The THORChain Bot Activity

This article aims to identify bots in THORChain (could be something like a certain number of swaps made each day). Approximately what percentage of the swaps and volume of swaps are made by bots? What strategies do you see them employing (most likely arbitrage bots)? The amount of bots a high % of bot activity is conducted by a few or by many?

Bots can be used for a variety of tasks such as analyzing market data, finding risks before investing and determining the best time to buy and sell. In addition, crypto trading bots are generally thought to be more efficient than trading cryptocurrency assets manually. A crypto trade bot can handle large volumes of data and draw reasonable conclusions from it. The bots perform better than humans at this. Even if all data has been processed, it is difficult to gain insights from human trading. 

Crypto markets tend to be volatile, which results in dramatic price fluctuations even within a matter of minutes. Due to this situation, investors must be very alert if they are to take advantage of market values. However, this may not always be possible. In these cases, the bots assisted traders in gaining a better advantage in trading the crypto market.  The advantage of using bots when trading cryptocurrency is that the market is open 24 hours a day, 7 days a week. They can react more quickly than investors. On the other hand, most investors don’t have the time to consistently find the best trades, which robots can do. For example, Arbitrage bots are mainly designed to take advantage of discrepancies in exchange rates.

For this article I assumed that any transaction with a single user that exceeds 250 in a day amounts to a bot transaction. Here From the below graph we can see the number of swaps which are made by Bots for the past 60 days .  The maximum Swaps were observed on May 12, 2022, and the minimum Swaps were observed on April 16, 2022. On May 11th and 12th, 2022, the number of Bot swaps was at its highest. Later, we can observe the trend of bot swaps decreasing.

Below is a graph that shows the daily percentage of swaps made by bots versus users for the last sixty days. The Category Bots (50.38%) are the largest contributors to swaps when compared with the two Categories.

The following graph shows a heat map of swaps made by bots from the past 60 days. Here we can see that a Maximum swap of 61.11K was recorded in W19, 2022.

Here From the below graph we can see the swap volume of bots for the past 60 days .  The maximum swap volume was observed on March 31, 2022, and the minimum swap volume was observed on May 15, 2022. On March 31st 2022, the swap volume of Bot was at its highest. Later, we can observe the trend of swap volume is in decreasing. The largest Swap Volume(usd) of bots 45.97M was recorded on March 31, 2022. Swap Volume (usd) of bots is decreasing

This graph shows the daily percentage of swap volume by bots and users for the past 60 days. And also here we can see the category users (56.85%) are the largest contributors to generate the swap volume when compared with the two Categories.

The following graph shows a heat map for swap volume made by bots from the past 60 days. Here we can see that a Maximum swap volume of 205.93M was recorded in W13, 2022.

Below is a graph comparing the number of bots vs. regular users for the last 60 days. There are currently 62,900 wallets on the network for past 60 days . In the two categories, the category User has the highest contribution (98.16%) to the total Wallets. Accordingly, there are more normal users than bots in the Thorchain. Even though there are very few bots, more than half of all swaps are made with bots, and the volume of swap by bots is almost more than one-third of the total swap volume. As a result, it is evident that a very small number of bots predominantly conduct high percentages of bot activity. 

In addition, if we look at the graph below, we will see how many bot wallets there are each day. A total of 530 bot wallets were registered between March 17 and May 16, 2022. Maximum Number of Wallets was observed on May 4, 2022, and minimum Number of Wallets was observed on March 17, 2022. Thus, we can conclude that there are only 8 or 9 bot wallets per day in the past 60 days. Also from this we can see that there are only a limited number of wallets that belong to bots, while all the rest belong to users. We can see that although only a small number of wallets belongs to bots, the swaps and exchange volume made by these bots are equal to more than 50% of total swaps and more than 40% of total exchange volume, respectively.

Observations

Based on the above analysis,

  • For the purposes of solving this bounty, any transaction between a single user and a bot whose total daily value exceeds 250 was classified as a bot transaction.  The most number of Bot swaps were recorded on May 11th and 12th, 2022. Compared to users and bots, there are more than half of the swaps that come from bots.
  • Moreover, we can see that more than 55% of swap volume was contributed by users when comparing bots and users. The swap volume of Bot reached a record high on March 31st 2022. Subsequently, we can observe that the swap volume is in decline.
  • Compared to bots and users, the category Users has the highest contribution (98.16%) to total wallets. The Thorchain has more normal users than bots. Even though there are very few bots, more than half of all swaps are made with bots, and the volume of swap by bots is almost more than one-third of the total swap volume. As a result, it is evident that a very small number of bots predominantly conduct high percentages of bot activity. 

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