Telegram bots have been making waves recently. Maestro bot led the charge months ago, and Unibot is the current market leader. The much-hyped BananaGun bot entered the scene in the middle of the competition. After proving a massive success for early investors, the price took a nosedive a few hours after launching.
Massive success turns sour in the investors’ mouths
The Banana Gun Telegram bot allowed users to set limit orders and auto-sell. The statistics for the bot spoke for themselves: 874 daily active users (pretty good for a crab market), around 16k lifetime users, 4,882 average daily trades, and 206.6M trading volume.
Nevertheless, despite this success, the project still failed after they decided to launch a token, raising around 800 ETH. They then whitelisted a few crypto influencers and loyal bot users, allowing them to buy $BANANA tokens at $0.65 per token.
Soon after it started trading on DEXs, the price shot up to $8.70, a raging +1,338%. ROI for early investors.
The price shortly took a nasty nosedive, settling at just $0.02, causing the project to be flagged as a rug pull or pump & dump. The cause of the crash was the team removing liquidity from the trading pair after they discovered a bug in the contract.
Even though the bot processed hundreds of millions of dollars in volume, the team could not bother to have proper audits conducted. ChatGPT detected the bug within seconds, even though the team claimed they had had two audits conducted.
The team is now trying to relaunch the token, promising a refund to All LPs, holders, and presale buyers in the form of an airdrop.
Importance of DYOR and Taking Profit
Since many influencers were shilling this project, many investors believed it would last. However, the drastic turn of events just 3 hours into the launch shows the importance of taking profits fast on riskier investments. Over half of presale buyers could turn 1 ETH into $17k.
It is important to consider the kind of companies that audit the projects you plan to invest in. Not all audit companies can be trusted; hence, you would do well to take audits with a grain of salt. Some good audit firms include Peckshield, Paladin, Trailofbits, and Halborn.