscape more user-friendly, but also more competitive.

In the case of Maestro, for example, users are still required to input a maximum trade volume, and a certain level of familiarity with contract methods is required in non-advanced mode. This is where Banana differentiates itself from other competitors - no such expertise is required, and the process is even simpler and more straightforward.

This is in contrast to platforms like Uniswap, which recently removed Expert Mode. While this change may benefit retail traders by adding a layer of security for high-impact trades, it leaves skilled traders with the task of manually tweaking their strategies, which they are now forced to do. The removal of Expert Mode has had an impact on experienced traders, who have built their own front-ends to improve the experience. This highlights why Telegram sniping bots like Banana Gun, designed for a more mature user base, are gaining traction in the fiercely competitive ERC-20 token trading landscape. By using these bots, traders not only optimize their strategies, but also avoid the limitations imposed by retail-oriented decentralized exchange interfaces.

How do these sniping bots work?

Imagine a trader eyeing the launch of $TOKEN in a few days. They simply load up the Telegram app and place the smart contract into the token sniper. After specifying the amount of ETH they are willing to risk, it’s a waiting game. Once the token enters the DEX pool, the Telegram sniper triggers, executing the predefined trading parameters. If all goes according to plan, the trader enters with a 10k market cap (hypothetical example) and explodes to a 200k market cap in a matter of seconds — a full 20x profit. But now it’s not that simple. The effectiveness of these snapping bots has led to an influx of traders using the same strategy, often using 10 or more wallets to beat the competition.

That’s why it’s not enough to just have a snapping bot these days; timing is critical. Enter Banana Gun. Unlike other platforms that require manual input or specific monitoring, Banana Gun optimizes the entire process. Once a contract is added to the bot before token trading begins, Banana’s sniper automatically looks for smart contract triggers like “EnableTrading” to snap up/buy tokens as soon as they are released.

Snipers can also monitor “liquidity added” transactions, now that there is liquidity to enable trading.

Banana Gun

Banana Gun has democratized the sniping landscape in the crypto space. Previously, sniping was an exclusive activity reserved for individuals with advanced technical skills who were able to read and configure smart contracts. Banana Gun has opened this door to everyone by automating much of the process of sniping. Their platform is designed to be very easy to use: you paste a contract and let the bot handle the complexities of determining method IDs, tax rates, and maximum transaction amounts. This feature sets them apart from competitors like Maestro, where users are required to manually read the contract address and configure the settings.

The cornerstone of Banana Gun's unique value proposition lies in its user-centric focus on automation and preventing most Rug scams. Not only does Banana Gun automate, every trade is privately executed with a user-set Ethereum bribe. This clever mechanism provides you with an extra layer of security. In an environment where there are people trying to execute Rugs with expensive gas fees, Banana Gun enables you to snipe at a cost-effective price. The private transaction feature also ensures that you will never get sniped or sniped. A sandwich attack is a way for traders (bots) to exploit the ordering of trades by placing trades before and after a user's trade. Banana Gun actually takes it a step further and will reverse your trade if it detects it is at risk of being sandwiched - even if it was executed privately. Even competitors like Maestro lack this nuanced functionality.

Speed ​​is of the essence, and Banana Gun is currently one of the fastest retail scrambling bots on the market. It first launched in early June and has attracted around 700 daily active users, with over 12,000 cumulative users.

When a user buys, the interface moves to the sell channel and the user can focus on the mechanics of selling. Typically, other scrambling bots buy and sell in a single interface.

Core Features

0 Block Bribes

Bribes are an important feature of Banana Gun, but it's worth noting that Maestro originally pioneered the concept of collective bribery. Maestro’s system makes it extremely difficult for a single bot user or sniper to defeat the collective bribery of a group of participants, effectively democratizing the process.

Banana Gun, however, advances this approach from a whole new angle. While Maestro may have introduced collective bribery, Banana Gun perfects it by appealing to a smaller but more sophisticated and experienced user base. These people are well versed in the mechanics of snapping and know how to defeat even a collective group.

Banana Gun uses a custom RPC, a dedicated node that communicates directly with the blockchain, allowing for much faster data transfer than standard providers like Infura or Alchemy. In this high-speed environment, pending transactions from Banana Gun’s elite snipers are bundled into a single transaction package. This package is then forwarded to the block producers, the Ethereum network’s validating nodes responsible for grouping transactions.

When the package goes to the block producers, the battle gets intense. Banana Gun’s snipers engage in blind bribery, where each participant offers a hidden bribe, also known as a “tip,” to ensure faster transaction confirmation. Take user A, for example, who buys X token for 0.20 ETH and includes a bribe of 0.10 ETH. This bribe directly incentivizes the block generator to confirm user A’s transaction faster. If the token involves a transaction tax, user A may initially lose money until the token increases in value.

The blind nature of these bribes adds a layer of strategy and unpredictability to the trading process. Since you can’t see other people’s bribes and they can’t see yours, your experience and savvy become your greatest assets. This explains why Banana Gun has consistently led the race for block 0 despite having a smaller community. The combination of fast custom RPCs, bundled transactions, and blind bribes gives Banana Gun a unique competitive advantage, making it a powerhouse in the token-snatching space. This unique trio streamlines the trading process and creates an environment where skill, strategy, and speed converge, setting Banana Gun apart from its competitors.

Maximum Spend

Banana Gun made a key update to address one of its initial flaws: users had no control over sniping limits. In its early stages, the bot would automatically buy whatever amount the user set. However, this left some traders vulnerable to sandwich attacks.

To address this, Banana Gun added slippage control and limit orders to its trading package. Users can now define a "maximum spend" limit in ETH, which will limit the amount of tokens and gas they are willing to spend. This is particularly beneficial when dealing with tokens that have a maximum transaction amount, meaning the token contract code limits the maximum amount that can be purchased in one transaction. For example, if a user has a spend cap of "0.25 ETH", the bot will keep the total spend (including gas) below this limit. If the maximum allowed transaction amount is reached, any remaining ETH will be refunded to the user.

A key new feature added based on user feedback ensures that if a transaction cannot meet the maximum allowed purchase amount, it will be automatically reversed. This protection is critical to preventing situations where a user receives a small amount of tokens but pays a high fee due to a higher bribe from others. This update adds a risk mitigation layer that makes the sniping game more strategic.

These improvements level the playing field, allowing Banana Gun users to feel more confident as they navigate both more cutthroat and more cooperative trading scenarios.

Trading Income

Traders use the product, but you may still wonder if developing trading infrastructure like Banana Gun is worth anyone’s time. At the end of the day, Banana Gun generates 10-25+ ETH in revenue per day through trading fees. This is without token revenue (as of Sept. 15th), whereas for Unibot, token revenue adds additional trading fees to its trading volume.

Competitive Landscape

There are several other bots competing with Banana Gun for the sniping space, including Maestro and Unibot, which are the largest snipers. Overall, Maestro has the largest user base. In terms of daily bot usage, Banana Gun recently surpassed Maestro for a few days.

Market Structure

The total bot user base currently exceeds 100,000, with daily active users consistently exceeding 4,000 since August. A few leading products account for over 90% of total users - specifically Maestro, Banana Gun, and Unibot.

Revenue and Fee Structure

As of September 15, 2023, Banana Gun reported 756 ETH in trading fee revenue, over $1.2 million. Banana Gun operates a low-fee model, charging only 0.5% on total buys and sells, which is attractive to its smaller but more sophisticated user base.

Understanding the fee structure is important to understanding why Banana Gun has lower average daily fee revenue despite its trading speed and strategy advantages. In contrast, Maestro charges a 1% fee on total buys and sells, and even offers a $200 per month premium membership for extra features. Another competitor, Unibot, has a completely different model — its revenue comes from taxes as part of its fee structure.

The word “total” is crucial here. If you make a 10 ETH trade and break even (buy 10 ETH/sell 10 ETH), you still pay a fee based on the total volume traded. With Maestro, you’d pay 0.1 ETH on the buy and another 0.1 ETH on the sell, for a total of 0.2 ETH. In Banana Gun’s case, you’d pay 0.005 ETH each on the buy and sell, for a total of just 0.01 ETH. This stark difference in fee structure partially explains Banana Gun’s lower daily transaction fee revenue, but it also represents a competitive advantage for cost-conscious users.

By breaking down the fee differences, it can be seen that despite having fewer daily active users, Banana Gun offers an attractive alternative for experienced traders looking to maximize their strategy while minimizing costs.

Looking Forward: Intent-Based Exchanges

We predict that Telegram bot tools will trend toward “intent-based trading,” essentially acting as automated executors of a user’s specific trading intentions — whether it’s exchanging x, doing y, or z.

Intents are signatures that execute a transaction based on defined criteria, rather than individual transactions (TXNs) or paths to the same outcome. By using intents, users have more flexibility and control over the outcomes of their trades.

If a transaction says “do A then B, pay C to get X in return,” an intent says “I want X, and I’m willing to pay up to C in fees.” - Paradigm

Since BananaGun does not route exchanges to a third party for execution, it is not generally considered an intent-based exchange. However, we may see tools like Banana Gun auctions or fulfill swap orders on behalf of users, or use a request for price (RFQ) model that allows users to submit an order to be fulfilled offline. Banana Gun can currently interact with block builders to enable transactions to be processed faster to enable launch rush. In the future, Sniper may move to off-chain solutions to fulfill early rush or general swaps. In theory, a user could sign a transaction confirming that they are willing to spend X, and then Banana Gun processes the transaction on the user's behalf or sends it to a premium participant for additional fees.

Risks

Like most protocols, Banana Gun is not without risk. Risks are generally similar across DeFi protocols and include economic exploitation or smart contract risk. Economic exploitation refers to the exploitation of the monetary system within the protocol mechanism, while smart contract exploitation may exist in unaudited code. Both risks may exist in Sniper bots.

Security Risks

When it comes to Banana Gun, security risks are not limited to smart contract vulnerabilities. The bot has access to the user's private keys, which means that the bot project team technically has control over the user's funds. To mitigate this risk, most traders only keep enough funds in their Telegram wallet to execute trades, moving the rest of their funds to a more secure wallet.

There is always a risk that private key data could be accidentally exposed. However, it is worth mentioning that both Banana Gun and Maestro delete private keys in the Telegram user interface as soon as the user provides them or generates them in the app. In the case of Banana Gun, the platform cannot retrieve your private keys for you if you forget or lose them. Private keys are stored on a separate encrypted server that only the bot can access and are protected by multiple layers of security, including marshaling, hashing, and transformation. Marshalling packages data for secure storage, hashing converts this data into a one-way, irreversible string, and transformation further obfuscates the data into an unreadable format, together ensuring the highest level of protection for private keys.

Bribes

Being the fastest comes at a price. Just like cheetahs can run very fast, the downside is that they need time to rest. With Banana Gun, users may over-bribe tokens based on pure hype and speculation, eroding profits. If "Sniper A" bribed 0.1 ETH and a competitor "Sniper B" bribed 0.2 ETH, the entry point for "Sniper A" would be higher. In some cases, unreasonable bribes are added, resulting in losses for many parties involved. Tips are non-refundable and sent entirely to the block builders.

Conclusion

Banana Gun stands out for its speed, low cost and strong stability, focusing mainly on execution timing, and many trading successes can be attributed to Banana Gun's efficiency and transaction bundling architecture.

Banana Gun's continued growth in the depths of the bear market proves the usefulness and demand of the product. Despite the complexity of sniping, Banana Gun's user base remains strong, with more than 700 users per day in just a few months and revenue of more than 10 ETH per day in recent weeks.

But the Token Sniper Bot user base is ruthless and has no brand loyalty, so the Banana Gun team must continue to iterate and ensure they have a competitive product.