There are many advantages to automating one's trading tactics instead of pointing and clicking with a mouse. For starters, bots can execute trading decisions free of emotion, are lighting fast and have far fewer margins of error. According to CNBC estimates, crypto trading bots account for 70% to 80% of the overall trading volume.
TokenBot is an automated copy-trading platform designed for social trading groups and communities within messaging apps such as Discord, Telegram and Slack. Once added to a social media group, TokenBot monitors the admin's account on an exchange and automatically notifies members of their trading activity details in real-time. The bot has more than 8,000 daily active users and streams close to $100 million per day in trading volume.
In an exclusive ask me anything session with Cointelegraph Markets Pro users, TokenBot co-founders Anthony Elia and Shaun Newsum shared insight on how the bot could help crypto traders.
Cointelegraph Markets Pro User: What crypto exchanges are currently supported on Tokenbot?
Anthony Elia and Shaun Newsum: We support all of the significant spot and futures exchanges. Binance, FTX, Bybit, Coinbase, Kraken and BitMEX. We are expanding to Gate.io, OKEX, Huobi shortly. Many of our master traders who use the platform, especially those with leverage trading strategies, use Binance, with FTX coming in at second place.
CT Markets Pro User: How does the structure work? I connect my API to the bot, and then the trades are shared through friends/community via Discord/Telegram? What's the fee for it?
AE & SN: Yes, you connect your API key inside the TokenBot.com dashboard, click your Discord/Telegram account and then add to the bot in your group chat. There is no fee to share trades. If users want to copy your trades, you can set your price as low as $29/month, and TokenBot takes anywhere from 10%–30% of the platform, depending on the subscription price. TokenBot will automatically copy those trades to the subscriber's crypto account via their API keys.
CT Markets Pro User: Are the trades shared in near real-time, or is there a delay?
AE & SN: Are the trades shared in near real-time, or is there a delay? Yes. Our system connects directly to the exchange WebSockets API, and we get near real-time notifications of trades to reduce latency. We have been engineering this system for over three years.
CT Markets Pro User: Does the bot support DEXs as well, or only centralized exchanges?
AE & SN: Right now, only centralized exchanges. However, if we support DEXs, we will look to support dYdX first, given their on-chain perpetual futures contracts product has gotten a lot of steam with traders.
CT Markets Pro User: You mentioned transparency as a big forte of the setup. But what if a trader, say, trades on Coinbase and then transfers coins to Uniswap and then swap/buy/sell there? The bot [will] not be able to pick up the DEX trades right? Are there workarounds?
AE & SN: You can cross-copy trades across CEX with TokenBot, but there is no way to tell if the trader you are copying withdrew that coin from the exchange to say, Uniswap and exchanged it there. But you would have a trade left open until the trader sold the position from where it originated. The trader would eventually have to answer to their community about the still open trade. There is no way around the trader manipulating the P&L on their trades.
CT Markets Pro User: There have been many phishing exploits lately involving Discord. How secure is Tokenbot from this type of attack?
AE & SN: Since we are mainly a CEX/API product, our main security layer is through hardware encryption and IP-restricted API keys "binding." Most of the API keys in our system can only be used by our servers. For example, you can create an API key for use with TokenBot on Binance, Bybit and Phemex — and that API key is functional ONLY on our servers. This restricts the possibility of any "man-in-the-middle" type attacks.