August 15, 2022
Snipe Bots and What To Do About Them
Snipers like to say that if we run, we will only die tired. Are our chances better against sniping bots?
If you are not sure what sniping bots are, how they work, and whether they’re legal - you’ve come to the right place! In this blog post we will cover all these questions and give you a simple explanation for snipe bot-related concepts.
Knowing about this topic will be helpful for day traders and developers who may have seen and suffered from sniping bots in the wild.
What Are Snipe Bots?
Snipe bots are automated bots that are built to monitor and trade liquidity pairs on decentralized exchanges, later simply DEXes.
Snipe bots help traders profit, because when a new liquidity pool is opened on DEXes like Uniswap, PancakeSwap, Mooniswap, Sushiswap, Sashimiswap, traders with snipe bots can be the first to buy the new tokens at their cheapest and then sell them on for profit.
This snipe bot strategy works because it allows traders to buy tokens as soon as they’re listed on an exchange at lightning-fast speed, sometimes up to zero seconds from the time of listing! Automated sniping helps traders be the first in line and buy tokens in the same block, or next several blocks.
Sniping is extremely effective for IDO, or Initial DEX Offering - a fundraising method where tokens are issued on DEX and sold to new buyers. Snipe bots can place a trade immediately when the liquidity pool is added.
Although sniper bots can be frustrating, they are not malicious, at least not in a direct way. By design their goal is to get the best possible price on a token.
How Snipe Bots Work?
Now we know what it is and if it’s ok to use it… but what about the details?
The bot works by connecting to the blockchain network, scanning for all mempool/pending transactions, finding and matching the liquidity add transaction of the sniped token, and then placing the buy order in the same block.
Bots are started around 10-15 minutes before listing time and the whole process looks like this:
- Python process listens to DEX events for newly created token pairs
- System identifies and processes new token pairs
- Bot submits a transaction to buy the new token using a smart contract
It takes some work to set up the bot, but nothing too major for experienced coders. Bots typically only need a contract address, while users configure their bot options beforehand.
Most snipe bots connect through Pancakeswap APIs, directly to the Binance Smart Chain, or Ethereum (if we’re talking about Uniswap) via node endpoint.
Unlike frontrunning bots that people don’t want to share in the open, there are a few snipe bots available in the clear. A basic Google search will deliver you all of the code and a detailed step-by-step tutorial on how to set up a snipe bot and get it running.
You will also be able to find a sniping package worth thousands of dollars, that comes along with advanced options and a graphical user interface where you can choose custom gas fee, slippage tolerance, and buying amount.
For the reasons of safety we will not provide any links, and would like to warn our readers to stay cautious at all times when interacting with snipe bots.
Using a Snipe Bot Can Go Wrong
So far it all looks pretty good for snipe bot users.
Bots allow traders to execute buy and sell orders faster, gives an upper hand on IDO days and gives them much higher profits compared to traditional buyers.
Apart from that, the whole process is automated and doesn’t rely on frontrunning, so a trader doesn’t have to wait for any announcements from the developers. Snipe bots give users an opportunity to make multiple buys within seconds and sell at a specific profit target.
But there’s also a fair share of cons for snipe bot users:
- Token developers use anti-snipe measures that can cause for bot transactions to fail
- There may be high buy taxes during first few seconds to trap snipers
- There may be buy cooldowns to prevent snipers from purchasing repeatedly
- There may be taxed blocks in which developers implement a 90%+ tax
- Most bots only work on PCs, rendering them useless for many traders
On top of all that, just shopping for the bot is a risky adventure.
There are a lot of cases when someone buys a bot for a bargain price and is then left with all their money stolen. Bots are not cheap, so sniping can stay profitable for their developers. Some of them only have time to maintain and upgrade snipe bots, and no time to research the market to find good and profitable projects.
To summarize, snipe bots are effective tools for ‘gray area’ profit tactics, but can be nullified if the proper restrictions are set in place by token developers.