Accurate data on the blockchain can be challenging to obtain, but it is crucial for estimating real activity and trading volume. One important measure of activity is stablecoins, which provide insights into trading volumes and transactions.
Interactions with smart contracts, such as decentralized swaps, liquidity mining, and lending, require on-chain involvement. However, the transaction volume associated with these activities does not necessarily reflect trading settlements. A recent study conducted by Bloomberg and Allium Labs revealed that stablecoin volumes are often inaccurately reported, with approximately 90% of the activity being driven by automated actions or bots.
The issue of accurate reporting arises when a set of coins is used in multiple transactions, leading to double-counting. As stablecoin transactions reached levels comparable to those of Visa, it became evident that further research was needed.
It is important to note that the reported on-chain volumes may not necessarily represent real individuals or settlements. The most noticeable discrepancy lies between the unadjusted and adjusted volumes, as determined by Visa and Allium’s methodology. The adjusted value is only about 10% of the unadjusted value, which is attributed to repeated transfers of the same funds.
Stablecoins are present on various blockchains, with a particular emphasis on DeFi. TRON-based assets, including TRON-based USDT, play a significant role in the ecosystem, alongside Ethereum.
The TRON network boasts the highest reported transaction count and value. TRON-based USDT has reportedly carried a value of $5.42 trillion since the beginning of 2023, with nearly one billion transactions during that period.
In second place is the Binance version of USDT, which has recorded approximately $759.9 million in transactions since 2023, though its value is just $671 billion. The high level of activity may indicate that some of the transactions were either micropayments or automated by bots.
While stablecoins are available on numerous blockchains, Ethereum and TRON remain the primary platforms for their use, with Solana experiencing noticeable growth.
The supply growth of stablecoins primarily occurs through the printing of Ethereum or TRON-based USDT. This metric can also serve as an indicator of market sentiment and readiness to trade.
Stablecoins on other blockchains have only a fraction of the supply and potentially limited impact on activity.
The use of bots in crypto trading is a well-known phenomenon. Some interactions with decentralized exchanges (DEX) or smart contracts occur too quickly for human use, while other activities are automated to prevent unwanted market movements.
Bot usage, whether for trades, NFT sniping, or automated collaterals, does not harm the DeFi space but instead enhances its potential. Even novice traders can engage in automation by utilizing Telegram bot tokens.
DeFi activity is measured through both transactions and active wallets. During certain periods, transactions and trades may increase without a corresponding rise in the number of users. This discrepancy suggests the utilization of bots.
Most decentralized protocols do not inherently oppose the use of bots. The only area where bot-driven activity poses a problem is decentralized gaming, where developers strive to attract genuine users with a single wallet tied to a verified identity.
However, in projects that do not require Know Your Customer (KYC) procedures, multiple wallets and bots remain a viable strategy.
It is essential to note that bot-driven volumes are not necessarily fake volumes. In fact, they may be associated with personal wallets and serve as tools for high-speed trading. Telegram bots compete to provide seamless services, eliminating the need for manual transaction orders.
Automated services like BonkBot have facilitated over $5.5 billion in lifetime trades. Bots have also contributed to the recent trend of meme tokens by reducing the time between decision-making and purchase.
Bot trading is prevalent on networks that offer a robust DeFi sector and low trading fees. MEV and Telegram bots operate on platforms such as Solana, Arbitrum, Base, Avalanche, and Binance Smart Chain.